Secretary Penn: Good morning, ladies and gentlemen. I'm really glad to be with you this morning. My name is J.B. Penn. I'm the Under Secretary for Farm and Foreign Agricultural Services at the United States Department of Agriculture in Washington. It is my extreme pleasure to be able to open today's Trade and Investment Mission.

To all of our hosts I want to say thank you for the very warm welcome that you have extended to the U.S. Agribusiness Trade and Investment Mission, and to all of the American businesses I want to say thank you for traveling with us on this mission to visit Kazakhstan. We are indeed looking forward to a very productive time in the country.

I want to first acknowledge the very distinguished guests we have at the podium. Minister Yesimov, Secretary Johanns, Ambassador Saudabayev, and Ambassador Ordway.

I am told that I should remind everyone to switch off their cell phones, that everybody has a habit of carrying two or three cell phones, so instead of having everybody's phone going off, if you would please just switch them off, and we'll move ahead with the program.

This is indeed an auspicious occasion for us. We are very pleased to be able to connect American businesses with Kazakh businesses in the field of food and agriculture. We think that this is the beginning of what could be a very fruitful relationship to the great advantage of the business communities in both countries.

I want to note that Secretary Johanns and I arrived just this morning, in fact an hour and a half ago. We came from Geneva, Switzerland, where we had been involved in the WTO Doha Development Agenda negotiations, something that is very much in the news today involving trade and investment just as we are pursuing here today.

It is now my great honor to introduce our host for this trip to Kazakhstan. I am very pleased to introduce his Excellency, Minister of Agriculture Yesimov. Mr. Yesimov was appointed Minister in January of this year. He had previously served as Minister from 2001, 2002. He's been involved in Kazakhstan agriculture for many years. So to kick off our program this morning, please join me in giving a very warm welcome to Minister Yesimov.

Minister Yesimov: Distinguished Minister, distinguished Secretary, business colleagues, representatives of the businesses, ladies and gentlemen, please let me welcome the high-level delegation from the United States of America headed by Secretary Johanns on the soil of Kazakhstan and wish your guests a warm and useful stay here in Kazakhstan.

The whole world is aware of the economic power of the United States, of your technological and technical achievements, including agriculture. Your agro-industrial complex as of now is one of the most highly organized, technologically developed, with a huge export potential, so our collaboration with you is a great honor for us.

Since many of you have come here for the first time, let me give you a country profile and tell a little bit about the agricultural complex.

We're ranked ninth in the world in terms of size. Our territory is over 2.7 million square kilometers. In terms of natural resources reserves, we're ranked among the richest countries of the world naturally. We have good grounds for that. We have impressive reserves of coal, oil, ferrous, non-ferrous metals, rare earthen metals. Along with mineral resources, there are a lot of opportunities for wide-scale development of renewable national resources. We have vast expanses of land; availability of all kinds of climatic zones makes Kazakhstan a unique country to promote tourism, hunting, fishing, as well as the agro-industrial business.

Speaking of the status of the development of the agro-industrial complex of the country, it can be characterized as a sector that is developing in a stable manner, which provides for the full security of the country and meets all the demands of the internal market in terms of food and raw materials.

The proportion of agriculture in the GDP of the country is about 6 percent. The annual growth rates of agricultural production are 6 to 7 percent. The sector has a great deal of potential to further increase its production. There is availability of huge markets, which keep growing; total farmland area is 93 million hectares with more than 23 million considered to be arable land. We would like to note that we have a lot of arable land that can help us increase the farmland 1.2-fold.

The climatic conditions of the north and northeast and a major part of the western and central parts of the country are favorable to growing grains, including wheat. It will grow hard and strong types of wheat with good characteristics that has high demand in global markets. The consumers of our wheat are countries from Asia, Africa, and Europe. Annually, we produce about 15 to 16 million tons of grain, of which four or five million are exported. We are among the top seven or eight exporters of grain. In terms of exports of flour we rank 30^th in the world.

At the same time, the extant land, labor, and material resources make it possible to double grain production in the near future and triple the export volume. This is an area that is the most promising in terms of investments. According to the most modest calculations, the volume of the neighboring markets is estimated at 15 million tons annually. The eastern part of the country is good for oil, plants, corn, fruits and vegetables. In the south we traditionally grow cotton and rice. All the cotton as well as the bulk of rice is exported.

Another attractive area is cattle breeding, the so-called pasture cattle breeding. Thanks to natural pastures, we can produce competitive and environmentally friendly products. We have 5.5 million head count of cattle, more than 14 million sheep, more than 26 million poultry. In terms of per capita indicators, we're among the leading countries of the world. We can double the head count of cattle. As for the volume of the market, it is considerable within the country, and we have good prospects as compared to neighboring countries.

Another important area is fisheries. Our water reservoirs are raising such types of fish as sturgeon, [sevroga], et cetera. We produce a lot of Caspian black oil in order to attract investments to this sector as well as to improve the reproduction of fisheries; we intend to organize fish hatcheries and provide them with water reservoirs operational licenses for 10 to 15 years. This sector has a lot of prospects for business development. We have unlimited opportunities in the areas of development of ponds and the development of artificial and man-made ponds.

