Kintal Islamov: Dairy Products Are the Health of the Nation, and Therefore a Strategic Industry

How do you assess the current situation in Kazakhstan’s dairy market? What key trends do you see?
Kazakhstan’s dairy market is currently in a transitional state. On the one hand, more and more people want to buy high-quality domestic products. On the other hand, we still remain heavily dependent on imports.

The main problem is the contradictory figures in official statistics. We see discrepancies between the data: the Ministry of Agriculture reports one share of processing, industry unions cite other figures, and the Bureau of National Statistics presents yet another picture. For investors, this creates uncertainty. But for an expert, the problem is obvious: the country consumes significantly less milk than is required by international standards.

How can this consumption be increased?
First, by increasing our own production. Today we remain dependent on imports, and even they do not fully cover the shortage. Second, by changing the culture of consumption. Additional factors include low household incomes, which only confirms the need for systemic industry development.

In Soviet times, the assortment of dairy products was limited: milk, kefir, a little butter and cheese. This habit persists to this day. In Europe and Turkey, for example, the culture of consumption developed through a wide variety of cheeses, yogurts, and other dairy products. Here, the culture is only beginning to form.

As household incomes grow, we expect Kazakhstani consumers to buy a greater variety of products: cheeses, yogurts, cottage cheese products. This will change the structure of demand and stimulate production.

What key trends in the industry would you highlight?
The first trend is the growth of household incomes. This directly affects eating habits: people travel more, try new products, and bring those habits back home.

The second is growing global demand. According to FAO forecasts, by 2033 dairy consumption will increase by 1.6%. Europe is not increasing its cattle population due to environmental restrictions, while Kazakhstan has vast agricultural lands and opportunities for expansion.

Overall, all the prerequisites for industry development in Kazakhstan exist, and we view the prospects positively.

And what challenges does the industry face? Especially in terms of competition with imports and production costs?
We highlight four key challenges:

• Shortage of raw materials — dairy processing plants are underloaded.

• Rising costs — feed, fuel, fertilizers, energy, logistics, and labor costs are all going up. The cost price of a liter of milk in Kazakhstan is higher than that of competitors in the EAEU.

• Import competition — dairy products fr om neighboring countries enter at lower prices.

• Limited financing — long-term projects require capital.

But most importantly: competing with imports is only possible through the creation of high-tech industrial farms. It is crucial that such projects be implemented with all technological requirements. The production technology used in Soviet times is no longer suitable. Modern production requires a high level of industrialization.

How realistic is it today to build modern farms in Kazakhstan?
The market is divided into several levels:

• Modern farms built with new technologies show good stability. But unfortunately, they account for no more than 40% of the country’s farms.

• Farms using old technologies fail to provide proper productivity and do not meet modern standards of housing.

• Household farms (LPH) still produce a significant share of milk, but this is manual labor, low productivity, and unsanitary conditions. According to EAEU requirements, milk from household farms cannot be considered quality raw material for processing. Therefore, this segment should gradually leave the market.

We studied the experience of different countries and concluded that large high-tech farms are more efficient. For example, building a cowshed for 1,200 head is cheaper per stall than for 600. We are now planning to build a farm for more than 3,500 dairy cows.

This requires serious investment. Yes, the state pays great attention to livestock farming. Loans are provided at low interest rates, subsidies are given for purchasing breeding animals, feed, machinery, and compensation for construction and equipment.

But it is important that these programs are long-term. And even more important — that the state concentrates resources on high-tech farms. It is large industrial projects that will provide the country with milk at low cost and guarantee returns on investment. A state program should be designed not for years, but for decades.

The state indeed subsidizes construction, but with limitations: the subsidy rate is 25% of construction costs, but there is a cap — no more than 2.9 million tenge per stall.

As a result, state policy encourages the construction of less technological and less environmentally friendly farms, because capital costs are lower for them. But such projects do not provide the country with quality, affordable milk. For industrial complexes, wh ere capital costs reach $8,000–10,000 per stall, support is clearly insufficient.

So the industry needs investment and a modern approach?
Absolutely. We must move away fr om outdated technologies toward industrial production. The main thing is not to waste resources on household farms. Yes, they produce milk for sale, but this production does not meet sanitary standards and cannot be the basis of the industry.

The state must focus on supporting industrial farms capable of producing large volumes of milk at low cost. Only the effect of scale can change the market and create a competitive industry.

Building large-scale dairy farms will allow savings of 20–30% on capital costs per stall.

