1. Republic of Kazakhstan “Ontustyk” SEZ A Competitive Base for Textile Investment

2. A strategic location in Central Asia India Pakistan Turkey

3. Political and Social Stability Trade partners – 175 countries Forthcoming affiliation in World Trade Organization Kazakhstan entered Customs Union with the countries of Eurasian Economic Community (The Republic of Byelorus, Kyrghyz Republic, Russian Federation, Republic of Tadjikistan) Free trade agreement with EU countries in textile trade Long-Term State support - Regulatory basis - Safety - Infrastructure (necessary state and other organizations, engineering services) Developed banking sector - Local Banks have operating agreements with International banks - Accounts in Foreign currency - Local currency fully convertible - Computer banking is available Global support: EBRD, ADB, World bank, others. Stable business conditions

4. Modern textile mills of Kazakhstan Joint Stock Company «UTEKS» is a textile factory processing 6 thousand tons of cotton fiber annually. Product range: Combed cotton yarn. Joint Stock Company «MELANGE» : textile plant producing 5 thousand tons of yarn annually. Product range: Ready cotton fabrics, terry towel materials, home textile. «Kazakh Russian Textile Alliance» LLP : joint venture with Russian holding processing 7,8 thousand tons of cotton fiber annually. Production capacity is 45 million m 2 of fabrics. Product range: Gray cotton yarn and terry towel fabrics. «Nimex Textile» LLP – textile factory processing 12 thousand tons of cotton annually. Product range: blended cotton yarn and fabrics.

5. Resource base Availability of local cotton Proximity to regional cotton producers Low energy costs Availability of water supplies Low labour cost State Institutes of Higher Education preparing specialists of textile industry

6. Resource base Technical characteristics of Kazakhstan cotton TypeStaple length, inch Strength for I and II grades, gf/tex Micronaire 41.1/83623,0 – 27,84,0 – 4,5 5 1.3/323523,0 – 27,84,0 – 4,5 1.1/163423,0 – 27,84,0 – 4,5

7. South Kazakhstan - a strategic location in Central Asia - easy access to regional raw material - availability of auto and train networks - international airports - reputable national carrier Established logistics - Russia, Turkey, ЕU and USA Logistics

8. Logistics Rail ways Delivery term to Baltic ports – 2 weeks Average cost - 65$/ton

9. Shymkent – Astana - 2h 40min (1450km) Shymkent – Almaty – 1h 40min (730km) Shymkent – Tashkent – 1h 30min (120km) Astana – Moscow – 3h 35min (2272km) Almaty – Moscow – 4h 35min (3104km) Shymkent – Moscow – 4h (2734km) Astana – Frankfurt – 5h 55min (4298km) Almaty – Frankfurt – 6h 55min (5085km) Tashkent – Frankfurt – 6h 35min (4688km) Logistics International airways Airways Highways Tashkent – Rome – 6h 50 min (4652km) Almaty – Amsterdam – 7h 25min (5252km) Astana – Istanbul - 6h 10 min (3422km) Almaty – Istanbul – 6h 10min (3924km) Tashkent – Istanbul – 5h 15 min (3364km) Almaty – Beijing – 4h 40min (3272km) Tashkent – Beijing – 5h 25min (3933km)_ Almaty – Seoul – 5h 30min (4208km) Tashkent – Seoul – 6h 25min (4871km)

10. Cotton-Textile cluster Cotton- fiber Yarn production Fabric production Fabric finishing and dyeing Made up goods Raw- cotton

11. Cotton-Textile cluster The law of RK “On Cotton Industry Development” Cotton research institute Highest quality seeds production plant Cotton quality rating laboratories equipped by the system of HVI systems Ginning plants Transportation-logistic centers, warehouses, terminals for cotton and textile products logistics Development of new areas under crop for cotton growing State Institutes of Higher Education preparing specialists of textile industry “Ontustyk” Special Economic Zone