Another promising area is the processing of agricultural products. Currently, this area is free and a vacant niche for business development.

As you know, the success of any business, including foreign business, depends on the political stability of the country, on the predictability of the actions of the state, sound regulatory framework, and support to entrepreneurial initiative. In that sense, a lot has been done in Kazakhstan, and all the government's policy in the area of support of FTIs is geared towards this objective. Foreign investors active in various sectors of the country can see it with their own eyes, and our country, among the [safest] countries in Eastern Europe, is a very attractive country. In terms of FTIs, we're in the top group of countries. The regulatory framework of the agrarian sector meets the requirements of the market economy, international practices, and is geared towards protecting and supporting the entrepreneurial initiative of the manufacturers.

On the land code, farmland is used on a long term lease basis, or foreigners have the so-called temporary land use right. They can lease it for up to 10 years. Upon the expiration of the initial timeframe, this tenure can be extended. Under the water and forest code as well as the law on the reproduction of the use of the animals, the water reservoirs, forest areas, and hunting areas are provided to users on a competitive basis for long-term use. Private forest [farm] can also be organized.

This provides the stability for agro-business as well as confident operation for agricultural producers. The state provides support to the ago-industrial complex. Naturally, we rely on our potential. We cannot compare ourselves with your country or with other Western countries. At any rate, we have a holistic system of centralized government. Support is geared towards supporting entrepreneurial initiatives, creating favorable conditions for accelerated growth for priority areas of the agro-industrial complex. To be more specific, speaking about the government support measures, you'll get more information from our director of the department during the business forum.

Today, our country is working towards acceding to WTO. We are engaged in negotiations. The [inaudible] obligates us to take urgent measures to increase the competitiveness of the agrarian sector of the economy, so we need to harmonize our activities with international requirements to make our products compliant with international standards. I think our cooperation with you, the most advanced country in the world, can be of great benefit.

I would also like to draw attention to the fact that the agro-industrial complex of the country has a lot of potential. I think that through joint considered efforts with your country, with your companies, I already told you about our potential. We have a lot of potential in animal husbandry, in cattle breeding. We have a lot of land resources in order to produce more crops, fruits and vegetables. I think through considered efforts, we could increase our production several fold and utilize the neighboring markets, given the rapid growth rates of the neighboring countries, and that we'll be able to sell our products.

The President of the country set a very ambitious goal, to be in the top 50 most competitive countries of the world. The current growth rates of our economy as well as the existing potential testify to the fact that this objective is quite realistic, and we are working towards this goal.

In closing my remarks, I would like to express the hope that your visit, Mr. Secretary, that your meetings with the business community of the country will serve as an additional impetus to promote bilateral cooperation for the benefit of our peoples.

Thank you for your attention.

[Applause].

Secretary Penn: Thank you, Mr. Minister, for that very informative presentation.

I now have the distinct honor of introducing U.S. Secretary of Agriculture Mike Johanns. It's always with a great deal of trepidation that one goes into introducing one's boss. You never want to say the wrong thing.

I have had the distinct pleasure of working with Secretary Johanns now for one and one-half years, since he came to the Department of Agriculture in January of 2005. During that time, Secretary Johanns has been very influential in the agricultural sector and in agricultural policy. He has an agricultural background and was the governor of one of our most important agricultural states. Secretary Johanns understands the agricultural sector, and he's demonstrated his dedication to its prosperity. He has shown determination to move fundamental trade reform forward and has been a dynamic force in shaping the future of world farm policy.

As I indicated, we just came from Geneva, where he has been very much involved in the negotiations, including one 14-hour marathon session, and I can tell you that over the past two days he has had very little sleep.

This is Secretary Johanns's second visit to Kazakhstan this year. In February, he led the U.S. delegation at the inauguration of President Nazarbayev to demonstrate the United States' commitment to strengthen the long-term strategic partnership and cooperation between our nations and a shared vision of a prosperous and sovereign Kazakhstan in the 21^st century.

Secretary Johanns's presence here today further illustrates his personal commitment to developing commercial linkages and to more open trade. History has clearly shown that open economies and free markets can provide the pathway to prosperity for all countries.

Ladies and gentlemen, please join me in welcoming Secretary of Agriculture Mike Johanns.

[Applause].

Secretary Johanns: Thank you, JB. That was very very good.

It is great to be back in Kazakhstan, and good morning to everyone that is here.

JB in his introduction mentioned President Nazarbayev. I was here for his inaugural just a few months ago, and I had an opportunity to sit down with him. I have to tell you, he is a very very persuasive individual. When we sat down together, he said, Mr. Secretary, I would love it if you would put together a trade mission to our country. I said, Mr. President, we will do that. So I am here today to fulfill a promise that I made to the President. I'm very very honored and happy to do that.

