Success stories:foreign investorsin Kazakhstan by Ivan Paushkin

Success stories: foreign investors inÂ Kazakhstan Ideas for potential players

Success stories: foreign investors in Kazakhstan Ideas for potential players

Contents Welcome to Kazakhstan

Success stories ArcelorMittal

Cameco Corporation

Chevron

Eurasian Natural Resources Corporation

HSBC Bank Kazakhstan

METRO Cash & Carry

Microsoft

Philip Morris International

The Royal Bank of Scotland

Siemens

TeliaSonera

About The Foreign Investors’ Council

About KAZNEX INVEST

Welcome Those who have visited Kazakhstan have had the opportunity to experience the energetic and dynamic environment of our country. This year, 2011, is a jubilee year for Kazakhstan as we are celebrating the 20th anniversary of the nation’s independence. During the years of sovereignty, Kazakhstan has attained success levels recognized all over the world. Since 1991, the Kazakh economy has attracted over US$136b of foreign direct investment, and this indicator is 14 times greater than the one we had at the start of sovereignty. Kazakhstan’s GDP per capita is 13 times what it was 1991. Today Kazakhstan is a state with significant innovative and investment potential. We have created all necessary conditions for foreign investors — a liberal market economy, favorable tax and customs regimes and legislative protection for foreign investments. Entering the Customs Union with a combined consumer market of 170 million people opens new opportunities and horizons for investors to efficiently implement investment projects in Kazakhstan.

Aset O. Isekeshev, Deputy Prime-Minister, Minister of Industry and New Technologies of the Republic of Kazakhstan

Today, around 15,000 companies with foreign capital are registered in Kazakhstan, including 270 Fortune-500 companies, such as Chevron, Siemens, Microsoft, General Electric, The Coca-Cola Company, Danone, Henkel and many others. In addition, we are currently working to attract such companies as POSCO, Hyundai Motor Company, LG Chemical (Korea), Carrefour, Lafarge (France), Sampo Rosenlew (Finland) and others. Within the framework of the state Program on the Accelerated Industrial and Innovative Development for 2010—2014, we started joint realization of large-scale projects in non-extractive industry sectors with investors from the USA, Germany, France, Japan, Turkey, South Korea and other countries. I believe this is the best evidence of investor confidence in the stable and long-term sustainable development of Kazakhstan and its economy. This brochure relates the stories of successful operations of foreign investors in Kazakhstan. We are open for new projects and welcome investors with modern production and management technologies required for these projects that are willing to contribute to the development of Kazakhstan’s economy. From our side, we are committed to providing such investors with attractive terms for favorable business in Kazakhstan. Welcome to our country! Aset O. Isekeshev Deputy Prime-Minister, Minister of Industry and New Technologies of the Republic of Kazakhstan

Success stories: foreign investors in Kazakhstan Ideas for potential players

Welcome to Kazakhstan

Kazakhstan at a glance

• Kazakhstan posted an annual

average GDP growth rate of 8.3% from 2001— 2010, with GDP in 2010 reaching US$148.1 billion (US$9,070 per capita). After a sharp decline in GDP growth from 8.9% in 2007 to 1.2% in 2009, the economy of Kazakhstan has rebounded. In 2010 and from January—June 2011, GDP growth reached 7.3% and 7.1%, respectively. In June 2011, the Government of Kazakhstan set the official annual average GDP forecast for 2011—2015 at 7%.

• The dominant source of national

revenue remains the oil and gas and mining sectors, but Kazakhstan continues to diversify its economy.

• Kazakhstan benefits from robust FDI, given its investor-friendly approach. Since its independence Kazakhstan has attracted over US$110 billion in FDI.

• The country’s proximity to the fast

growing markets of Russia, China and Asia and developing infrastructure give it a competitive advantage.

• Due to the formation of the Customs

Union between Russia, Belarus and Kazakhstan, the common market now contains 170 million people.

• Kazakhstan is committed to regional

and international cooperation and aims to become a country with a high-income economy (US$15,000 GDP per capita) by the end of 2015.

Success stories: foreign investors in Kazakhstan Ideas for potential players

The impact and consequences of the global financial crisis on Kazakhstan started weakening last year, as the economy of the republic returned to stable growth with GDP increasing 7.3% versus 1.2% in 2009. The economic support measures undertaken by the Government and stabilization on the world commodity markets set a new basis for the subsequent post-crisis development of the country. State support was provided in the form of a stimulus package aimed at ensuring the sustainability of the financial system, support for the real estate and construction sectors as well as small and medium enterprises and agriculture and investments in innovative projects and infrastructure. In January 2011, Prime Minister Karim Massimov said the total volume of funds directed to the anti-crisis campaign of 2008—2010 amounted to KZT3 trillion (US$19 billion). Samruk-Kazyna National Welfare Fund, which was established in October 2008, played a major role in combating the influence of global economic instability. The fund acted as an operator of the Government’s economic stabilization program. Samruk-Kazyna accumulates shares of major national companies, development institutions and financial organizations — more than 500 companies in total. In early 2011, President Nursultan Nazarbayev requested the Government and SamrukKazyna to prepare a program of People’s IPO, which will stimulate the local stock market and allow Kazakhstani citizens to buy shares of the state-owned companies.

In February 2010, President Nazarbayev signed the Strategic Development Plan of the Republic of Kazakhstan 2020, which stated the country’s five key development priorities: preparation for post-crisis development, diversification of the economy, human capital development, providing society with quality municipal and social services, strengthening interethnic harmony and stability of international relations. The goals and methods for further economic development were outlined in the Program on the Accelerated Industrial and Innovative Development of Kazakhstan for 2010—2014, on which the more detailed Business Road Map 2020 and the Industrialization Map of Kazakhstan for 2010—2014 were prepared. Within these programs, priority sectors for diversification were defined: 1. Agriculture and agro-products processing 2. The construction and construction materials industry 3. The oil refining and support services industry 4. Metallurgy and manufacturing of finished metal products 5. Chemicals and pharmaceuticals 6. The energy sector 7. Transportation 8. Telecommunications 9. Tourism 10. Mechanical engineering 11. Biotechnology and alternative energy

RUSSIA

Astana

MONGOLIA

CHINA

U Z B E K I S TA N AZERBAĲAN

K Y R GY Z S TA N

T U R K M E N I S TA N

Most attractive CIS markets for investment — top three choices 40%

Russia 9%

Ukraine

Belarus Azerbaĳan

Moldova

Turkmenistan

Other

12%

3% 1%

32% 14%

Georgia Armenia

33%

10%

Kazakhstan

51%

Erlan Dosymbekov, Co-Chair of FIC Investment Image Enhancement working group

11% 8%

First Total

Source: Ernst & Young’s 2010 Kazakhstan investment attractiveness survey. Total respondents: 204. Respondents selected three possible answers.

Investment attractiveness According to the Kazakhstan investment attractiveness survey, conducted by Ernst & Young in 2010, Kazakhstan was rated in the top three most attractive CIS investment locations by 32% of investors surveyed. International rankings According to the World Bank’s Ease of Doing Business Index 2012, Kazakhstan holds 47th position, ahead of such countries as the Czech Republic, China, Russia and Ukraine. According to rankings in the Global Competitiveness Report 2010—2011 released by the World Economic Forum, Kazakhstan holds 72nd position. Kazakhstan Area: 2,724,900 square kilometres (1,052,085 square miles) Population: about 16.4 million people as of 1 January 2011 Language: Kazakh is the official language; Russian is a means of inter-ethnic communication Capital: Astana (697,000 people as of 1 January 2011) Currency: Kazakhstani tenge (KZT)

Kazakhstan is a dynamic marketplace. During the past two decades, we have witnessed strong economic achievements in a number of industry sectors, and the country’s full potential is yet to be achieved. Kazakhstan is committed to regional and international cooperation and aims to become one of the top 50 most competitive economies in the world. Whilst the dominant source of national revenue is still in the oil and gas and mining sectors, Kazakhstan continuously enhances its economic diversification efforts, thus offering plenty of investment opportunities in non-extractive industries. For investors looking into rapidly growing markets, Kazakhstan is definitely a place to consider as an investment destination. The country offers unique opportunities given its geographic location and economic potential as well as the open attitude of the people. Success for investors in Kazakhstan, as in many other emerging markets, is built on many things, including the right partnership with the local community, investments in human capital and transfers of knowledge. The Foreign Investors’ Council chaired by the President of Kazakhstan provides a unique platform for open and direct communication between the state and foreign investors, creating an opportunity to effectively discuss key issues related to improving the investment climate and exchanging best international practices. As part of such communication, the Kazakhstan Foreign Investors’ Council Association welcomes this opportunity to introduce success stories of foreign investors from diverse industry sectors working in Kazakhstan.

Success stories: foreign investors in Kazakhstan Ideas for potential players

ArcelorMittal

Innovative Development Program and ArcelorMittal Temirtau plans to invest up to US$1b in capacity expansion of its steel, coal and iron ore assets. The flagship projects include a complete overhaul of blast furnace #2, installation of a new billet caster to supply long and profile products and construction of a larger and more efficient oxygen unit.

