Cement, Energy and Environment July-Sep 2002

vo lume of construction likely to come up pursuant to the approval of thi s plan would be quite substantia l. Indian Construction companies like Larsen and Toubro, etc., are already vying for chunk of the contract. Some of the relevant observa ti ons of working in Kazakshtan as per international business experts are: Ca refully study the market before making any commitments - The country's companies trade with 135 nations having alternative sources of supply and working on diffe rent terms at various price ranges. South Asian, Russian, and Eastern European companies carry out aggressive marketing strategies in Kazak hstan. Obta ining a comprehensive understanding of the market may require one or several prelim inary on-s ite visits and some investment into market analysis. These initial investments, however, wi!! save any company a lot, from wasting resources as a result of a poorly chosen market entry strategy. Take medium to long-te rm approach - The Kazakshtan market operates with 20-200 per cent' profit margins (depending on the types of ve ntures), pay ing so lid ri sk premiums. However, typically an SME company/Joint Venture can count on earning its first profit after 2-3 years of doi ng business in Kazakshtan. Obviously it varies from project to project and case to case. Ensu re a consta nt marke t presence. The first sales usually do not happen immediate ly since potential local partners, clients, and government officials prefer to get acquainted with outside firm at more informal level before buying. Spec ifically, establi s hing a representative office or hiring an individual representative (avoiding establ ishment of a lega l entity) can ensure effective market presence. This option is favorable from the taxation s tandpoint s ince Kazakshtan legislati on prov ides for zero rate income tax on representative office and '.1 number of other tax breaks. Find yourself a tax and legal adv iso r before forming a partnership or setting up a lega l enti ty - Having competent tax and legal advisor from the outset can be cruc ial for ensuring effec tive deve lopment of the company. Maintain positi ve working relations with governments officials whenever possible and participate in gove rnment tenders - In Kaza kshtan , go vernment procurement serves as one of the key types of guaranteed demand. Additi ona II y, f u If iI 111 ent of government o rders and part icipation in tenders can create a pos iti ve com pany image, provid ing valuable connections and saving time when dealing wi th the wide range of inspectors. Ens ure yo ur partner 's rel iabi lity and try to know intentions - Potential wrong do ing on the part o r the partner always remai n a possibility in Kazaksh tan. Consequently, it is advisable to carry out thorough due di ligence before the project is launched and occasional ly in the course of project implementation. A good consultant can save you from future embarrassing blushes here. For furth er queries, information on Kazakshtan, please feel free to write to: ,\/r. Raj Pallfrora lion. General Secreta1y Builders · Association of India (Delhi Centre) /01 . Shi1•am /louse Kammpura Commercia/ ( 'omplex Ne11• Delhi II 0015 Tel: 5-135856. 593.f.f5(} Fax: 9/ -l-5.f5/.f23 !·:mail: rpcc:l (} 1 rij\ vsnl.net IVeh: 11'\l'li'.COIIStnindia.com Courtesy: Indian Construction. Jut m. p 19-2(} Fax: 022- .f9505rr Email: bai(a }vsnl.com IVeb: II'II'Wbuildersindia.com