I'm also very pleased to be back in the new capital of Astana on the U.S. Agribusiness Trade and Investment Mission. I do want to thank the Agriculture Minister, Minister Yesimov. I thought your comments were excellent. In fact, I thought they were so good I think they deserve a second round of applause.

[Applause].

I also want to acknowledge my friend, the Ambassador from Kazakhstan to the United States, Ambassador Saudabayev. It is good to see you. When I was here in February, it was quite cold, it was winter here, so the Ambassador promised me that if I came back to Kazakhstan, he would take care of the weather and deliver a very beautiful sun-shiny day. Mr. Ambassador, you've done an excellent job.

Let me also knowledge our Ambassador from the United States to Kazakhstan, Ambassador Ordway. We had an opportunity to meet when I was here, and the Ambassador does such a great job for us, and we appreciate his work.

Let me also acknowledge our Agriculture Consul Jim Higginston, our USDA staff from Turkey and Russia, and the U.S. Embassy staff in Kazakhstan. In a mission of this size, a lot of planning and work goes into it. It would be literally impossible for me to name every person that's been involved because it would be a very long list, but I want the word to spread from my comments today that I sincerely appreciate their great efforts, and they have paid off. This is going to be an outstanding mission.

This new capital city, ladies and gentlemen, has a lot in common with its country. You are building a new future for the Kazakhstani people literally brick by brick. These building blocks, however, are economic in nature. They feature a market economy, they feature effective fiscal and monetary policy, they feature accession to the World Trade Organization, universal tax laws, and a very strong banking system. For each of those items we congratulate Kazakhstan.

Kazakhstan has a great amount to be very very proud of. You have a bumper crop of "firsts" for countries in Central Asia. You have the largest economy in Central Asia with double-digit growth in 2000, 2001 and over 9 percent annual growth from 2002 to 2005. By anybody's definition, very impressive.

But the firsts don't stop there. You're the largest grain producer and exporter in Central Asia. You have the best banking system in the region. You have the largest amount of foreign direct investment of any country in Central Asia.

I'm here to tell you today that the United States admires this nation's accomplishments. We are proud to have Kazakhstan as a friend. Kazakhstan has made significant progress in economic reforms in the past 15 years of independence. In 15 short years, Kazakhstan has come a long way.

You have moved from a centrally planned economy to a more transparent, a less regulated, a more market driven business environment. An environment that literally says our door is open for business. You have successfully implemented a number of structural reforms, which include a pension system, public sector resource management, energy, comprehensive taxation system, and banking. I would also add that your oil profits have been managed prudently with part of the revenue saved in a national fund. And you have a policy to diversify your economy. That's why we're here, to try to help [move] way from the over-dependence on the oil sector by developing light industry and service and agricultural sectors. We believe we can be a good partner in this effort.

Kazakhstan also is working to improve its legal and its regulatory frameworks and standards with a view toward joining the World Trade Organization in the near future. Let me be very clear about this point. We, the United States, strongly support your WTO membership and feel this will bring significant benefit to Kazakhstan's farmers and agricultural industry.

All WTO members, including the United States, have had to make reforms to their agricultural sectors in order to comply with WTO rules. It's part of the world trade regimen. We are encouraged that Kazakhstan has requested technical assistance from the WTO Secretariat to help make these reforms. We regard this as a positive step in the adoption of WTO agreements, including the sanitary and the phyto-sanitary aspects.

I'm also here today to tell you that the United States has tremendous confidence in Kazakhstan's future. With its abundant resources and even greater supply of human capital, Kazakhstan is becoming a successful, independent, sovereign, and a prosperous nation. With such credentials we look to Kazakhstan as a leader in the Central Asian region. That bears repeating. With such credentials we look at Kazakhstan as a leader in the Central Asian region. Your country can promote regional integration processes that will no doubt benefit your neighbors. Kazakhstan has a vital role to play in ensuring prosperity across Central Asia.

The keys to progress are literally in your hands, with continuing democratic and economic reforms, the rule of law, anti-corruption measures, accountability of institutions, and very sound security policies. I think our presence here today displays that American companies stand ready to engage in serious discussions to establish business partnerships. We regard you as a strategic partner, and that's why we are here today to strengthen our bonds and create a better collaborative environment for trade and investment between our two nations.

Let me assure you that the members of our delegation are first class in every way.

Trade and Investment Missions are different from the normal trade missions that the USDA sponsors. They are unique because they are organized as two-way trade missions. This means that while we have company representatives with us who are certainly eager to sell their products and services in Kazakhstan, we also have representatives with us who are excited about purchasing products from Kazakhstan and the potential for investment here. So Trade and Investment Missions provide an excellent opportunity for two-way commerce.

We at the USDA understand something about trade. We understand that trade is a two-way street. That is why I'll be making a special effort to understand the challenges and the obstacles that Kazakhstani businesses face in exporting their products into the United States. I want to personally understand the difficulties that agribusiness has in accessing our market. You see, I believe very very strongly that we cannot expect countries to provide greater access to our products unless we are also responsive to the challenges that others face getting their products into our country, the United States.