ArcelorMittal is the world’s leading steel company with operations in more than 60 countries. It has an industrial presence in more than 20 and is the leader in all the main steel markets — from automotive to construction and from household appliances to packaging. A diversified and highly efficient steel producer, ArcelorMittal has an annual production capacity of around 130 million tons. The Group’s upstream integration, via its investment in iron ore and coal mining assets, delivers a high level of self-sufficiency in raw materials. In 2010, ArcelorMittal produced approximately 91 million tons of crude steel, 68.6 million tons of iron ore and 7.4 million tons of coking and thermal coal.

During its 15 year journey, the company has operated in compliance with all legal frameworks of the state while simultaneously serving the people of the state and consistently investing in the operations and Kazakhstani cities in which the company’s enterprises are located. Under ArcelorMittal’s ownership, the company has played an increasingly active role in the development of local communities, the mining and steel industry, and the whole of Kazakhstan.

In Kazakhstan, ArcelorMittal has built a vertically integrated operation which includes a steel plant, coal mines, iron ore mines operated by ArcelorMittal Temirtau and a pipe plant operated by ArcelorMittal Tubular Products Aktau. ArcelorMittal Temirtau is the largest producer in Kazakhstan’s steel and mining sector. The steel plant located in Temirtau has an annual capacity of 4 million tons of crude steel and produces hot and cold rolled steel, tin plates, galvanized steel and polymer-coated coils, welded pipes, coke and chemical byproducts. The company also operates eight coal mines across Karaganda region as well as three iron ore pits and one mine in Central and Northern Kazakhstan. In 2010, the company produced 3.3 million tons of steel, 10.9 million tons of coal and 3.8 million tons of iron ore. The company employs over 40,000 people. The steel plant began operation in 1960 and became part of ArcelorMittal in 1995. Having overcome considerable

Success stories: foreign investors in Kazakhstan Ideas for potential players

difficulties after the acquisition of steel and coal assets in mid-1990s, the company stabilized operations and implemented a series of strategic initiatives to upgrade technology, improve safety and environmental performance, ensure stability of supplies, and re-enter old and find new markets. The rise of the company revived the communities across Karaganda region and ArcelorMittal has become a magnet for the development of local small and medium-sized businesses. Presently, the company is implementing a comprehensive modernization program to expand its capacity to six million tons of crude steel by 2015—16. The modernization is part of Kazakhstan’s Accelerated Industrial and

ArcelorMittal Temirtau is a member of the Foreign Investors’ Council, playing an active role in encouraging further international investment in Kazakhstan through the support of economic, legal and regulatory reforms. As one of the largest companies, and the biggest foreign investor in Kazakhstan, ArcelorMittal plays a key role in an industrialization program initiated in 2009 by the Government of the Republic of Kazakhstan. ArcelorMittal Temirtau’s position in the industry brings unique opportunities and unique responsibilities. Our future success partly depends on the wider world giving us the freedom and flexibility to succeed. We will earn its trust to do so by behaving responsibly.

In Kazakhstan, ArcelorMittal is committed to the principle of continuous improvement and seeks to strengthen its relationships with all of its stakeholders in order to contribute to a healthy, sustainable and prosperous operating environment. Our commitment extends to securing the health, safety and wellbeing of our people, supporting the communities in which we operate and reducing our environmental impact.

ArcelorMittal is transforming tomorrow by:

• Investing in people.

Making sure each and every person working on our behalf feels valued.

• Making steel more sustainable.

Using our expertise to develop cleaner processes and greener products.

• Enriching our communities.

Our presence plays an important role in all the communities in which we operate.

The company has invested heavily in technology to reduce its environmental impact, develop cleaner processes and lessen its carbon footprint. It is also working closely with the Kazakhstani government to find business solutions that improve energy efficiency and carbon emissions. Reducing methane emissions from its mining operations is an important area of focus as well. Besides technical modernization, upgrading production facilities and re-equipment, ArcelorMittal Temirtau places a high value on people and social well-being. Every year the company invests millions of dollars into social projects. ArcelorMittal Temirtau maintains resorts and children’s summer camps, stadiums and medical institutions.

Vijay Mahadevan, CEO, ArcelorMittal in Kazakhstan

General information on ArcelorMittal in Kazakhstan Metallurgical complex established in Established: 1960; became part of ArcelorMittal in 1995 Employees:

Business:

40,000 people The enterprise produces agglomerate, cast iron, and steel, including continuously cast slabs, hot and cold rolled metal, long steel products, tinned and black plates, galvanized rolled metal and polymers, coated rolled metal, welded pipes, and coke and chemical plant by-products ArcelorMittal Temirtau includes the following operations: — An Integrated Steel Plant — 8 Coal Mines — 4 Iron Ore Mines

Location: Website: Parent company:

1, Republic Avenue Temirtau, 101 407, Kazakhstan www.arcelormittal.kz www.arcelormittal.com ArcelorMittal

Success stories: foreign investors in Kazakhstan Ideas for potential players

Cameco Corporation and JV Inkai

Cameco, with its head office in Saskatoon, Saskatchewan, is one of the world’s largest uranium producers, providing approximately 16% of world uranium production. Cameco’s mining operations are located in Canada, the United States, and Kazakhstan. Cameco is also a major supplier of conversion and nuclear fuel services. The company’s uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco’s shares trade on the Toronto and New York stock exchanges. Joint Venture Inkai JV Inkai is a joint venture of Cameco Corporation and Kazatomprom, the national atomic company of Kazakhstan, created to develop uranium resources in Kazakhstan. Kazakhstan is recognized as the world’s top uranium producing country and the Canadian-based Cameco Corporation played its role by successfully completing the first stage of the Joint Venture Inkai, Kazakhstan’s newest uranium production facility. On the global stage, Cameco has made it clear to investors the importance of Kazakhstan and JV Inkai as Cameco reconfirms the corporate goal of doubling uranium production by 2018. Even in its early years as a publicly traded company, when all production was centered in Canada, Cameco was

Main processing plant

interested in Kazakhstan’s uranium potential. The first uranium development agreement between Cameco and Kazakhstan was signed in 1993. The result of early exploration and development work was the formation of the joint venture between Cameco and Kazatomprom in 1996 to develop the significant uranium deposit at Inkai. Now, more than a decade later, Inkai is taking its place as an important production center for both companies. Located in South Kazakhstan Oblast, Inkai consists of two production areas (blocks 1 and 2) and an exploration area (block 3) which is entering an appraisal period.

In 2009, mine production using environmentally-friendly in situ recovery (ISR) technology increased beyond the initial test mining phase as the main processing plant was completed, allowing uranium yellowcake (U3O8) to be milled and drummed on-site. The facility has been built and certified to the highest environmental, safety, and occupational health standards. In both 2007 and 2009, Inkai was recognized by Cameco as the company’s top site in an internal safety evaluation of all its mines. The vast majority of over 500 current employees are Kazakhstani nationals. Cameco has also invested more than US$4m in community investment,

Cameco Corporation and JV Inkai milestones in Kazakhstan, 1996—2005

1996

1999

2000

2002

2004

2005

JV Inkai was officially registered at the Ministry of Justice of the Republic of Kazakhstan

Joint venture receives exploration and mining license

Joint venture receives subsoil use contract

Test mining begins

Joint venture approves the feasibility study

Regulatory authorities approve the environ mental assessment and design plan for the processing facility

Success stories: foreign investors in Kazakhstan Ideas for potential players

in addition to JV Inkai’s own social funding, centering in the village of Taikonur, where the money has helped rebuild the village school and medical station, and has improved the water system. As Cameco looks to the future, a growing percentage of its production will be related to Inkai and Kazakhstan, making both Inkai and Kazakhstan important not only to Cameco, but to the world as around 90 new nuclear power plants, fuelled by uranium and generating clean electricity, are expected to begin production over the next 10 years. Cameco sees its investment in Kazakhstan, through Joint Venture Inkai, as a success story for many reasons.

First, it represents a successful marriage of western and Kazakh technologies and uranium expertise. Second, it provides Cameco with a geographically diversified source of production and Kazakhstan with a diversified source of capital and customers for its uranium. Additionally, it demonstrates that strong relationships can be built between companies even though they may be headquartered halfway around the world from each other. Building on the success of the Joint Venture Inkai, Cameco and Kazatomprom continue to work together to evaluate opportunities aimed at cooperating on uranium conversion.

