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Korean Business Booms in Kazakhstan

Posted January. 02, 2007 03:01,   


Downtown Almaty is nothing like the Almaty three years ago. Mercedes Benz and BMW cars have replaced old Soviet-made automobiles. With so many new buildings sprouting everywhere, the whole city has turned into one big construction site. Picturesque townhouses fill the middle class neighborhoods on the outskirts of the city bordering the Tien Shan Mountains.

The scene is reminiscent of the Middle East and illustrates the effects of oil money brought in from newly developed sites in the Caspian Sea.

Kuat (Chairman: Oleg Nam), with its logo all over downtown Almaty, is Kazakhstan’s biggest construction company and is owned by an ethnic Korean. Yuri Chae, once Soviet Union’s national boxer and now the President of the Association of Koreans in Kazakhstan the Association of Koreans in Kazakhstan, started the company 14 years ago. The company got a big boost from the oil money and the construction boom that started when the country moved the capital from Almaty to Astana.

The company has grown 50 times its size four years ago. The company’s decision to build high-end commercial/residential buildings and modern office buildings in Almaty and Astana paid off. Kuat built Almaty Tower, the city’s landmark, and the Integrated Government Building.

The construction company, Vertex (Chairman: Ogai Edward), and the major engineering works company, In Almatyn (Chairman: Vronislav Shin), are also owned by ethnic Koreans. It would be an understatement to say that Koreans have taken over the city.

Many of the emerging millionaires are ethnic Koreans in their thirties and forties, who did not miss a beat in seizing business opportunities.

Sulpak, an electronic goods distribution chain, is at the center of Almaty’s shopping Mecca. The name Sulpak derives from the last names of the two co-owners Kazakh chairman, Sultan, and the ethnic Korean chairman, Andrei Pak. The company ranks second in the industry in terms of sales. Chairman Pak is the son of the renowned scientist Ivan Pak.

Vyacheslav Kim, another ethnic Korean, owns Planet, the country’s biggest electronic goods distribution chain. Technodome Plus (Chairman: Edward Kim), which ranks third in the industry, is also owned by an ethnic Korean.

Most ethnic Korean businesses started as construction companies and distribution companies. These are the areas dominated by Korean companies. LG and Samsung Electronics lead the Central Asian electronic goods market and 18 construction companies do business in the region.

Ethnic Korean companies partnered with these Korean companies from early on and received valuable business know-how. These days, it is the ethnic Korean companies that help out Korean companies enter the Kazakh market.

Although there are still many ethnic Koreans, who are in poverty, the number is dwindling. Even ethnic Koreans living in the farming areas say that they are relatively well off.

Koreadome, situated in a posh commercial/residential building built by Kuat, illustrates the prestige of ethnic Koreans in Kazakhstan. The entrance and windows of the building owned by the Association of Koreans in Kazakhstan are decorated like traditional Korea-style houses. The association uses the first and second floors, while the other floors are rented out. This building houses Korea related groups like the Koryo Daily and the Ethnic Korean Youth Association, and acts as the center of ethnic Koreans living in Kazakhstan. The Koreadome was built without any financial assistance from both the Korean and Kazakh government. Director Valentina In of the Association of Koreans in Kazakhstan says, “We had the resources, and saw no reason to ask the Korean government for aid.”

President Roman Kim of the Union of Small and Medium-sized Businesses in Kazakhstan says, “The Kazakh economy is booming. We look forward to working with Korean companies to reap further rewards.”