We look forward to working with Kazakhstan to ensure that agreements and obligations under the WTO can be met, to include the rules-based approach to food safety required under the WTO SPS agreement.

At USDA, we are increasing our emphasis on trade capacity building activities. That's really occurring on a worldwide basis, especially in relation to our regulatory requirements. This can make a difference in the ability of other countries to export their new products into the United States market. Our Cochran Fellowship Program provides short-term training in the United States to help countries develop market driven food systems and increase the trade links with U.S. agribusiness.

I'm very very pleased to note that since 1993, the program has sponsored 223 Kazakhstanis for training in areas such as biotechnology, agribusiness marketing, management, livestock genetics, animal health, and veterinary services. Seven additional fellows will likely be sponsored this year. Since 1995, 16 agricultural university instructors from Kazakhstan have been participating in the Agricultural Economics Faculty Exchange Program. This program, which we're very proud of, brings university professors to the United States for five months to help them strengthen their skills in agricultural economics, marketing, agribusiness management, and agrarian law.

Kazakhstan is a vital commercial market for U.S. agricultural products, and we thank you for that, and has benefited from U.S. export credit guarantees since the 1990s. For fiscal year 06, USDA has made available $200 million under the GSM-102 program for this regional area, for this regional program.

The presence of the U.S. companies on this mission reflects their confidence in Kazakhstan. These representatives are here because their companies are encouraged by the changes taking place, by the leadership role that is being provided by Kazakhstan in this region, and the trade and the development opportunities that we see.

Several types of U.S. firms are participating. We have a very very broad mission. Farm equipment, agri-chemical companies, animal genetics, meat, poultry, rice exporters, irrigation, desalinization, consulting and engineering, management, finance companies and processed food supplies of fruits and nuts and MREs. This range of business community interests demonstrates the U.S. sectors interested in Kazakhstan.

The United States is already the largest foreign investor in Kazakhstan. At last count, U.S. foreign investment in the Kazakhstan economy totaled $12 billion. Over 100 U.S. ventures and enterprises at work in Kazakhstan have ratcheted up our partnership and our trade volume.

So, ladies and gentlemen, in closing, I am looking forward to seeing more of your beautiful country than I had an opportunity to see during my last visit and meeting with Kazakhstani business representatives and governmental officials. I know with my friend the Ambassador in charge of the weather, it's going to be a perfect week. Thank you.

[Applause].

Secretary Penn: Thank you, Secretary Johanns.

Next I would like to introduce Ambassador Saudabayev, the Kazakhstan Ambassador to the United States. Ambassador Saudabayev has a long career in government and diplomacy, and he was assigned to the United States in the year 2000. He's a very dynamic individual and represents his country very well in Washington.

Please join me in welcoming the Ambassador.

[Applause].

Ambassador Saudabayev: First of all, I would like to welcome our American guests and especially Secretary Mike Johanns. I have special respect for this person. He is an actual embodiment of what is called the American dream in the world. This is a person born and raised in a farming family, not the richest farming family, and has made his own career and determined his own fate. He was a very successful governor of the largest agricultural state in the United States of America, the state of Iowa. President Bush in his second presidential term offered him the most difficult portfolio in his cabinet: this is the portfolio of the Secretary of Agriculture. Unfortunately, this area is not easy to work in both in the United States and here in Kazakhstan, and this is a special visit for us primarily because it is taking place at the initiative of our President, who Mr. Johanns met during the presidential inauguration on January 7 this year.

I remember how we were meeting the American delegation at 5:00 in the morning, headed by the Secretary here at Astana Airport. I think it was minus 37 degrees plus the typical Astana wind. They came out of the airplane in a light coat and someone said, oh my God, where did we arrive? So it was back then that I promised that we also have summer here, and we're going to have good weather.

I am very thankful to the Secretary that in literally several months he was able to fulfill his promise to the President, and, as you have noticed, assembled a very powerful and a very representative, both in terms of quality and also in terms of the regions represented by this delegation, to assemble this mission of people who want to work together with us.

This sector has another meaning for me because this is the most socially vulnerable sector. The people who are part of this sector, let's put it this way, are not the most affluent people in our country. I would like to say that in the last couple of years, the dynamics of our relationship with the United States have increased significantly, and evidence of that is that in the last several months, starting with the beginning of the presidential campaign here and ending now, we have had visits from Vice President Dick Cheney, Secretary of State Secretary Condoleezza Rice, Energy Secretary Samuel Bodman, and Mr. Johanns is coming to Kazakhstan for the second time this year. I would also like to mention one other person who is sitting here in this audience who represents the White House, represents the department responsible for Eurasia, including Kazakhstan, a big friend of our country, David Merkel. I would like for all of you to welcome him.

[Applause].

I can tell you that strategic partnership, and this is not my words or Secretary Johanns's words, our heads of state characterized our relationship this way, President George Bush, President Nazarbayev, they've defined our relationship as a long-term strategic partnership that is founded on several pillars, for security, fighting terrorism, non-proliferation, economic cooperation, energy, and of course issues related to democracy and building civil society.

