A Kazakhstani company is getting ready to launch the country’s second processing facility manufacturing both sunflower and rapeseed oils, with a goal to export its products to the lucrative Chinese market.

Tag-Tin, a subsidiary of agri and industrial holdings firm Vostok Agro, was building the 50,000 tonnes/year plant as part of an ongoing effort to diversify production and process its own raw materials, wrote The Astana Times on 16 March.

The 1bn tenge (US$3.13M) plant, funded partially by the Kazakhstani government, was expected to come online in May, becoming the second facility in Kazakhstan capable of processing both sunflower seed and rapeseed.

Yerzhan Nurbayev, CEO of Vostok Agro, said 50% of its raw material would come from the company’s own production, with the rest sourced from local farmers.

“We plan to create a farm cooperative, which will include farms engaged in growing sunflower and rapeseed to guarantee the provision of raw materials,” Nurbayev told The Astana Times.

The plant owners were not interested in exporting sunflower seeds but in processing them to add value, explained Nurbayev.

The plant could easily switch production to rapeseed oil when sunflower seed supply was insufficient or exhausted.

Nurbayev said both sunflower and rapeseed oils were in great demand in the Chinese market, but the firm intended to sell its sunflower oil output domestically if possible.

Rapeseed production was not widespread in Kazakhstan due to high seed prices compared to sunflower – rapeseed price was 44% higher than sunflower seeds – and the difficulties in the rapeseed production process.

“This year, China had a crop failure in rapeseeds. Unfortunately, we cannot export rapeseed in the form of raw material as Kazakhstan is not included in the list of suppliers for this oilseed. We can export sunflower seeds, sunflower oil and rapeseed oil, but not rapeseed itself,” explained Nurbayev.

Most Kazakhstani oil processing companies supplied the local market, but their output was not able to satisfy the demand, with most of the shortfall filled by Russian imports.

In 2017, Kazakhstani sunflower oil producers exported their product mostly to Afghanistan, Tajikistan and Uzbekistan but were facing challenges with increased railway tariffs and an unstable currency exchange rate, said The Astana Times.