Is It Worth Investing 6 Billion Tenge in Building a Dairy Farm in Kazakhstan?

Profitability of the Dairy Business: Then and Now

Sansyzbay Umirbekov highlighted that over the past 18 years, dairy farms in Kazakhstan have undergone significant development. In the past, these farms were inefficient and were more of a social project than a profitable enterprise. However, today, milk production has become a highly profitable business, providing stable income due to daily revenues.

Entry Cost into the Dairy Business

According to Sansyzbay Umirbekov, building a dairy farm with 1,000 milking cows today requires substantial investment, approximately 6 billion tenge. This amount includes the costs of construction, equipment, and livestock acquisition. Additionally, successful business operations require further investment in feed production and the installation of irrigation systems.

Economies of Scale

Sansyzbay Umirbekov believes that the most profitable farm size is a project with 1,000-1,200 cows. Such farms allow for reduced milk production costs due to more efficient use of resources and equipment. The trend toward larger farms is already observed in neighboring countries, enabling them to remain competitive in the international market.

Challenges of Sales and Competition

Despite the shortage of natural milk in Kazakhstan, the issue of sales remains relevant. In recent years, a significant amount of imported skimmed milk powder has entered the Kazakh market, putting pressure on prices and reducing demand for natural milk. Under such conditions, farms need to focus on reducing costs and improving product quality.

Processing Prospects

Sansyzbay Umirbekov noted that for many farmers, milk processing could become an additional source of income. However, entering the processing market requires significant effort and investment. Currently, it is more practical to supply existing dairy plants with high-quality natural raw materials.