Of course, today out of $12 billion in U.S. investments that have been invested in Kazakhstan's economy over the last several years, the vast majority of that investment went to the energy sector, to the oil and gas sectors in accordance with the strategy of our Presidents on diversification of our economy, as Minister Yesimov has mentioned here. Part of the goal is to be one of the top 50 most competitive countries in the world, and so of course it would be very significant if we have strong investment in our agricultural sector as a result of that. Many people that are part of this mission represent the most vibrant and the most important sector of the economy to us. Not just in the economy but also in regular life I see this when I visit here periodically and see how our life is changing. The capital does not define the quality or the conditions of life. As they say in the United States, Washington is not America; so Astana is not Kazakhstan. Agriculture is called the salt of the land sometimes and the people who are engaged in agriculture are feeding us. The fact that in the last several years this area received more attention by our country's top officials and the fact that the Ministry is headed by Akhmedzhan Yesimov, we see the results of his management. This instills a lot of hope that this sector will dynamically move forward, and the fact that our strategic partners, the Americans, have taken part in this process is another reason for this partnership to be successful.

I would like to wish the participants of today's forum for your meeting today to have a favorable continuation that will be manifested in specific deeds, specific projects, to benefit both us and the Americans. This would be another contribution to the strengthening of our long-term partnership strategy, which we hope will receive another powerful impetus at the forthcoming meeting between our Presidents, Messrs. Bush and Nazarbayev. I think that today's visit by the Secretary and the upcoming meeting between him and the President of our country is another preparatory stage before the summit meeting between our heads of state. This is what we do, this is what our jobs are. We work in between the state visits. And together with my colleague, Ambassador Ordway, we are implementing the agreements that were made between our two countries.

I'd like to wish you successful work and for you to meet new people, make new contacts in Kazakhstan, not just in this room but in the field, at the farms, and also we're coming to the United States as well. We have held five of those conferences in the United States over these years, but this is symbolic that this conference is the first one that is done under the auspices of the Agriculture Ministers of the two countries. So let's hope that this meeting is fruitful, and I'd like to wish you a lot of success.

[Applause].

Secretary Penn: Thank you, Mr. Ambassador.

I'd now like to introduce Ambassador Ordway. Ambassador Ordway is one of the most senior diplomats in the United States Foreign Service. He has served in numerous positions since 1975. He has very extensive knowledge of this region of the world, and he was appointed Ambassador to Kazakhstan in 2004. So please join me in welcoming Ambassador Ordway.

[Applause].

Ambassador Ordway: Thank you very much, and thanks for the acknowledgement of my long diplomatic experience. But of course that's not where one starts. Where I started was in a small agricultural community in the United States, the number one agricultural state, which is California. My first paid employment was in the agricultural sector.

Speaking of firsts, the United States was the very first country to recognize independent Kazakhstan, to establish diplomatic relations with Kazakhstan on Christmas Day, 1991, almost 15 years ago. We were the very first country to establish an embassy here in Kazakhstan. So it's a great pleasure to welcome as part of that line of relationships that we've been building over the last 15 years you, Mr. Secretary, back again for I think your second and a half visit to Kazakhstan, and it's really wonderful that you have brought such a great delegation of U.S. agricultural and agro-industrial representatives here.

Kazakhstan is a long way from the United States, and for many Americans, we don't know much about Kazakhstan. But I think for those Americans who have come here, they have had some idea about it. Many of them have been working in Kazakhstan for many years and are desiring to improve their relationships. A few others are new to the market and are taking a look for the first time. And although Kazakhstan is far away, I think the size of the countries, the outlook, the scope, the hospitality, all those things are quite similar, and they're things that make it easy for Americans and Kazakhstanis to do business together.

We do business, I'll get to the business part, but we do business in a lot of other areas, too, some of which have been mentioned. We have been partners since the very beginning in preventing proliferation of weapons of mass destruction. We fight terrorism together. We're working to build security and stability in the Caspian region and in Central Asia. We're working together to fight crime, to stop drug trafficking. We have programs to help prevent the rise of HIV/AIDS, to prevent the spread of tuberculosis. We're working and have worked for many years on Kazakhstan's remarkable program of economic reform. We are deeply engaged in microeconomic reform, improving the business climate for small and medium enterprises. We are, as Ambassador Saudabayev said, deeply engaged in trying to help Kazakhstan fulfill its vision and President Nazabayev's vision of a democratic society with a vibrant civil society.

But most of you here today are interested in business and in trade and investment. Kazakhstan is a very attractive place for that.

Several speakers have mentioned the volume of U.S. investment here, which his growing not only in the oil and gas sector but in other sectors of the economy as well. Our trade is also growing. American exports have risen to $540 million in 2005, which was up 7 percent over the previous year. It includes things obviously like petroleum drilling and oil flow equipment but also railway transportation technology, agricultural machinery, and equipment.