Tim S. Gitzel, President and CEO, Cameco Corporation General information on Cameco Corporation and JV Inkai Established: 1996 Employees:

90% of over 500 employees are Kazakhstani nationals JV Inkai is owned by Cameco (60%) and Kazatomprom (40%) Over US$350m invested by Cameco by early 2010

Business:

Reserves of 51,800 tonnes U (134.7m pounds of U3O8) The plant capacity (mine and mill): 2,000 tonnes U (5.2m pounds U3O8) ISO 14001 certified as well as BSI OHSAS 18001 certification

Location:

Business office of JV Inkai is located in Almaty, Kazakhstan Business office of Cameco Kazakhstan is located in Astana, Kazakhstan

Main processing plant at night

Website:

www.cameco.com

Parent company:

Cameco

Cameco Corporation and JV Inkai milestones in Kazakhstan, 2006—2011 2006

2007

2009

2010

2011

Inkai achieves international health, safety, and environmental certifications

Inkai wins Cameco’s award for safety for the first time

Inkai enters commercial production — Cameco’s funding of social contributions in Kazakhstan reaches US$4m — Inkai wins Cameco’s award for safety a second time in three years

Main processing plant achieves state commissioning approval

Cameco appoints new President and CEO, Mr. Tim S. Gitzel

Success stories: foreign investors in Kazakhstan Ideas for potential players

Chevron in Kazakhstan

Investing in Kazakhstan’s Development With the formation of the Tengizchevroil (TCO) Joint Venture partnership in 1993, Chevron became the first major Western oil firm to enter the newly independent Kazakhstan. From 1993 through 2010, Chevron made direct investments of over US$25.7b into the Kazakhstan’s economy, including capital investments and operational expenses. Chevron has a 50% interest in TCO. TCO’s total production has grown from approximately 1 million tonnes (8 million barrels) of crude oil per year in 1993 to 25.9 million tonnes (207 million barrels) in 2010. TCO’s total daily production in 2010 averaged 71,000 tonnes (567,000 barrels) of crude oil, 23 million cubic meters of natural gas and 44,000 barrels of natural gas liquids. To increase production efficiency and achieve higher recoverable volumes, TCO completed its Sour Gas Injection and Second Generation Plant (SGI- SGP) projects in 2008. TCO continues to evaluate its options for another significant expansion project based on the SGI/SGP. The Future Growth Project will utilize sour gas injection technology and is expected to increase total daily crude oil production by up to 38,000 tonnes (300,000 barrels).

reserves. Total daily production during 2010 averaged about 28 million tonnes of liquids (220,000 barrels) and 24 million cubic meters of natural gas. Chevron is the largest private shareholder (15%) in the Caspian Pipeline Consortium (CPC) which operates a 1,505 km crude oil export pipeline from the Tengiz Field in Kazakhstan to Novorossiysk in Russia. In December 2010, CPC partners made a final investment decision to nearly double the pipeline capacity at a total estimated project cost of US$5.4b. In July 2011, the ground breaking ceremony in Atyrau marked the start of the construction phase of the CPC expansion. The Atyrau Polyethylene Pipe Plant is an excellent example of Chevron’s long-term commitment to the diversification of Kazakhstan’s economy. The plant began operations in April 2003 and currently has the production capacity of 15,000 tons of polyethylene pipes per year. In 2011, the plant began production of metal-plastic pipe that can be used for heating and hot water supply. Chevron also started construction of a gate valve plant to produce valves used in water supply and natural gas transportation.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Safety, People, Environment Chevron develops energy with a commitment to protecting the safety and health of people, and safeguarding the environment. Since 2000, TCO has invested more than US$2.2b on projects to minimize environmental impact, allowing it to reduce gas flaring volumes by 94%. To eliminate the routine addition of sulfur inventory at the storage pads, and to increase TCO’s sulfur-granulation capacity, TCO plans a 2012 startup of its Sulfur Expansion Project. In the area of workforce safety, TCO celebrated an important milestone in April 2011 by achieving more than 10 million work-hours without a dayaway-from-work injury among TCO employees and contractors.

From 1993 through 2010, TCO made direct financial payments of about US$48b into Kazakhstan’s economy, including Kazakhstani employees’ salaries, purchases of Kazakhstani goods and services, tariffs and fees paid to state-owned companies, profit distributions to Kazakhstani shareholders and taxes and royalties paid to the Government. Chevron also holds a 20% equity stake in the Karachaganak field, one of the world’s largest oil and gas condensate

President Nazarbayev at Tengiz expansion inauguration, June 2008

CPC expansion ceremony in Atyrau, July 2011

Since 1993, the percentage of Kazakhstani citizens employed at TCO has grown from 50% to 85% of the workforce. Additionally, Kazakhstanis now make up 76% of managerial and supervisory positions.

Since 2003 Chevron has organized an annual national contest of children’s ecological artwork

Local Content and Suppliers Chevron is committed to the Republic of Kazakhstan’s efforts to increase the use of Kazakhstani goods and services and is supporting local content development through its affiliates at TCO and KPO. From 1995 to 2010, TCO spent US$9.97b on Kazakhstani goods and services including US$1.35b in 2010. In KPO, implementation of the local vendor development program has enabled the company to work with a large number of national companies. Since 1997, KPO has procured goods and services worth more than US$4b from Kazakhstani companies. Tengizchevroil focuses on building the capabilities of its employees and contractors and in 2010 alone spent about US$6m for training employees.

Professional development is an important issue for KPO as well. From 2008 through 2010, Chevron and KPO partners spent almost US$39m on local staff development. In 2010, local employees filled all the skilled and clerical positions with 91% of the professional and supervisory roles and 62% of the managerial position filled by national staff. All managers and staff at Chevron’s APPP are Kazakhstani. The plant has created about 130 local jobs. When completed, the APPP expansion and new gate valve plant will provide 180 new jobs in the Atyrau region with 160 jobs during the construction phase.

Scott Davis, Managing Director, Chevron Eurasia Business Unit General information on Chevron in Kazakhstan Established:

Kazakhstan operations were established in 1993

Employees:

95% of employees are Kazakhstan citizens

Business:

Chevron Munaigas in Almaty, Kazakhstan, oversees the company’s 50% interest in the Tengizchevroil Joint Venture; 20% interest in the Karachaganak Integrated Organization; 15% interest in the Caspian Pipeline Consortium, and 100% owned polyethylene pipe plant in Atyrau. Chevron’s Almaty office also oversees other Chevron activities in the Eurasia region

Committed to the Community Chevron’s community engagement programs are strategic investments in the future of communities and our business success. Our priorities are shared by our joint ventures. For example, from 1993 to 2010, Tengizchevroil spent more than US$645m to fund social projects for the community and employees in Atyrau Oblast and also our Karachaganak partners. Social investments have topped US$155m. Over the 40-year life of the Karachaganak final production-sharing agreement, this figure is anticipated to exceed US$500m.

Location:

Chevron Munaigas 240 G, Furmanov Street CDC Center One, 8th floor Almaty, 050059, Kazakhstan

Website:

www.chevron.com

Parent company:

Chevron Corporation

Chevron milestones in Kazakhstan 1993

1997

2001

2003

2008

2011

With the formation of Tengizchevroil, Chevron became the first major Western oil firm to work in Kazakhstan

Texaco, which later merged with Chevron, acquired a 20% stake in the Karachaganak Field, Kazakhstan’s second-largest producing petroleum reserve

Chevron, in conjunction with 10 companies and government partners, opened the Caspian Pipeline Consortium pipeline

Chevron opened a US$24m polyethylene pipe plant in Atyrau, the first such facility in Kazakhstan

Tengizchevroil completed the Sour Gas Injection and Second Generation Plant expansion, nearly doubling daily production of oil and natural gas

Chevron has launched produc tion of metal plastic pipes at polyethylene pipe plant in Atyrau. Start of the construction phase of CPC expansion

Success stories: foreign investors in Kazakhstan Ideas for potential players

Eurasian Natural Resources Corporation (ENRC)

Today, ENRC has established itself as one of the world’s leading natural resources groups and is well positioned to take a leading role in the global mining industry. ENRC operates in Kazakhstan, China, Russia, Africa and Brazil, and incorporates mining assets, processing and refining facilities as well as power generation capability and logistical and sales support functions. ENRC is now firmly established as a world-class business. The Group is comprised of six divisions: the Ferroalloys Division, the Iron Ore Division, the Alumina & Aluminium Division, the Energy Division, the Other Non-ferrous Division and the Logistics Division supported by central Sales & Marketing operation. Assets in the Republic of Kazakhstan comprise: Kazchrome, Zhairem GOK, SSGPO, Aluminium of Kazakhstan, Kazakhstan Aluminium Smelter (KAS), Eurasian Energy Corporation (EEC) and ENRC Logistics. Other assets, notably the Other Nonferrous Division, are mainly located in Africa, and include the copper and cobalt assets of the Central African Mining and Exploration Company (CAMEC), Chambishi Metals PLC and a 50.5% stake of Camrose Resources Limited (Camrose).

Vostochnyi Open Pit Coal Mine, Eurasian Energy Corporation

ENRC also owns Serov Group, a ferroalloys producer in Russia, Bahia Minerals BV and Mineração Minas Bahia SA (MIBA), iron ore mining projects in Brazil, a 50% stake in the Xinjiang Tuoli Taihang Ferroalloy Company in China (Tuoli), a 14.35% interest in Northam Platinum Limited, a major platinum producer in South Africa. ENRC currently employs over 70,000 people, of which 65,000 are located in Kazakhstan. During the successful IPO at the London Stock Exchange in 2007, ENRC attracted unprecedented US$3.1b and entered FTSE 100 Index in March 2008. The divisional structure of the Group supports the development of

increasingly diversified mining resources. The integrated business model serves to optimise efficiencies throughout production, processing, distribution and sales. Such integration helps to maintain lower production costs. Six operating divisions include four principal mining and refining operations supported by two divisions, which satisfy the associated energy and transportation demands. The Sales and Marketing operation provides a global coordination of the sales function. ENRC is the world’s largest producer of ferrochrome, on a chrome content basis, and one of the world’s significant exporters of iron ore and alumina by volume. The Group is also one of the largest electricity providers in Kazakhstan.

