June 6, 2024

Kanat Balykbayev: SEC "Almaty" attracted 1.1 trillion tenge to the city's economy

"Social Business Corporation "Almaty" (SEC) was established in 2010 and has been working effectively since then. The main task of the corporation is effective asset management, business support. Chairman of the Board of the Almaty SEC Kanat Balykbayev told Jasqazaq.kz about the current work of the SEC.

Kanat Olzhabekovich, what contribution does SEC Almaty make to the economic development of the metropolis?

SEC Almaty is a key institution for the development of the city, a bridge between the resources of the state and the business community. Jointly with our subsidiaries, we implement socially important and investment projects of high priority for the city. These include financing of local micro, small and medium-sized businesses on preferential terms, renovation of dilapidated housing, development of the industrial zone, and stabilization of prices for food products of social importance. 

SEC's own projects are worth mentioning in detail. To date, we are involved in the implementation of 39 city projects, including 27 social, 10 investment and 2 budgetary projects. Total volume of attracted investments on them is over KZT 645 billion. Another KZT 498 billion was attracted under the industrial zone. 

In total, more than KZT 1.1 trillion has been invested in the city's economy through SEC as of the end of 2023.

What role is assigned to the industrial zone and small industrial parks in the development of Almaty?

Industrial zone was established in 2015 to provide state support for private entrepreneurship and development of priority industries in the city.

Almaty's industrial zone is an important tool in the industrial, social and economic development of the city, providing infrastructural support to production projects. In addition to large enterprises, the Industrial Zone also accommodates small and medium-sized companies. 

Especially for them, under the Almaty Business-2025 program, small industrial parks (SIP) are being built - territories for launching production facilities, where entrepreneurs are provided with ready-made premises on preferential terms with already connected communications.

To date, more than 90 projects have been implemented in the Industrial Zone, including SIP, and more than 11 thousand jobs have been created. Its participants are companies from such sectors as mechanical engineering, construction industry, chemical and light industry, pharmaceutical and food industry, logistics and realization of industrial parks. 

One of the objectives of the SEC is the renovation of dilapidated housing. What progress has been made regarding it?

Indeed, SEC is the authorized organization for implementation of the “Almaty Housing Renovation Program for 2021-2025”.

Via our subsidiary company “Capital Construction Company of Almaty Akimat” LLP under the program together with investors we have been performing demolition of dilapidated houses with expired service life that are not earthquake-resistant and pose a threat to people's lives.

According to the program terms, owners of dilapidated housing can receive an equivalent apartment in a new building. Residents are provided with free temporary housing during construction, i.e. without any rent. At the same time, they have the opportunity to move permanently into a finished home from the Capital Construction Enterprise housing stock.

To date, 64 dilapidated houses have been demolished under the program, and 23 (5-12-storey) new residential buildings have been built in their place. More than 2,200 people were relocated to 630 apartments. Now there are 11 houses under construction in Almaty. In total, the city has defined 1,388 dilapidated houses with expired life expectancy, of which 688 are planned to be relocated by 2030 and are home to more than 30,000 people. I note that 90% of resettlement is planned at the expense of investors. Total planned investment in the renovation of dilapidated housing is 1 KZT 1,120 billion, of which KZT 120 billion is planned to be allocated by 2030 at the expense of the local budget and KZT 1 trillion at the expense of investors. 

Almaty leads the country in entrepreneurship development. What business financing projects does SEC Almaty implement?

In order to develop entrepreneurship in the city of Almaty, the Almaty Business-2025 program was adopted at the end of 2019. One of its directions is to increase the availability of business financing.  For this purpose, Almaty Finance LLP and its subsidiary Almaty MFO were established, which became part of the SEC group of companies.

Organizations lend to businesses on favorable terms. Funds received can be used by entrepreneurs to purchase equipment, raw materials, replenish working capital, and cover other business needs.

Priority for consideration are industrial, innovative, export-oriented projects, creative industry projects, small industrial parks, as well as projects implemented in the special economic and industrial zones of Almaty.

Almaty Finance and Almaty MFO offer business development loans to start-up and existing micro, small and medium-sized enterprises at a preferential rate of 2% and 6% per annum for 7 years. 2% - for projects of low-income families with many children, disabled people of 1 and 2 groups, as well as families raising disabled children, and residents of small industrial parks.  6% - for start-ups and existing SMEs of Almaty

Maximum loan amount in Almaty Finance is KZT 500 mln, in Almaty MFOs - KZT 73,840,000.

At the end of Q1 of this year, Almaty Finance and Almaty MFOs totaled about 40 projects. In total, the organizations have supported about 600 business projects worth almost KZT 30 billion.

In addition to the construction of a small industrial park, business development loans were provided to entrepreneurs implementing production and processing projects, health care, education, social entrepreneurship, creative economy and tourism. Funding was also provided for projects in sports, trade and public services.

SEC is responsible for the food security of the city. Can you tell what kind of work is being done in the city as part of food staples?

SEC is a specialized organization that is responsible for implementing price stabilization mechanisms for socially important food products (food staples) in Almaty. There are 19 products on food staples list.

There are two types of food staples price stabilization mechanism: formation and management of the regional stabilization fund for food products and provision of soft loans to business entities under the “negotiable scheme”.In order to create and maintain strategic stocks of certain food staples, SEC enters into forward contracts for their supply, which allow to meet the demand of the population in a timely manner, preventing price increases, especially during off-season periods. For example, 3,000 tons of sugar and 1,000 tons of rice were purchased in 2023. From October 2023 to the present, these products have been sold through the city's retailers.

Concessional loans under the revolving scheme are available from 2019 on repayment, secured and repayment terms. Crediting is carried out by concluding an agreement with commodity producers, official suppliers (distributors) and retailers of food staples. Loans are granted for a term of 3 months or more at 0.01% per annum. Measures allow producers to increase production volumes and retailers to contract the necessary volumes in advance at an attractive cost and fix marginal prices on the shelves. 

From 2019 to 2023, SEC has entered into 34 contracts with businesses to produce and sell over 190,000 tons of products through the city's retail facilities. For example, in 2023, SEC issued loans totaling KZT10 billion for these purposes, which allowed contracting the supply of 34,000 tons of food staples.

In addition to food staples price stabilization mechanisms, the SEC undertakes a number of other activities to ensure food security in the city. For example, SEC has 28 social trading pavilions where agricultural products are sold at prices recommended by the Almaty Department of Entrepreneurship and Investments, which are 10-15% lower than average market prices. 

Weekend fairs are also organized on a weekly basis in 4 districts of the city (Medeu, Almalin, Bostandyk, Auez), where city residents can buy fresh farm products at reduced prices. A total of 388 such fairs were held in 2023. 

The main tasks of the SEC for future periods are effective management of the stabilization fund, improvement of mechanisms for price stabilization in food staples, increased coverage and involvement of retail chains in price stabilization measures and development of food infrastructure, including by attracting private investment.