In agriculture specifically, we believe that Kazakhstan is a growing and important market for U.S. exporters. Kazakhstan's utilized U.S. export credit guarantees for more than 10 years, benefiting U.S. exporters, Kazakhstani business partners, and local consumers. As a result, exports of agricultural products from the U.S. to Kazakhstan have grown from $10 million in 1995 to $42 million during the first half of 2006 alone, and if this mission is half successful those figures will only rise dramatically for the rest of this year and for next year as well.

I also might note that the purchase of agricultural equipment from abroad has also risen. In 2005, there were $340 million worth of purchases compared to $134 million in 2003. Now the United States has only got a 10 percent market share, so I encourage the Americans who are here to try to get out there and increase that market share and try to compete well with the other major players, Russia and Germany, who are in this market.

But we see a continuation of this growth trend. We see rising incomes in Kazakhstan, continued growth in the economy, high market prices for farm exports and continued economic expansion, and this all creates room for highly competitive, well motivated businesses.

Part of the success of Kazakhstan, a large part of the success is not just due to the fact that they happen to be sitting on one of the world's larger pools of oil. It has to do with a sincere long-term commitment to economic reform and creating the fundamental aspects of a market economy. That is also one of the reasons why American companies have been so successful in Kazakhstan over the last 15 years and why there continues to be great interest among American investors and businessmen to continue to do business in Kazakhstan.

But I'm not here to paint a totally rosy picture for you. I have to acknowledge, and those American businessmen who come into the market have to realize, that there are significant challenges in doing business in Kazakhstan. It can be quite challenging at times dealing with sometimes changing laws and regulations, capricious enforcement, difficulties in tax, customs, and other areas. But we see those problems as Americans in other countries. We continue to work with our companies here who are I think almost totally, I can say without exception, have been quite successful.

We are about to move our embassy from Almaty to Astana, and we will be moving into our new building in September. But we will retain a very healthy presence in Almaty, which is the business and commercial capital of Kazakhstan. Our U.S. Commercial Service with a full-time senior commercial officer will continue to be in Almaty, and he is always available to assist American businesses with any problems or issues they have, helping you become acquainted with the market and trying to do our best in order to ensure that you can do your best in improving your relationships, identifying investment opportunities, and concluding trade deals.

Again, I'd like to thank Secretary Johanns for coming such a long way, congratulate his team for having done an outstanding job of organizing this delegation and this visit here, thank our hosts, you Mr. Minister, and thank Ambassador Saudabayev, whose energy has gone into helping bring this all about. I wish all of you, both Kazakhstani and American businessmen, great success over the next few days as you seek to develop and improve your relationships. Thank you very much.

[Applause].

Secretary Penn: Thank you, Ambassador Ordway.

I want to now collectively thank all of the speakers who have done an excellent job of highlighting the strategic and economic importance of a strong trade and investment relationship between our two countries. They've set quite a goal for us to strive for this week.

In the United States we've always believed that the strength of our system, our economic system, resides in the powerful synergy of the entrepreneur and a free marketplace. I'm very impressed with the resources and talent that our American businesses bring to the table. They are highly motivated, and they believe that jointly we can meet any challenge, and they firmly believe, as shown by their presence here today, that we can contribute to the prosperity of Kazakhstan and to the United States. They know that, as Ambassador Ordway said, Kazakhstan has made great strides over the past 15 years, and they anticipate helping, look forward to helping in the transition to a fully free market economy that will make the next 15 years even more outstanding.

I'm very pleased now to have the opportunity to introduce to all of you our private industry representatives who have worked with us to help expand trade horizons and who look forward to working with Kazakhstani officials and agribusiness counterparts.

When I recognize your company if we could get the representatives to stand. I'm working here with some unfamiliar names so if I mispronounce your names please bear with me, but I want to make sure that we give due recognition to all of the people that have traveled such a long distance and made such an effort to be with us today.

Let me start alphabetically with ABS Global, Mr. Toder Arboff.

From Agribusiness Management Company, Mr. Toder Arboff again. [Laughter].

Mr. Arboff: Should I –

Secretary Penn: Yes, please.

Mr. Arboff: [Inaudible] is an international company for [inaudible]. We [inaudible] 70 countries worldwide, selling [inaudible].

Secretary Penn: Amity Technology, Mr. Nikolai Riebov.

Mr. Riebov: We work with [inaudible] United States and we are the largest exporter [inaudible] former Soviet Union. [Inaudible]. [Inaudible] as well as [inaudible] the United States [inaudible].

Secretary Penn: Do we have the microphone? Could you come to the microphone, Mr. Arboff and quickly -- Oh, they're going to bring the microphone to you.

Mr. Arboff: I am representing ABS Global. That's the largest [inaudible] company worldwide. We do business in 70 countries and so annually $11 million [inaudible]. The company is based out of Madison, Wisconsin.

Secretary Penn: Thank you.

Now still in alphabetical order. Agribusiness Management Company, Nicklaus Previs.

Mr. Previs: Nick Previs from Agribusiness Management Company. Forgive my casual appearance. My luggage stayed in Frankfurt. With me is Mike Young and Yerlan Sagadiyev.

