BAKU, Azerbaijan, Apr. 28
By Nargiz Sadikhova - Trend:
Five wholesale distribution centers will be established in Kazakhstan within the framework of creating a network of wholesale distribution centers, Kazakhstan’s Minister of Trade and Integration Bakhyt Sultanov said, Trend reports with reference to the press office of Kazakhstan’s prime minister.
Sultanov said that in order to ensure food security of the country, needs of the population must be provided with high-quality agricultural and food industry goods, prices for food and essential goods must be stabilized, productivity of domestic producers must be increased, efficient logistics of agricultural products must be developed and export channels of their implementation must be expanded.
“We must understand that the cost of storage and logistics of Kazakh goods should not become a ‘burden’ when they are delivered to both local and foreign markets, but should become our competitive advantage,” Sultanov said.
The current state of food security is characterized, firstly, by the lack of quality infrastructure for long-term storage. Also, the lack of coordination of the objects of the trade and logistics infrastructure among themselves complicates how consumers receive goods. Another problem is the old formats of the trade infrastructure, that do not allow efficiently distributing products and stabilizing prices for the long term.
Sultanov noted that demand on the domestic market will be covered by locally manufactured food products. However, the existing infrastructure, imperfect logistics, and the lack of interaction between the participants in goods movement leads to a significant increase in prices.
He said that deficit of vegetable storages in the country is about 70 percent, and in some regions this figure reaches 90 percent, which leads to large losses of products and the inability to store them for a long period.
Sultanov noted that modern unloading, which allows to quickly load goods and the lack of temperature warehouses, have a direct impact on the price.
“For an urgent systematic solution to the existing problems creation of a national distribution network consisting of a single complex of wholesale distribution centers was proposed. This will create a separate economic cluster, which will bring the producer closer to the consumer, and will also ‘merge’ into the trade infrastructure of the country, forming a single mechanism,” Sultanov said.
The core of the system will be the wholesale distribution centers, classified by the functionality of trade and distribution.
Wholesale distribution centers will offer specialized services ranging from storage and processing to distribution and marketing of products. This infrastructure will make it possible to build efficient transport and logistics channels for key areas of product supply. There will also be export-import operations with other countries, which will expand the sales markets.
Sultanov explained that the network of wholesale distribution centers will become a link between the main participants in the commodity distribution system and will unite manufacturers, retailers, and suppliers into one cluster.
“Based on the model of the distribution system and consultations with world and regional experts, we have identified clear parameters and characteristics of each link of the proposed distribution network. Wholesale distribution centers are elements of a single system, and therefore their distribution by type and function is the most effective one,” Sultanov said.
Trade-oriented centers will be located 20 km away from cities with a large sales market, advantageous geographical location. Their function will be to bring farmers closer to the markets. Distribution-oriented centers are located within the city. The presence of a customs terminal on their territory will speed up the process of cargo clearance.
“We plan to build a network of wholesale distribution centers in all regions of the country, which will cover the distribution chain from producer to store. The creation of a distribution system is proposed to be implemented in three stages. At the first stage, five wholesale distribution centers focused on the storage of agricultural goods are to be built in Pavlodar, Almaty and Turkistan regions,” Sultanov said.
The total cost of the project is to be 237.5 billion tenge ($500.4 million). Local design and construction companies will be involved in the construction of facilities.
“In general, we have developed and offered mechanisms for the full commissioning of capacities in the total volume of 4.8 million tons per year by 2022. This will completely cover the shortage of capacities and create conditions for subsequent export expansion. With local akimats (administrative centers), we worked out the issues of allocating land to implement first two stages of the project,” added Sultanov.
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