ENRC milestones in Kazakhstan, 1995—2008

1995

1996

1999

2004

2006

2007

2008

The Ferroalloy Division is established as Kazchrome is formed as a joint stock company. Its mining operations initially comprised of Kazchrome’s Donskoy GOK and Kazmarganets

The Iron Ore Division is established through the acquisition of SSGPO (Sokolov-Sarbai Mining Production Association).

The Logistics Division is established

The Group acquires Zhairem GOK.

Assets are reorganised into a single group of companies. The holding company is incorporated in England and Wales

ENRC floats on the London Stock Exchange, with a market capitalization on admission of approximately GB£6.8b

March — ENRC becomes a member of the FTSE 100 on the London Stock Exchange.

The Alumina and Aluminium Division is established through the merger of several mining and energyproducing enterprises and an alumina refinery. The Energy Division is established through the acquisitions of the EEC power station, and the division’s open pit coal mine and maintenance business

Success stories: foreign investors in Kazakhstan Ideas for potential players

Construction of a new aluminium smelter begins

April — The Group acquires the controlling interest in the Serov Group (a ferrochrome producer in eastern Russia) and certain related entities

At the moment the company is also constructing an Anode plant, which will further strengthen the position of the Group in the aluminium production market.

Kazakhstan Aluminium Smelter

In August 2011 the Group announced that its looks to invest about US$1b over next several years into the expansion of existing assets and the development of new ones. More than half of it, around US$55b, will be invested in Kazakhstan. In 2011 ENRC launched a number of investment projects in Kazakhstan which are of substantial importance for the economy of the regions and the country as a whole. Power Unit 2 at EEC has been completed and commissioned. This will help ENRC to increase its power generating capacity and improve ecological and health and safety performance.

One of the other significant projects in the ENRC CAPEX program, the construction of four new Direct Current (‘DC’) furnaces at the new ferroalloy plant in Aktobe with 440 ktpa capacity, is currently underway. The total project cost is approximately US$750m, with completion planned for 2013. This project will allow the company to strengthen its leading position in the ferroalloys market worldwide. Significant environmental and safety improvements are also expected as a result of this project.

Felix Vulis, CEO, ENRC PLC

In addition, on 1 April 2011 power unit 6 at Aksu Power station (EEC) was taken offline and placed under reconstruction. ENRC is known in Kazakhstan for being a socially orientated and responsible business, working extensively for the benefit of its employees and the communities in which the Group operates, undertaking significant charitable projects via the ENRC Komek Corporate Foundation. The expenditure on community social investment in Kazakhstan and Russia in 2010 amounted to US$58m.

Also, Aluminium of Kazakhstan has expanded its alumina production, reaching its targeted capacity of 1.7 mtpa.

General information on ENRC in Kazakhstan Established: 2007 Employees:

Over 70,000 people, of which 65,000 are located in Kazakhstan

Business:

ENRC is a leading diversified natural resources group with integrated mining, processing, energy, logistical and marketing operations. The Group is comprised of six divisions: the Ferroalloys Division, the Iron Ore Division, the Alumina & Aluminium Division, the Energy Division, the Other Non-ferrous Division and the Logistics Division supported by central Sales & Marketing operation.

Location:

Karaganda, Aktobe, Kostanai, Pavlodar regions, Astana and Almaty. Also incorporated are assets in Russia, China, Brazil and Africa.

Website:

www.enrc.com

ENRC milestones in Kazakhstan, 2008—2010 2008

2009

February 2010

April 2010

August 2010

September 2010

May — The Group completes the acquisition of 50% of Bahia Mineração Limitada, a Brazilian company focused on the development of an iron ore deposit, and a 50% stake in Xinjiang Tuoli Taihang FerroAlloy Co. LTD, a Chinese ferroalloys producer

February — A 25% interest in Shubarkol Komir JSC, a major thermal coal producer in Kazakhstan, is acquired.

The Group acquires a 90% interest in Chambishi Metals PLC, a processing facility in Zambia, together with a 100% interest in Comit Resources FZE, a Dubai-based marketing and sales company that historically has handled Chambishi’s copper and cobalt sales

The Group further diversifies through the purchase of a 12.2% interest in Northam Platinum Limited, a major platinum producer in South Africa

50.5% of Camrose Resources Limited (‘Camrose’) acquired. Camrose’s assets are high quality copper and cobalt exploitation licences located in the DRC

The Group acquires the outstanding 50% interest in Bahia Minerals BV and secures an option to purchase 100% of the outstanding shares of Block V Limited and Caera Minerals Limited, which together own Greystone Mineracao do Brasil Limitada (‘Greystone’). Greystone holds an iron ore mineral licence adjoining the BMBV project area

November — The Group diversifies further with the acquisition of CAMEC, a copper and cobalt producer in the DRC

Success stories: foreign investors in Kazakhstan Ideas for potential players

HSBC Bank Kazakhstan

HSBC Bank Kazakhstan is part of the HSBC Group, one of the world’s largest banking and financial services companies, has been operating in Kazakhstan since 1998. Its first office was located on Dostyk Avenue in Almaty and consisted of 30 staff members, who provided a small range of services to personal and corporate customers. The bank remained relatively small during this time, servicing a small but profitable portfolio of clients. Since 2007, the bank has undergone a period of significant expansion. New branches were opened in Astana, Atyrau, and Aktau in addition to a second branch in Almaty. Today, HSBC Kazakhstan is an established provider of financial services, offering a range of retail and wholesale banking solutions for personal, corporate, and institutional clients. Corporate and Institutional Banking, with a focus on leading international business, remains central to the HSBC Bank Kazakhstan business model, though this is now part of an organization that includes Retail Banking and Wealth Management (RBWM), Custodian Services and Global Banking and Markets. HSBC Bank Kazakhstan is well known as a leading international bank with an excellent reputation amongst large corporate companies and leading international businesses. Our corporate business also caters to corporate clients, offering lending and trade finance solutions. Significant investments have been made in both the bank’s people and infrastructure, enabling HSBC Bank Kazakhstan to offer first-class relationship management services backed by world-class processes and online capabilities.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Retail Banking and Wealth Management was launched in 2008 and has doubled in size over the past three years. With an expanding branch presence and a rapidly growing client base, RBWM is able to provide supplementary support to our corporate businesses to ensure our clients are provided with a full range of solutions. HSBC Bank Kazakhstan’s personalized banking and wealth management services offer exclusive benefits and privileges to a pool of esteemed customers. On 1 September 2010, HSBC Bank Kazakhstan acquired the retail banking assets of the Royal Bank of Scotland’s Kazakhstan business. Under the terms of the agreement, HSBC acquired personal customer loan and credit card portfolios, together with four branches, 80 ATMs and two support offices.

Lars Reiding, HSBC’s newly appointed CEO in Kazakhstan, noted that, “HSBC has become a reliable partner for local and international customers in Kazakhstan who benefit from our international experience, in-depth knowledge of our clients’ needs, readiness to bring them new services and ability to provide professional support to Kazakh businesses entering global markets. We have also developed a retail banking footprint that is successfully growing, and is serving local customer needs. HSBC sees continued excellent opportunities for development of our business in the country and we have strong ambitions to build and grow our business further.”

Today, HSBC Bank Kazakhstan employs over 700 people and is a top foreign exchange house in Kazakhstan, according to KASE. HSBC’s Global Banking and Markets business is one of the largest of its kind in the world. It combines sophisticated global coverage with detailed knowledge of local markets. Our services are offered through a network of 87 treasury sites in more than 60 countries and territories worldwide. HSBC Bank Kazakhstan can provide Global Banking and Markets products both within HSBC Bank Kazakhstan and also via offshore booking through HSBC Bank PLC. As a recognized market leader, HSBC Securities Services in Kazakhstan delivers a comprehensive range of services to institutional clients including banks, global custodians and crossborder institutional broker-dealers. Strong relationships with market authorities enable the business to influence, monitor and analyze changes in a market and report the impact to clients, ensuring they are up-to-date with the latest market developments. In May 2011, HSBC Security Services was awarded Best Sub-Custodian in Kazakhstan in Global Finance World’s Best Sub-Custodian Banks awards, 2011.

HSBC’s Corporate Social Responsibility function ensures that our business is managed responsibly and sensitively for long-term success. HSBC’s goal is not, and never has been, profit at any cost because we know that tomorrow’s success depends on the trust we build today. We address the expectations of our customers, shareholders, employees, and other stakeholders. Being one of the world’s biggest banks means the decisions we make can have a big impact. We aim to lend and invest responsibly, avoiding projects where the potential for social and environmental damage outweighs the economic benefits. At HSBC, we strongly believe that education and children are crucial to the development and prosperity of every country. By supporting these two spheres, we seek to help Kazakhstan in building confidence in the future.

