Kazakhstan to provide new Lay’s chips plant with tax benefits

The country’s government is eager to facilitate big investment projects / Photo: Shutterstock, photo editor: Dastan Shanay

According to Yersain Nagaspayev, Kazakhstan’s minister of industry and construction, the new PepsiCo plant will be located in a special economic zone offering tax benefits.

When asked about state support for the chip plant, which PepsiCo plans to build in the Almaty region, the minister said the launch of such a large investment project is a positive development for the country.

«The goal of investment projects is to ensure that capable and reputable companies enter Kazakhstan’s market. The PepsiCo project is being managed by the Ministry of Agriculture. On our side, I’d like to note that we have 16 special economic zones. Companies operating in these zones receive tax breaks under the law. This is what we see in practice. This is one of the measures the government uses to support investors and attract them to the country,» Nagaspayev emphasized.

The minister was also asked whether building a potato chip plant aligns with the government’s efforts to reduce the consumption of unhealthy food among Kazakhstani citizens. For example, in April, parliament reviewed a proposal to introduce an excise tax on all beverages containing sugar. In response, the official explained that the agency responsible for assessing the benefits and risks of specific products is the Ministry of Health, not the Ministry of Industry. The Ministry of Industry, for its part, is focused on boosting domestic production, Nagaspayev underscored.

«We are interested in large investors coming to the country, creating jobs and bringing new technologies. As the Ministry of Industry, we are not going to hinder the implementation of this project in any way,» he added.

In the summer of 2024, several media outlets reported that PepsiCo’s new salty snacks factory will be located in the city of Alatau, which officially gained city status in January 2024. Alatau is part of the Alatau Special Economic Zone (SEZ), established in December 2023. Under Kazakhstan’s SEZ legislation, companies operating within these zones are granted exemptions from corporate income tax, land tax and property tax for a period of 7 to 25 years, depending on the volume of investment.

Earlier this month, PepsiCo announced it is ready to double its investment in the construction of the Lay’s potato chip plant in the Almaty region. The company had initially planned to invest $160 million in the facility. With the increased investment, the plant will be able to process up to 210,000 tons of potatoes annually and produce up to 70,000 tons of finished products.

In addition, PepsiCo also plans to build a soft drink plant in the Almaty region in partnership with Carlsberg Group. The investment for this project could exceed $250 million.