Agribusiness Management Company is an investment manager for a $100 million private equity fund engaged in the agribusiness sector in the former Soviet Union. We were previously an equity partner with Mr. Sagadiyev in the largest dairy company in Central Asia, Foodmaster. We still own the largest ice cream producer in Central Asia, which is Foodmaster Ice Cream Company. We are also engaged in real estate development activities right now with our partner, Mr. Sagadiyev.

The other part of our business is Kantera Partners, which is engaged primarily in monetization activities with USDA, monetizing agribusiness commodities throughout the world for aid programs.

Secretary Penn: Thank you.

Mr. Riebov again, please. Thank you.

Mr. Riebov: I represent Amity Technology. We are the leader of sugar beet harvesting equipment both in the United States and also in the countries of the former Soviet Union. We are number one in sales to Russia of sugar beet harvesters. We also manufacture toolage equipment that is necessary for sugar beets and equipment for soil analysis, including soil samplers and soil labs. We are based in Fargo, North Dakota in the well known [inaudible] Valley, which is the largest supplier of sugar beets in the United States. Thank you for the opportunity to be here.

Secretary Penn: Thank you.

Now to Case New Holland, CNH. There are three representatives. Mr. Arthur Miles who is the business director; a friend of mine, Mr. Joe Samora; and Steven Natterly. Mr. Miles?

Mr. Miles: Good morning. We are one of the largest manufacturers of farming equipment and industrial [inaudible] equipment. As you said, I am the business director responsible for the CIS and Central Asia, and I'm here together with Joseph Samora, who is the Government Affairs Senior Vice President based in Washington, with Steve Natterly, also from Government Affairs based in Washington; and the representative of our distributor, Mr. Arsen Idiebelkof from IPC Agri.

Later on in the day, we will give a presentation about our activities and our history in Kazakhstan. Thank you.

Secretary Penn: Very good, thank you.

Dow AgriSciences, Andrei Vernigor.

Mr. Vernigor: I represent Dow AgriSciences. We are an agricultural unit of the global leader of the petrochemical leader Dow Industries. Our sales are about $3.5 billion U.S. dollars. We have 5.5 thousand people. We operate in the four main areas of the world -- North America, Latin America and Europe, as well as Asia Pacific. We represent two areas of development, namely agricultural chemicals and special chemicals as well as plant genetics and biotechnologies. Taking agrichemicals, we have a broad range of means of protection against [inaudible]. So we combat regular insects, we have special plant protection chemicals, we also provide protection for grains and insects, for dry grain silos. We also provide biotechnologies based on three platforms. One is seeds and genes, genetic materials; second is manufacture of oils, special types to improve the end quality; and the third area is a new area, namely animal vaccines produced from plant cells.

Our idea of participation in this mission is that despite the 10 years of our presence in Kazakhstan, unfortunately some of our areas are not yet developed in Kazakhstan, so we hope to expand our trade relations in Kazakhstan in these new areas.

Secretary Penn: Very good. Thank you very much.

Food Pro International, Mr. Bill Washburn.

Mr. Washburn: It's always a pleasure to be here. This is my second trip this year, too. I would like to introduce our Vice President of Technical Services, Vulgas Fulda. I feel like we're in the right place at the right time with respect to the food industry. Food Pro International is a consulting engineering service company. We provide technical transfer in the area of food and beverage production and distribution. We have projects we're already working on here.

We've been in business for 30 years. We have our headquarters in San Jose, California and our design section is in Stockton, California. We've completed more than 400 projects in 43 countries and we are looking forward to the rest of this visit. I understand we're going to have a little more time later today to tell about our company, so we're glad to be here once again.

Secretary Penn: Thank you very much.

As Mr. Washburn said, there will be more time later to explain about your company, so this is the time for just a very brief introduction to help us stay on schedule.

Food Source Incorporated, Sayed Hussein.

Mr. Hussein: Thank you. I am Sayed Hussein with Food Source. We are a major supplier of nuts and dried fruits. Our major markets are the Far East, the Middle East, and Eastern Europe. Russia is our biggest market. Later on maybe I can tell more about the company. Thank you.

Secretary Penn: Thank you.

Globex International, Mr. Leonid Kogan.

Mr. Kogan: My name is Leonid Kogan. I am President of Globex International out of New York City, United States. We supply Kazakhstan with poultry and meat for the past 13 years. The introduction will be later, probably.

Secretary Penn: Yes, you'll have more time later, so this is the time for just a brief one.

Intervision Foods, Mr. Jim Wait. Not here?

John Deere, Mr. Ivan Vovschalk.

Mr. Folkt: I am not Ivan Vovschalk, I am Yoven Folkt, and by moving on like this we avoid that you have to pronounce my name. [Laughter]. We are representing John Deer International, which is the company's export branch responsible for some 100 countries. When you see "in country" behind my name, it means Switzerland. We are located in Switzerland, and I have with me Ivan Vovschalk who is the sales manager for several CIS countries, and we have also with us from our distributor Eurasia, Mr. Sahin and some of his staff. Thank you very much.