Lars Reiding, CEO, HSBC Bank Kazakhstan

General information on HSBC Bank Kazakhstan Established:

1997

Employees:

Over 700

Business:

Retail Banking and Wealth Management Services, HSBC Securities Services, Corporate Banking, Global Banking and Markets

Location:

Esentai Tower 77/7, Al Farabi Avenue Almaty, 050040 Kazakhstan

Website:

www.kz.hsbc.com

Parent company:

HSBC Holdings PLC

Success stories: foreign investors in Kazakhstan Ideas for potential players

METRO Cash & Carry in Kazakhstan

METRO Cash & Carry — the name represents a great success story in modern commerce. For more than 47 years, the company has been serving professional customers with a range of products specially tailored to meet their needs. The company’s merchandise is outstanding in its diversity, quality and exceptional value. Above all, the company’s unparalleled expertise in providing fresh food products sets it apart from its competitors. Customers select their own purchases and take the goods with them. With this concept, METRO Cash & Carry opened for business in 1964, in Germany. The company has since grown to become the international leader in self-service wholesale, operating more than 700 outlets in 30 countries. METRO Cash & Carry generates over 80 percent of its revenue outside of Germany. Each year, the company opens around 40 new wholesale stores. The emerging markets of Asia and Eastern Europe are the main focus of this international expansion strategy. The key to the company’s dynamically successful internationalization is its highperformance business concept, which can be flexibly adapted to specific national and local customer needs. In China, specialties such as dim sum are as much a part of the product range as kofte is in Turkey and plum pudding is in England. Close cooperation with regional producers and suppliers builds trust and increases the level of acceptance METRO Cash & Carry enjoys at each of its locations. The wholesale stores employ almost exclusively nationals of the countries in which they operate — a policy that applies to all positions, including management. Despite widely varying local requirements, METRO Cash & Carry succeeds again and again in applying this model for success in new markets.

Success stories: foreign investors in Kazakhstan Ideas for potential players

METRO store in Astana

“We see strong potential for METRO Cash & Carry in Kazakhstan. We opened a wholesale store in Pavlodar in September this year and we plan to open two more stores in Aktobe and Ust-Kamenogorsk next year. Further expansion will target the largest cities in Kazakhstan during the first stage. All in all, our development vastly depends on our core customers — hotels, restaurants, cafes, traders, service companies, and offices. We will do everything possible to satisfy their core daily business needs, and they will guide us in our growth and development,” says Stephen Kreeger, Managing Director of METRO Cash & Carry in Kazakhstan. METRO Cash & Carry Kazakhstan lives up to its social responsibility not only as a reliable taxpayer and employer, but also as a pioneer in supporting local suppliers. In developing its own business, the company contributes to Kazakhstan’s progress. Hence, it sources over 90% of its merchandise from local suppliers, producers, importers, and distributors. In cooperating with over 400 suppliers, METRO Cash & Carry supports the development of modern trade infrastructure along its entire supply chain in Kazakhstan. It helps build direct

supply sources, reduces waste and supports farmers in getting better prices for their produce while simultaneously providing better quality products to its customers. Even today, a large proportion of goods spoil on the way to consumers due to outdated supply chains and the absence of refrigeration technology. The transfer of know-how represents a significant contribution to the improvement of the food supply. In other countries as well, METRO Cash & Carry combines business success with social responsibility. In India and Vietnam, for example, METRO Cash & Carry has initiated training programs for local farmers. In cooperation with the German Investment and Development Company (DEG), 40,500 sheep farmers and 1,150 fishing crews in India are receiving training in animal husbandry and food product processing. In 2010 in Astana, METRO Cash & Carry started the “neighborhood minimarket” program for the support and development of small and medium-sized businesses — the first such program in Central Asia. This program has already been successfully implemented in Europe, Russia, and Ukraine.

First store opening in Astana with President of the Republic of Kazakhstan Nursultan Nazarbayev

The main objectives of the program are developing enterprises, employing the local workforce during the expansion of large retail stores and supermarkets, improving sanitation, upgrading the service of small outlets, etc. Located on approximately five hectares owned by the company, METRO typically offers its professional customers everything they need under one roof.

Stephen Kreeger, Managing Director, METRO Cash & Carry in Kazakhstan

The high quality merchandise consists of a wide variety of 13,000 food and 12,000 non-food products, including an extensive range of local, national, and international specialties sold at favorable wholesale prices.

General information on METRO Cash & Carry in Kazakhstan Established:

September 2008

Employees:

1,535

Business:

Wholesale trade

Location:

16 B, Sain Street Almaty, 050031 Kazakhstan

Website:

www.metro.com.kz

Parent company:

METRO Cash & Carry International (Düsseldorf, Germany, over 100,000 employees)

METRO Cash & Carry milestones in Kazakhstan 1964

2008

2009

2010

2011

2012

The first METRO self-service wholesale store opens in Mülheim/Ruhr, Germany

MCC signed a Letter of Intent with the Ministry of Industry and Trade of the Republic of Kazakhstan

MCC opens its first store in Astana

MCC opens four stores: two in Almaty; one in Karaganda; one in Shymkent

MCC opens one store in Pavlodar

MCC plans two store openings: one in Aktobe; one in Ust-Kamenogorsk

Success stories: foreign investors in Kazakhstan Ideas for potential players

Microsoft

Microsoft was founded in 1975 by Bill Gates and is headquartered in Redmond, Washington, USA. It develops, manufactures, licenses and supports software products for various computing devices. The company has three divisions: Platforms and Services, Microsoft Business and Entertainment and Devices. The Platforms and Services division comprises Client, Server and Tools and Online Services Business segments. The Microsoft Business division includes the Microsoft Office system of programs, services and software solutions. The Entertainment and Devices division offers the Xbox video game system which includes consoles and accessories, third-party games and games published under the Microsoft brand as well as Xbox Live operations, research and sales and support. Microsoft has been operating in Kazakhstan since 2002. The company has opened a new chapter in the development of the IT industry in the country. It has taken a worthy place on the IT market in Kazakhstan and won the trust of customers and partners thanks to the high quality of its products and technologies, high standards of conducting business and also its social responsibility and corporate citizenship programs. Microsoft is heavily investing into the development of a strong local software industry, bringing the latest IT trends and innovations, such as cloud computing, to the country and improving the quality of IT education in Kazakhstan.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Microsoft Kazakhstan team

Microsoft’s business model is fully based on local partners. According to International Data Corporation (IDC), for every US dollar of Microsoft revenue in the CEE region, another US$14.73 were generated by other companies selling hardware or software that works on Microsoft operating systems or servicing that software. Development of a strong competitive partner system in the further exploration of new opportunities is one of the strategic priorities in Kazakhstan. The main Microsoft strategic priorities in Kazakhstan are: helping to transform education and learning, fostering local innovation, enabling jobs and opportunities and helping to drive performance and competitiveness. During the first years of establishing the local Microsoft organization, the team was in the typical start-up mode in strong emerging economic conditions. Later, it became time to mature the subsidiary from a small emerging MS subsidiary into a medium mature organization embedded in a network with peer organizations and headquarters.

Microsoft’s mission is to help people and businesses throughout the world realize their full potential. As the world’s largest software company, Microsoft helps to create social and economic opportunities wherever it does business. Microsoft’s technology innovations, people, partnerships and day-to-day business contribute to the prosperity of communities and the sustainability of the country. The company’s commitment to good corporate citizenship reflects its belief that social and economic opportunity always go together. Microsoft sees demonstrating the role of IT in building a sustainable and competitive economy based on strong innovative industries as one of its strategic tasks. Development of a strategic partnership between Microsoft and the Kazakhstani government is one of the strategic priorities in Microsoft’s business agenda. The company’s corporate mission is to ensure that the Kazakhstani government is able to build and use reliable and safe ITinfrastructure to ensure effective public services and realize its business and social tasks.

Microsoft pays great attention to initiatives in the field of education. Microsoft’s “Partnership in Education” is designed to help school teachers and students gain access to information technology and acquire the skills to use it. The program is being implemented in the framework of the “Agreement On Cooperation in the Field of Development of Modern Information Technologies in Education”, which was signed by the Ministry of Education and Science of the Republic of Kazakhstan and Microsoft in December 2004. The original agreement was for five years and was renewed for another five years in September 2009. The implementation of this agreement is aimed at increasing the level of information available at educational institutions in Kazakhstan as well as providing assistance to educators and students to realize their creative potential through the use of modern information technologies. During the life of the program more than 14,000 Kazakh teachers have received training on the use of information and communication technologies to more effectively organize the educational process. A child online safety campaign is Microsoft’s initiative to help governments, education leaders, and parents to protect children. It also empowers them with knowledge and such tools as Windows 7, Windows Live, and Internet Explorer 9 to be protected online. Delivering a safe online environment is one of Microsoft’s core citizenship commitments. Microsoft is working together with Kazakh educators to ensure that responsible and safe online behavior is widely understood by children, parents, educators and society.