12. Special Economic Zone “Ontustyk” 200 Hectares near Shymkent (South Kazakhstan) reserved for textiles Advantageous tax laws Free Customs Zone Infrastructure, engineering services State support

13. “Ontustyk” SEZ Preferential conditions for 25 years Corporate Income Tax VAT Property Tax Land Tax 0% Customs Duties Exemption Administrative support Managerial Board SEZ Tax Authority SEZ Customs Authority Infrastructure Budget Taxation and Customs Support Infrastructure 30% 13%13% 1%1% from 18,8 $/hectare up to 25% SEZ territory Republic of Kazakhstan territory

14. “Ontustyk” SEZ Main manufactures MAIN MANUFACTURE TYPES Denim jeans production Terry towel production Knitted products plant Work wear, military & other fabrics Bed sheets and home textiles

15. “Ontustyk” SEZ Additional manufactures ADDITIONAL MANUFACTURES Production of textile products on the basis of a cotton-fibre with addition of synthetic fibres, wool, flax and other textile raw material Production of silk fabrics and products on its basis Production of carpets, carpet products and tapestries Production of cotton cellulose and its derivatives Production of leather goods Non-woven fabric production

16. “Ontustyk” SEZ engineering services layout

17. “Ontustyk” SEZ Infrastructure objects Gas utilities Gas pipe line of high pressure 6-12 кg/cm2, capacity is 10,3 million m3/month Telecommunication lines Optic fiber telecommunication lines and automatic telephone station for 250 phone numbers

18. “Ontustyk” SEZ Infrastructure objects Automobile road and bridge over Badam river Length is 2 km, dual highway

19. “Ontustyk” SEZ Infrastructure objects Two railways Two railways with dead-ends tracks from Tekesu station, length is 4 km.

20. “Ontustyk” SEZ Infrastructure objects Electric power substation Electric power substation 220/10 Kw with high voltage line 220 kW, capacity is 90 Mwt/hour

21. “Ontustyk” SEZ Infrastructure objects Water supply and sewerage system Two lines of waterways, diameter - 500 mm, water supply capacity is 1,5 mln m3/month, sewerage system capacity is 1,05 mln m3/month.

22. “Ontustyk” SEZ Infrastructure objects Inside automobile roads Inside engineering networks and communications Inside lines of waterways, inside electric power supply is provided by electric power substation 220/10 Kw on the territory of SEZ “Ontustyk”, the length is 5 km), telephony (automatic telephone system for 250 phone numbers, the length is 2 km), gas utilities (diameter of gas pipe is 200 mm, total length is 5 km)

23. “Ontustyk” SEZ Infrastructure objects Additional facilities for customs post Automobile customs post, railway customs post, scale platform, customs examination platform, shed

24. “Ontustyk” SEZ Service Facilities Business center Integrated service and technological center Temporary storages and terminals that supply the logistics of the cargo Certification centers Bank departments Service companies (repair and maintenance of textile equipment, spare parts delivery, training centers) Service companies (delivery of dyes, chemicals, accessories, etc.) Energy suppliers Aid posts Fire station

25. Requirements for the investors Manufacture of cotton products using not less than 30% of local raw material Vertically organized companies High quality products Modern technology – new machinery – machinery with operation life not less than 10 years Strong Market plan (established market, use of brand) Investments in technical know-how and constant training of the staff

26. Comparative analysis Industrial costs

27. «Ontustyk» SEZ - prospects Prolongation of “Ontustyk” SEZ period till 2030 Extension of “Ontustyk” SEZ area up to 1000 hectares Inclusion of additional types of activity in SEZ territory

28. Thank you for attention! Welcome to Special Economic Zone «Ontustyk»! State Authority «Ontustyk» Special Economic Zone Directorate 160802, Republic of Kazakhstan, South Kazakhstan oblast, Sairam region, Lenger highway, 7km. Tel./fax: +7 (7252) 922-002 www.textilezone.kz E-mail: info@textilezone.kzinfo@textilezone.kz