Secretary Penn: Thank you.

Mitamar Corporation, Mr. Bill Osey.

Mr. Osey: Thank you. First I wish to thank all of you here because it is your presence that will make this trip our success, so I thank all of the attendees for this and thank the Secretary and the Ambassadors for hosting us.

Our company, Mitamar Corporation, is based in Cedar Rapids, Iowa. Our state is three million. If we had 20 million like California we would be even a bigger exporter and producer of agriculture.

Our company exports to about 35 countries. We have been in business since 1975. We are the leading producer of Halal products in North America. We export to Korea, Japan, China, Malaysia, Singapore, Indonesia, North Africa, Morocco, Tunisia, Egypt, and all of the Gulf area. We'll explain more about our services. We provided Halal services to McDonalds, Burger King, Applebees, and International Concepts in addition to equipment. So we thank you and look forward to meeting all of you later.

Secretary Penn: Very good. Thank you.

National Meat Association, Jeremy Russell.

Mr. Russell: I'm Jeremy Russell. I'm representing the National Meat Association, which represents about 500 packers and processors in the United States, including Globex as well as other associated service providers. I also sit on the Board of Directors of the U.S. Meat Export Federation, so I'm here representing them as well. Thank you.

Secretary Penn: Thank you.

Sweetwater International, Mr. Edward Jackson.

Mr. Jackson: Hi. We treat poor quality groundwater, adjust the pH to make it beneficial for crops. Carry on.

Secretary Penn: Thank you very much. Just as your name implies, Sweetwater.

U.S. Rice Producers Association, Mr. Greg Yielding.

Mr. Yielding: Salim. My name is Greg Yielding. I'm the field director for the U.S. Rice Producers Association. We wish to have a Kazakh-U.S. rice producer partnership to supply rice to Kazakhstan mills when they run out of their own rice for processing. We also have information on value-added products that they might produce. I'm glad to be here. This is my second trip, and it's a wonderful country. Thank you.

Secretary Penn: Thank you.

The U.S.-Kazakhstan Business Association, Mr. William Viehl.

Mr. Viehl: Good morning. I'm Bill Viehl. I'm based in Washington. I run this association, have been doing so for the past seven years since it was created. We have about 20 large American multinational companies, two of them are represented here today—Case New Holland and Deere. But that's a picture of the past. I think this conference is a picture of the future with lots of medium sized businesses, and we're hoping to see those types of organizations become members of our association. Our association basically promotes investment and trade in Kazakhstan. Thank you.

Secretary Penn: Thank you.

And now from Secretary Johanns's home state, Nebraska, Valmonte Irrigation, Incorporated, Richard Berkland.

Mr. Berkland: I'm Richard Berkland from Valmonte Irrigation. We're headquartered in Omaha, Nebraska. We're the world's largest provider of mechanized irrigation. We have factories in 34 countries, and we supply exports to over 100 countries.

Secretary Penn: Very good, thank you.

Worldwide Sires, Ltd., Tony Evangelo.

Mr. Evangelo: Thank you. My name is Tony Evangelo. I am the area director of marketing for Worldwide Sires in Eastern Europe and parts of Asia as well. You'll have to excuse my semi-casual appearance. My luggage didn't make it either. [Laughter].

Worldwide Sires has been exporting cattle genetics around the world for nearly 35 years, and last year we had experience exporting to over 70 countries worldwide. We are based out of Iselia, California, and we represent and are owned by two of the largest AI cooperatives in the U.S., Accelerated Genetics and Select Sires, which combined have a membership of over 70,000 farmers.

I'd like to say thank you to the FAS and to the Ministry of Agriculture for hosting us here, and I'm looking forward to my visit to Kazakhstan. Thank you.

Secretary Penn: Thank you.

I think that all of you would agree with what Secretary Johanns said earlier, that we have a very diverse participation in this mission. We have some of the premier companies in the U.S. representing a broad spectrum of all of the agricultural businesses.

Again, I want to thank you, the American businesses – did I miss someone? I'm very sorry.

Voice: You missed me because I was an add-on. I've been in Kazakhstan for a long time, over a 13 year period, but I'm a dairy farmer, and I am a volunteer through Windrock International. I also represent Tara Service that sells semen, a U.S. company that's been in business in Kazakhstan for 10 years.

Secretary Penn: Windrock International is an Arkansas Foundation. We have to mention that state as well.

Again, you can see that we have a very diverse group, a very broad group, and I want to say personally we very much appreciate your participation in this investment mission. Again, we know of the time and expense involved, and I think this certainly demonstrates your interest.

So let me close this session this morning and say on behalf of USDA and on behalf of Secretary Johanns, we're very much pleased to be here. We're very much pleased to be in the role of facilitating the interaction between the American business community, the Kazakhstan business community. We want to facilitate trade and investment certainly in the food and agricultural area. We look forward to working with you and to seeing more of the country and to being with you during the rest of the week.

Thank you very much and thanks again to our speakers this morning.

[Applause].

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