Microsoft also actively cooperates with the leading universities of Kazakhstan in implementing such programs as Microsoft IT Academy, the international technologies cup “Imagine Cup”, online developers’ resources “DreamSpark” and the electronic postal service for educational organizations Live@edu. Output of Kazakh language versions of Microsoft’s most popular products, Microsoft Office and the Windows operating system, is one of the company’s contributions to the development of the IT industry in Kazakhstan. Other contributions include increasing computer literacy as well as improving the quality of teaching in the Kazakh language and the level of Kazakh language training for nonnative speakers. Microsoft exerts a lot of effort to develop ICT (information and communication technologies) in governmental structures and state documents flow in Kazakhstan, supporting one of the key priorities of the government’s agenda. Microsoft is a leader in the introduction of ICT terminology in the IT industry, generally supporting a transition to the state language. Kazakh language versions are available for the following Microsoft products:

Guenter Dahm, General Director of Microsoft Kazakhstan General information on Microsoft in Kazakhstan

Established:

1975 (Kazakhstan operations were established in 2002)

Employees:

Business:

IT industry

Location:

Ken Dala Business Center Block A, 6th floor 38, Dostyk Avenue Almaty, 050010 Kazakhstan

• Since June 2005: Windows XP and Microsoft Office 2003

• Since September 2008: Windows Vista • Since June 2010: Windows 7

Website: Parent company:

www.microsoft.com/ kazakhstan Microsoft Corporation

Success stories: foreign investors in Kazakhstan Ideas for potential players

Philip Morris International: holder of the first foreign investor’s license in Kazakhstan

Philip Morris International (PMI), the world’s largest international tobacco company, is represented in Kazakhstan by its affiliate, Philip Morris Kazakhstan LLP (PMK). PMK operates a state-of-the art factory in the Almaty region and has six regional branches throughout the country. These branches are focused on sales and distribution of PMK’s products. Since 1993, PMI has invested over US$401m in Kazakhstan. It was one of the first investors in the country and is particularly proud of the fact that it holds Foreign Investor License №1 from the state. A major portion of PMI’s investment went towards the construction of a Greenfield factory in the Almaty region, which began operations in 2000. Currently PMK manufactures a wide range of international brands for domestic sale in Kazakhstan and export to other Central Asian countries. In addition, five local heritage brands are produced here. PMK is the largest taxpayer among companies in the tobacco industry in Kazakhstan. Since the acquisition of the Almaty Tobacco Factory at the end of 2010, PMK has paid over US$1.1b in taxes and duties. Philip Morris International has always been committed to building the capacity of its local staff as well as creating the best possible working environment in every country in which it operates. Kazakhstan is no exception. The company has invested more than US$15m in the training and professional development of its employees. Each employee attends various on-the-job and off-the-job trainings and educational seminars on an ongoing basis. This has allowed local talent to replace key positions formerly filled by expatriates. Today there are only three foreign nationals among PMK’s staff of around 900 employees.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Philip Morris Kazakhstan production facilities

Philip Morris Kazakhstan office

At the same time, there are more than 20 Kazakhstani citizens working in managerial and directorship positions at Philip Morris International affiliates outside of Kazakhstan. In 2010, PMK’s accomplishments in employee professional development were recognized through an award given by the American Chamber of Commerce for “Most Innovative Development Program in Kazakhstan”. PMK is an active participant in charitable activities. Over the past 17 years, the company has contributed more than US$6m to local charitable programs. Philip Morris Kazakhstan is proud of the Honorary Diploma it received in 2000 from the President of the Republic of Kazakhstan for “Charitable Contributions and Sponsorship of Humanitarian and Cultural Activities”. In 2007, the American Chamber of Commerce in Kazakhstan presented PMK with its “Community Service” award, recognizing PMK’s corporate social responsibility programs as the top in the country.

Aibat Akhmetalimov, Managing Director, Philip Morris Kazakhstan LLP

Today PMK’s charitable activities focus on three main areas:

• Contributions to local communities in

which the company operates (Ily and Enbekshikazakh districts in the Almaty region);

• Vocational training support for the unemployed; and

General information on Philip Morris Kazakhstan Established:

1993

Employees:

900

Business:

Tobacco industry

Location:

1, Zhansugurov Street Otegen Batyr Village Ily district, Almaty Oblast 040700, Kazakhstan

Website:

www.pmi.com

Parent company:

Philip Morris International

• Projects aimed at social integration of physically impaired citizens.

Social contributions in the Almaty region are governed by annual memorandums of understanding between PMK, regional authorities and local NGOs. PMI believes that initiatives in the area of social responsibility should be underpinned by a sense of true partnership among business, government authorities and institutes of civil society. Philip Morris International is confidently unfolding a new chapter of its history in Kazakhstan, a country of talented people and vast economic potential which has a bright future.

Success stories: foreign investors in Kazakhstan Ideas for potential players

The Royal Bank of Scotland

We are a flexible global bank that delivers in a fast-moving world. The Royal Bank of Scotland Group is one of the world’s foremost financial services companies. We work closely with our personal, commercial and large corporate and institutional customers to address their financial needs. The Group’s brands include The Royal Bank of Scotland and RBS Coutts internationally, NatWest in the UK, Citizens and Charter One in the United States as well as other well known financial services providers. Global Banking & Markets (GBM) is the investment banking arm of the RBS Group which provides financing and risk management products to large corporations and financial institutions around the world. Our business offers solutions to our clients and brings together an extensive range of capabilities including debt and equity financing, risk management and corporate finance advisory services. Solutions are developed and delivered via our committed experts, all of whom have deep client and sector knowledge. Across GBM we are committed to our clients and demonstrate this by building close relationships to help them achieve their objectives. They benefit from our strengths in execution, distribution and our international reach. We make it a priority to listen to our clients and to fully understand their business and the environment in which they operate. As a result of this we can provide access to a broad range of products and services, suitable to their requirements, through our worldwide network which spans Europe, the Middle East, Africa, Asia Pacific and the Americas: we have a presence in all major financial hubs. From single trades to complex international deals, we have the capability to support clients whatever their ambitions may be.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Our clients operate globally, so we are firmly committed to maintaining an extensive worldwide presence. With regional trading hubs in the world’s key financial centres, our capabilities are available around the clock. Welcome to RBS (Kazakhstan) Our goal is your financial success. Our drive and operational strength can help you achieve it. We have the global scope and expertise you need to make your ambitions a reality. Our local knowledge means we also understand your requirements as a business, corporation or financial institution. We design our products and services according to your needs and aspirations — wherever you are in the world. RBS (Kazakhstan) has been the successor of ABN AMRO Bank Kazakhstan since July 17, 2008. This follows the global acquisition of ABN AMRO in October 2007 by an RBS-led consortium. Now RBS (Kazakhstan) builds on its already strong position as one of the leading foreign banks in

Kazakhstan offering investment and commercial banking products. In 1994 we became the first foreign bank to begin licensed operations in Kazakhstan, and today our branch network in Kazakhstan covers the commercial capital, Almaty, the nation’s capital, Astana, and the oil and gas capital, Atyrau. RBS (Kazakhstan) is an integral part of the RBS Group core network for corporate and institutional clients. The Global Banking & Markets and Global Transaction Services businesses in Kazakhstan will continue to build on our local presence of over 15 years, during which we have achieved leading market positions and established close banking relationships with both Kazakh and international companies. We are a leading global investment bank with a particular strength in the energy sector. Our excellent global equity placement capabilities, the leading position in capital markets and corporate finance for Kazakh clients and unique global and Kazakhstan-specific experience makes us the best positioned investment bank in Kazakhstan.

The corporate and investment banking businesses are maintained from a regional footprint across the country, including Astana and Atyrau, and directed from our recently opened new Head Office in Almaty. Leveraging its banking license, a significant local balance sheet and an experienced local team, RBS remains a leading foreign bank in Kazakhstan.

RBS (Kazakhstan) Products and Services RBS (Kazakhstan) provides a wide range of products and services including M&A advising, IPO and Bonds issuance, Lending Solutions, Trade Advisory and Cash Management Solutions. Community Investment

• RBS (Kazakhstan) has a long-standing

We want to play a positive role in the communities in which we operate. This begins with providing the services our customers want, and operating in a sustainable way. We then aim to go further through community programmes which make a genuine difference in a number of focused areas.

• RBS (Kazakhstan) has been frequently

In Kazakhstan we provide long-term support to social organizations such as the Veterans’ Councils and orphanages in Almaty and Atyrau.

Credentials history in arranging debt capital market transactions for Kazakh issuers and is consistently ranked among the top Arrangers of Fixed Income issues and Syndicated Loans recognized as the Best Debt House in Central Asia and Kazakhstan by Euromoney’s Awards for Excellence

• RBS (Kazakhstan) has been awarded

Rudi Geerdink, Country Executive, RBS (Kazakhstan)

General information on RBS (Kazakhstan)

the Banker Deals of the Year award for its role in the largest ever IPOs from Kazakhstan

• RBS has been ranked number one for

bond and equity issues for companies operating in the Kazakhstan oil and gas sector

• RBS (Kazakhstan) has been

recognized as the leading bank in the country league tables for FX market during the past 4 years

Established:

1994

Business:

Banking, Financing, Investments

Location:

Almaty, Astana, Atyrau

Website:

www.rbs.kz

Parent company:

RBS N.V.

