After 10 years of downtime, a tannery in Semey was launched

On June 3, 2020, a subsidiary of the Baiterek holding - Investment Fund of Kazakhstan JSC and Semey Tannery LLP, which is part of the international group of companies Kusto Group, signed a property lease agreement with the right of subsequent purchase of a tannery in Semey.

The plant is of interest to the domestic investor as part of the overall strategy for the development of livestock projects in Kazakhstan and will become a consumer of by-products of the agricultural industry - cattle skins (cattle).

The investor prepared the territory and equipment of the plant for launch within two months. The plant was launched in its main activity: the processing of cattle skins, the production and sale of leather products - an export-oriented semi-finished product of chrome tanning wet blue.

- Now more than 60 people work at the plant, technical specialists who previously worked here and specialists from the local slate plant are involved. The number of personnel will increase as the plant's capacities are loaded, we plan to recruit up to 200 people. In June-July, we carried out all the necessary work: cleaning the sewerage system, guarding the facility, checking the equipment performance. So, somewhere, partial repairs were needed, the roof was restored, the premises for unassignments, showers were made for workers. As of today, a consignment of raw materials has been received, we have carried out commissioning work, have released an experimental batch of more than 3000 square meters of finished products - semi-finished product wet blue, - said Ruslan Bisenov, Executive Director of Semey Tannery LLP.

The production of semi-finished chrome-tanned high-quality wet blue leather is a labor-intensive three-phase tanning process that requires specialized knowledge. In addition to high quality, these products are distinguished by their durability, acceptable cost price and, accordingly, the low price of the material. This semi-finished product can be used for the production of jackets, shoes, accessories - all kinds of covers, belts, and so on.

The maximum capacity of the plant can be up to 1.7 million square meters of wet blue semi-finished product per year. Raw materials and necessary chemicals used in the production technology are supplied by local suppliers, and are also partially purchased from Russia.

Currently, IFC is working to transfer problem assets into a competitive environment with the aim of their further launch.

The tannery entered the Fund's asset portfolio as a problem project in 2014. In connection with the bankruptcy of the ex-owner of the plant, the Fund, in order to preserve the plant, was forced from November 2019 to transfer the property complex of the enterprise to the balance sheet and bear the costs of maintaining the asset until the investor was attracted.

At the moment, the ex-owner is challenging the court's decision, which prevents the procedure for the complete transfer of the complex to the investor in order to modernize it.

MGK Kusto Group - founded by businessman E. Tatishev with partners in 2008. Kusto Group has experience in building businesses in various fields and operates in 10 countries. Key markets of the Kusto Group are agribusiness, oil and gas, real estate, building materials.

In Kazakhstan, the Kusto Group invested in a large agricultural project Kazbeef - breeding cattle production, feedlots, meat processing.

JSC Investment Fund of Kazakhstan is a state development institution and management company in the field of restructuring and management of distressed assets. The fund is part of the structure of JSC NMH Baiterek.