What format of state support would you consider optimal?
State support is a key factor. The whole world has moved to a new technological level — therefore, we must transition from small-scale to large-scale production. This will reduce capital costs and lower production costs. I repeat my favorite phrase: “Do not fear large expenses, fear small incomes.” Small investments bring small returns — sometimes even losses, if the technology is incomplete.

For industrial projects, a different policy is needed: low-cost long-term loans, targeted subsidies for the construction of high-tech complexes, guarantees for the sale of produced products, and joint planning of large-scale projects (farm + processing + distribution).

It is better for the state to rely on large enterprises and holdings capable of building both farms and processing facilities simultaneously, rather than distributing resources evenly among small farms. Ideally, a comprehensive development plan for the dairy industry should be drawn up and followed, systematically creating safety nets in all areas.

You currently operate a farm with 1,400 head. What are your development plans?
Yes, we have built our first dairy farm for 1,400 dairy cows, which today produces more than 30 tons of milk per day. We plan to begin construction of a second farm for 3,500–3,700 cows, which will produce more than 100 tons of milk per day. For perspective: the largest producer in the country produces about 200 tons per day — so one of our new farms will produce half of that volume.

When do you plan to launch the new farm?
Design work for the new farm is already underway. We plan to begin construction in the spring of 2026. Implementation will take one and a half to two years — therefore, we expect to commission the new complex no earlier than autumn 2027.

How much do you fear the risk of overproduction, and wh ere will the milk go if you reach large volumes?
We understand the risks of overproduction. That is why our strategy is not just to increase yields, but to simultaneously develop processing and exports. We plan to diversify our product line: fr om cheese and butter to milk powder.

What technical solutions and equipment do you plan to use? Wh ere will the technologies come from?
In our projects, we plan to use high-tech solutions and top-quality equipment. But the key issue is not the “hardware,” but the technology. Many can sell equipment today, but only a few can provide the full technology of milk production — fr om animal feeding to herd management and creating the right microclimate. Milk production technology includes complex biological processes. For us, comprehensive solutions are crucial — ensuring animal comfort, proper diet, and optimal climate.

We have visited large-scale dairy farms in America and plan to implement their experience here in Kazakhstan.

How much do you plan to implement robotics and digital solutions?
We plan to introduce automation in all key processes: from milking and feeding to monitoring animal health. Automatic systems take over routine work and reduce human error, while specialists can focus on management and improving technology. Digital solutions and artificial intelligence help analyze data, predict diseases, and adjust diets — but final decisions are made by people. For us, a modern farm is a smart complex wh ere technologies work for efficiency and animal welfare.

How do you address the staffing issue? In rural areas, people are often reluctant to work, and wages must be competitive.
Staffing is a serious challenge. There are few specialists in villages, and many move to cities. Retaining people is only possible through decent wages and housing. Infrastructure, transport, and services are the responsibility of the state. In Soviet times, there was a slogan: “Erase the line between city and countryside.” Today, the state must implement this principle so that life in rural areas is no worse than in cities.

Why did you decide to develop in the dairy sector at all?
To be honest, at first it was more of a sporting interest: we planned a farm for 600 cows but ended up building for 1,400. As we studied the field more deeply, we realized that dairy farming is not only a challenge but also a serious business with prospects. Today, Kazakhstan has the lowest per capita milk consumption in the region, and we want to change that. Our goal is to create a high-tech farm with high productivity and low cost so that quality milk is accessible to everyone.

Is participation in industry events such as AqAltyn important for your company? What goals do you set when taking part in the congress?
First of all, it’s about exchanging experience. You can see how colleagues work, discuss their successes and mistakes. Many complain about problems, but this is useful too: others’ mistakes help avoid your own.

Second, it’s about understanding the market and technologies. In crop farming we know everything, but in dairy we are still newcomers. That is why such platforms are very important for learning and networking.

Kintal Islamov will speak at AqAltyn 2025 — the annual congress that brings together key players of the dairy industry in Kazakhstan and Central Asia. The event will take place on November 24–25 in Shymkent, Kazakhstan. Registration is available via the link.

General Partner and Key Engineering Partner of AqAltyn — Borte Engineering

As a leading national producer in Kazakhstan, Borte Engineering develops high-tech equipment for the food industry, with its quality confirmed by inclusion in the Register of Domestic Producers. The company successfully cooperates with enterprises across Central Asia, strengthening the regional economy.

Innovation Partner — delaval.com/en-us/">DeLaval

Qola Sponsors — tetrapak.com/">Tetra Pak, Clever Machines LLP

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Partners — Dairy Union of Kazakhstan, Republican Chamber of Dairy and Combined Cattle Breeds