RBS (Kazakhstan) milestones in Kazakhstan 1994

1996

2000

2003

2008

2010

RBS (Kazakhstan) becomes the first foreign bank to begin licensed operations in Kazakhstan

The first Ratings Advisory and US$200m Debut Eurobond for the Republic of Kazakhstan is issued

RBS (Kazakhstan) becomes the first international bank to open a branch outside of Almaty — in Atyrau

The first Astana Branch is opened

The name of the company is reregistered to the present JSC SB “RBS (Kazakhstan)”

A new head office is opened in the Almaty Financial District

Success stories: foreign investors in Kazakhstan Ideas for potential players

Siemens in Kazakhstan

Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technological excellence, innovation, quality, reliability and internationality. The company is the world’s largest provider of environmental technologies. More than one-third of its total revenue stems from green products and solutions. At the end of September 2010, Siemens had around 336,000 employees worldwide. In Kazakhstan, the company operates in three economic sectors: Industry, Energy and Healthcare. The Siemens Industry Sector offers products and solutions to customers working in production, transport and building. The sector consists of the following divisions: Industrial Automation, Drive Technologies, Industrial Solutions, Mobility, Building Automation, and OSRAM. Using comprehensive technologies for process equipment and software, as well as extensive, sector-wide solutions, the Industry Sector improves the performance and efficiency of its customers in industry and infrastructure. The Energy Sector at Siemens primarily offers its products to power suppliers and industrial facilities, especially those in the oil and gas industry. The sector is a leader in all six areas of the power market: Fossil Power Generation, Renewable Energy, Oil & Gas, Energy Service, Power Transmission, and Power Distribution. The company’s extensive service network brings the sector even closer to its customers. Siemens’ activities in the Healthcare Sector consist of three divisions responsible for innovative products and integrated solutions, as well as consulting and IT services in health.

Success stories: foreign investors in Kazakhstan Ideas for potential players

Siemens office in Almaty

The sector offers a unique and extensive portfolio of medical services from case definition and image transmission to laboratory diagnostics and IT-based processing. In Kazakhstan, Siemens has implemented a number of projects which affect national infrastructure. Among the company’s key successes is the Siemens Mobility Division, which completed a turn-key project to equip a postal sorting center for KazPost JSC. Siemens has also supplied components for 22 passenger locomotives for NC Kazakhstan Temir Zholy JSC. Additionally, the company has successfully delivered equipment and integrated solutions for Aluminium of Kazakhstan, Kazatomprom JSC and ArcelorMittal in Temirtau. Another noteworthy project is the high-voltage frequency converter supplied to the Kegatch oil field for KazTransOil JSC by Siemens’ Drive Technologies Division.

The company’s OSRAM lamps illuminate the Baiterek Independence complex, the Senate building, Supreme Court and many other public buildings in Astana, as well as municipal and residential complexes throughout Kazakhstan. OSRAM implemented projects to highlight key features of the 2011 Asian Games — the ice stadium in Astana and the Chimbulak ski slopes in Almaty. The Industrial Automation and Drive Technologies Divisions reconstructed one hot-rolling mill stand for ArcelorMittal. At the present time, the Mobility Division of Industry Sector is implementing a project for the reconstruction of eight tram and trolleybus traction substations for the state company “AlmatyElectroTrans” which will allow it to enhance the transportation system and improve the general ecological environment in the city.

Additionally, Siemens has implemented several energy-efficient projects in Kazakhstan. During the first stage of upgrading Kazakhstan’s national power distribution system, for example, Siemens supplied high-voltage equipment and computerized 68 substations for KEGOC JSC in order to secure a stable power supply. Another outstanding project is the Ermensay substation 220/110/10 kV in Almaty. For the first time a complete switchgear with hexafluorated sulfur insulation 220 kV was delivered to Kazakhstan. It is also the first time that equipment was assembled in Kazakhstan using the project management experience of local engineers in relay protection and automation. Siemens’ Oil & Gas Division has successfully partnered with key oil and gas companies in Kazakhstan. In 2006, the company installed two 45 MW gas turbines on the Kalamkas gas field for Mangistaumunaigas. In 2010, new gas turbines for the Caspian pipeline extension project were ordered for the Caspian Pipeline Consortium. Siemens has also extended a project to service two gas turbines previously set up by the Caspian Pipeline Consortium. Another project of importance is the delivery and mounting of a system of automatic control, monitoring and fire protection for a pipeline in western Kazakhstan.

In 2009, Siemens supplied Kazakhstan with some of the most advanced medical equipment in Central Asia — in particular, a magnetic resonance tomography unit (МRT 3 Tesla Verio) for the Diagnostic Centre in Astana. The unit allows for detailed 3D imaging of the human body, while remaining convenient for the patient. At the end of 2009, Siemens Kazakhstan began operating a Diagnostics Division. By this time, the company had an established network of partners and had already implemented its first projects in Astana, Aktau and Pavlodar. As a good local citizen, Siemens cooperates with a number of state institutions in Kazakhstan. The company supports local orphanages and boarding schools. Most recent projects aimed at talented and gifted students were implemented in cooperation with leading local universities.

Kay Zwingenberger, Director and Chief Executive Officer of Siemens LLP in Kazakhstan

General information on Siemens in Kazakhstan

Siemens also sponsors the Kazakh Kurmangazy National Conservatory in Almaty.

Established:

April 1994

Employees:

Over 200

Business:

Electronics and Electrical Engineering

Location:

Khan-Tengri Business Centre 117/6, Dostyk Avenue Almaty, 050059 Kazakhstan

Website:

www.siemens.kz

Parent company:

Siemens AG (Munich and Berlin), over 336,000 employees

Siemens milestones in Kazakhstan 1994

1999

2000—2007

Representative office of Siemens AG is opened in Kazakhstan

Siemens LLP affiliate is established

Regional offices are opened in Astana, Atyrau, Temirtau, Pavlodar and Aktau

Success stories: foreign investors in Kazakhstan Ideas for potential players

TeliaSonera: Contributing to a world with better opportunities

TeliaSonera provides network access and telecommunication services that help people and companies communicate in an easy, efficient and environmentally friendly way. We are now present in 20 countries, including Kazakhstan, with around 60 million subscriptions in our consolidated operations and 100 million in associated companies. TeliaSonera is currently the fifth largest telecommunication services operator in Europe by market capitalization. TeliaSonera provides telecommunication services in Nordic and Baltic countries, the emerging markets of Eurasia and in Spain. In Eurasia, TeliaSonera has majority holdings in the leading mobile operators in seven markets: Kazakhstan (Kcell), Azerbaijan (Azercell), Uzbekistan (Ucell), Tajikistan (Tcell), Georgia (Geocell), Moldova (Moldcell), and Nepal (Ncell). We are also minority owners of MegaFon in Russia and Turkcell in Turkey (including Turkcell’s subsidiaries in Ukraine and Belarus). TeliaSonera is a company with over 100 years experience in telecommunications and is recognized as an industry leader. We are proud of our heritage as pioneers of the telecom industry — a position we have achieved by being innovative, reliable and customer-friendly. We act in a responsible way, based on a firm set of values and business principles. Our services form a major part of people’s daily lives — for business, education and pleasure.

But history doesn’t stop here — we want to be recognized as an industry leader in the future as well. Today, TeliaSonera continues building on its heritage by introducing the next generation of mobile technology — 4G. In December 2009, TeliaSonera introduced 4G services in the capitals of Sweden and Norway, and became the first operator in the world to commercially launch the technology. Today, TeliaSonera commercially operates 4G services in Sweden, Norway, Finland, Denmark, Estonia and Lithuania. TeliaSonera is an international company with a global strategy, but wherever we operate we act as a local company. We have a strong track record of creating value in Eurasia. In the early 1990s, we were already founding partners in some of the mobile operations in this region. Being part of TeliaSonera means that our operations around the world are able to benefit from our rich expertise, knowledge and know-how in order to implement pioneering technologies at an early stage.

Working together with the major vendors in the Nordic region, it was TeliaSonera who invented and introduced the mobile phone technology that now serves as the basis for telecommunication all over the world. TeliaSonera launched the world’s first mobile network in Sweden in 1956. The first competitor mobile network was established only seven years later, in 1963. 24

Success stories: foreign investors in Kazakhstan Ideas for potential players

TeliaSonera head office in Stockholm

TeliaSonera in Kazakhstan We are a significant long-term industrial investor in Kazakhstan through our subsidiary, GSM Kazakhstan/Kcell, and we play an important role as an infrastructure builder, employer and taxpayer in the country. Since its establishment in 1998, Kcell has invested more than US$1.7b in Kazakhstan and paid an additional US$1.8b in taxes. In addition to this, Kcell has directly and indirectly created around 40,000 jobs in Kazakhstan. We have a long history of success as a result of fair and ethical business practices. Today Kcell is the leading mobile operator in Kazakhstan with an unrivalled track record for more than a decade. We have been driving the development of Kazakhstan’s mobile communication market by bringing in the most modern telecommunication technologies and industry knowledge. This is the reason why today, half of Kazakhstan’s population prefers Kcell’s services.

TeliaSonera 4G modem

Lars Nyberg, CEO and President of TeliaSonera

Kcell operates with respect to local culture and traditions and with the principle of giving back to society. The company has been driving the concept of socially responsible business in Kazakhstan. Every year, Kcell implements approximately 40 social programs and projects in the fields of education, culture and sports, investing millions of US$ into the social sphere. The company also develops special services for people with limited capabilities. In 2011 Kcell became a partner of the 7th Asian Winter Games and World Islamic Economic Forum. TeliaSonera is a well respected player and good corporate citizen that values its position in Kazakhstan. By combining local expertise and international experience, we together with our local partner are developing our business to further strengthen our leadership

in Kazakhstan’s mobile communications market. The Republic of Kazakhstan is one of the leading economies and driving forces in Central Asia, where the Government of Kazakhstan demonstrates its firm commitment to developing cross border relationships and strengthening the economy by creating a business climate that attracts domestic and foreign investments. Therefore, Kazakhstan is an important regional hub for TeliaSonera’s operations in this part of the world.

General information on GSM Kazakhstan/Kcell Established:

1998

Employees:

Approximately 1,400

Business:

Telecommunication / Mobile Communication Services

Location:

Head office in Almaty, representative offices in all major cities of Kazakhstan

Website:

www.kcell.kz

We are a long-term investor in Kazakhstan, Parent building our success on high quality company: networks and services. TeliaSonera is committed to continue investing in the development of telecommunication infrastructure and services in Kazakhstan, including 3G and beyond, thereby contributing to the future prosperity of the country and its citizens.

TeliaSonera AB (51% through its subsidiary Fintur Holdings B.V.), JSC Kazakhtelecom (49%)

TeliaSonera milestones in Kazakhstan 1998

1999

2008

2009

2011

“GSM Kazakhstan OJSC Kazakhtelecom LLP” (Kcell) was founded as a limited liability partnership with the stateowned fixed-line operator JSC Kazakhtelecom

Kcell started commercial operations in the GSM 900 standard

Kcell obtained GSM 1800 license and implemented GPRS/EDGE technology and such services as MMS, WAP, mobile internet — for the first time in Kazakhstan

Kcell subscription base exceeded 7 million. The Kcell mobile network covered all Kazakhstani settlements with a population of over 5,000 inhabitants

Kcell subscription base exceeded 9.7 million. Kcell obtained 3G GSM 2100 license and began implementing 3G network throughout the country

Success stories: foreign investors in Kazakhstan Ideas for potential players

The Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan

The Foreign Investors’ Council (FIC) was established to promote direct dialogue between the Government of Kazakhstan and foreign investors. The mission of the FIC is to improve the investment climate in Kazakhstan for the benefit of foreign investors as well as local and national companies. The body is also tasked with promoting economic development in Kazakhstan. FIC’s main objectives include developing and submitting recommendations to the President and the Government of Kazakhstan on fundamental investment and economic development issues including:

• Key areas of investment policy • Enhancement of the investment climate

• Improvement of the legal and

regulatory framework for investments

• Improvement of investment and

legal conditions for diversifying the economy and developing the non-extractive sector and small and medium enterprises

• Further integration into the global economy

• Strategies for attracting further

FIC working groups analyze different aspects of investment activities and provide relevant recommendations to council members and state bodies. The Committee on Investments The Committee on Investments of the Ministry of Industry and New Technologies of the Republic of Kazakhstan is the executive body of the FIC. The Committee on Investments is in charge of the FIC operations and performs the following functions:

• Organizing and conducting FIC Plenary and Interim Sessions

• Monitoring and controlling the

implementation of decisions outlined in the minutes of FIC Plenary and Interim Sessions

• Analyzing the structure of the FIC,

developing proposals on accepting new FIC members

• Providing administrative support to FIC activities

investment programs and projects

FIC joint Working Groups The FIC holds the following joint working groups between government officials, representatives of international organizations and foreign companies:

• Investment Image Enhancement Working Group

• Legal Working Group • Taxation Working Group • Oil & Gas Working Group • Operations Working Group 26

Success stories: foreign investors in Kazakhstan Ideas for potential players

KFICA assists foreign FIC members in their role of advising the Government of Kazakhstan and provides them with ongoing informational, logistical, and technical support. KFICA plans and organizes FIC Plenary and Interim Sessions in cooperation with the Committee on Investments as well as other government counterparts. It also coordinates regular meetings and activities for the five joint FIC Working Groups and develops partner relations on behalf of its foreign members with government officials, state agencies, foreign businesses, diplomatic communities, and media and business associations.

• Analyzing FIC activities and its joint working groups

• Examining, developing and

Kazakhstan Foreign Investors’ Council Association (KFICA) contacts

implementing proposals aimed at improving FIC efficiency

foreign investment

• Implementation of major international

Kazakhstan Foreign Investors’ Council Association (KFICA) The Kazakhstan Foreign Investors’ Council Association was established at the initiative of foreign members of the FIC as the official Secretariat representing foreign members.

The Committee on Investments contacts

Location:

Suite 17, Transport Tower 47, Kabanbai Batyr Street 010000, Astana Republic of Kazakhstan Tel.: +7 (7172) 242 168 +7 (7172) 241 540 +7 (7172) 241 539 Fax: +7 (7172) 243 845 Email: committee@fic.kz

Location:

Kaskad Business Center 3rd floor 6/1, Kabanbai Batyr Street 010000, Astana Republic of Kazakhstan Tel.: +7 (7172) 925 550 Fax: +7 (7172) 925 553 Email: coordinator@fic.kz

Website:

www.fic.kz

About KAZNEX INVEST

KAZNEX INVEST — the national agency for exports and investment was established on 2 April 2010. KAZNEX INVEST promotes the export of non-extractive industry products and specializes in the attraction and support of direct foreign investment in priority sectors of the economy. KAZNEX INVEST is a state funded organization which provides services on a free of charge basis. KAZNEX INVEST is a member of the United Nations Conference on Trade and Development (UNCTAD) of the World Trade Organization (WTO). In February 2011, KAZNEX INVEST became a member of The World Association of Investment Promotion Agencies (WAIPA). The WAIPA was created in 1995 and currently represents 244 national and sub-national agencies from 162 different countries. It provides them with opportunities for networking and exchange of best practices in investment promotion. KAZNEX INVEST’s client group includes: 1. Current and prospective exporters of non-extractive industry products 2. Current buyers of Kazakhstan’s products 3. Initiators of investment projects in priority sectors of the economy 4. Prospective foreign investors

KAZNEX INVEST’s export support services include:

• Education of entrepreneurs on export activities

• Diagnostics of an enterprise’s export capacities

• Identification of products with export potential

• Identification of relevant export markets

• Support in search of prospective buyers for export products

• Organization of trade missions,

meetings with buyers, business forums

KAZNEX INVEST provides support to businesses operating in priority sectors of the economy: metallurgy, information and telecommunication technologies, the nuclear and chemical sector, alternative energy, machinery, construction, pharmaceuticals, biotechnology, agriculture, light industry, tourism and space. KAZNEX INVEST organizes road shows for prospective foreign investors, meetings with the Government of Kazakhstan and the business community and provides information and advisory support.

• Support in concluding export contracts

• Identification of optimal transport routes for delivery of exported products

• Partial compensation of costs in support of export transactions

• Support in access to markets for humanitarian procurement

KAZNEX INVEST contacts

KAZNEX INVEST’s services in support of foreign investment include:

• Identification of investment projects that require financing

Location:

Ansar Business Center, 2nd floor 25, Syganak Street 010000, Astana Republic of Kazakhstan Tel.: +7 (7172) 799 393 Fax: +7 (7172) 799 392 Email: info@kaznex.kz

Website:

www.kaznex.kz www.invest.gov.kz

• Support in search of prospective foreign investors

• Organizing meetings and business forums between initiators of an investment project and foreign investors

• Support in concluding investment agreements

• Foreign investors’ advisory support

For further information about Kazakhstan and the ample investment opportunities it offers please visit www.invest.gov.kz

Success stories: foreign investors in Kazakhstan Ideas for potential players

Kazakhstan Foreign Investors’ Council Association Kazakhstan Foreign Investors’ Council Association (KFICA) was established at the initiative of foreign members of the Foreign Investors’ Council (FIC) chaired by the President of the Republic of Kazakhstan as the official Secretariat representing the FIC foreign members. KFICA assists FIC foreign members in their role of advising the President and the Government of the Republic of Kazakhstan on matters related to foreign investment issues. For further information on FIC and KFICA please visit www.fic.kz © 2011 Kazakhstan Foreign Investors’ Council Association All rights reserved. This publication has been carefully prepared by FIC Investment Image Enhancement working group, based on the information submitted by companies participating in this publication and members of the working group. This publication is intended for general guidance only. Kazakhstan Foreign Investors’ Council Association, any company participating in this publication or any working group member can accept no responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication.