Asem Kenzhebek, an investment banker, founder of AI Karal brand and co-owner of the Black BioTechnology company, and her partners are going to start construction of the new plant to boost production of the biological supplement and organic fertilizer based on humin substances. Investors are going to create similar production sites in Turkey, Russia and Uzbekistan and combine them all into a single holding by 2024.
The estimated cost of the project is $100 million. The first round of funding is over and the second phase is under preparation. Meantime, AI Karal products have sparked interest in the U.S. and China.
With reserves of 12.1 billion tons of brown coal, Kazakhstan ranks sixth in terms of this type of resource after Germany, Australia, the U.S., China and Serbia, according to the World Energy Council. Humin is produced from leonardite, an oxidation product of lignite or brown coal formed from naturally compressed peat. Its appearance is a soft waxy, black or brown, shiny, vitreous mineraloid. Unfortunately, brown coal has high moisture content and is susceptible to spontaneous combustion that can cause problems in transportation and storage. That’s why it’s either used as a fuel at power stations located in the same area as mining fields or as a source of humin.
“The world has known about humin substances for hundreds of years. In Australia, Canada, America and Europe farmers have used humin as a supplement for animal food for the last 60 years,” said AsemKenzhebek. “Humin consists of two types of acid: humin and fulvic acid, the most valuable part of humin. All foreign products we’ve seen have 20% fulvic acid and 80%humin acid while the product by AI Karal has 65% fulvic acid and 35% humin. Fulvic acid is a natural antibiotic, antiviral drug and hepatoprotector. If an animal’s bowel digests only a part of hay, the fulvic acid can transport microelements directly to the cell membrane of an animal while absorbing toxins, heavy metals, surplus of antibiotics, and radionuclides. This means that the nutritive efficiency of forage might be increased,” she added.
As leonardite is nothing more than a byproduct of brown coal, it costs almost nothing. As a result, the material is extracted from coal industry waste while humin production is completely waste-free.
“Kazakhstan’s brown coal is considered world-class raw material for humin production. Plus we have the unique recipe of the product where many factors have been taken into account. Like the Coca-Cola Company, we have an original formula of the product which only a few people are familiar with,” Kenzhebek said.
Four areas of focus
It’s not easy to assess the capacity of the humin market because of the huge demand from consumers and industries which use humin for animal, plant and human supplements. That’s why AsemKenzhebek and her partners are going to turn their business into an international holding with four areas of focus.
The first area – Al Karal Bio – is the production of dry and liquid supplements for livestock and poultry. The company's factory produces dozens of tons of product per month. The factory also serves as a research site where humin and humane products are tested and studied.
However, the current volume of production is behind the demand. Therefore, Black BioTechnology has decided to build additional plants in Kazakhstan and abroad. The initiative may require about $100 million of investments in total.
“The other day, we received a land parcel in the industrial zone of Almaty. In 2022 we are going to start the construction of the factory. There are two sources of the project’s funding – our own money and investments,” Asem said.
It is expected that the Kazakhstani factory will start operation in the second half of the next year. In the first phase, the production level is going to be 500 tons per month or 6,000 tons a year. However, this is only a 2% share of the local livestock market (poultry, horses, camels and sheep are excluded) that proves that the humin products market in the country has really big potential.
Another project by AsemKenzhebek is a factory in Uzbekistan. The company has already registered a parcel of land and the construction is going to start in 2023. As Uzbekistan’s authorities are interested in the development of organic livestock breeding they facilitate all aspects of the project. The third factory is going to be built in Russia (probably in Tatarstan) and one more in Turkey. Along with bio products, all these factories are going to produce Al Karal Herb line products.
The second area is Al Karal Herb, humin products for plant farming.
“We have tested our supplements in stone fruit gardens in the Almaty region. They were in poor condition before we started but after treatment with AI Karal the process of recovering these stone fruits trees has begun. Now the garden’s owner wants us to produce a product for berries including blueberry and strawberry. For example, blueberries needs water and soil with low pH and AI Karal is the best tool to get what this berry needs. Moreover, our product also serves to protect from pests and diseases. Humin products are highly effective in recovering sick land as well as seed treatment,” Kenzhibek said.
The third area is Al Karal Pets, a humin product for pets. Experts say that the amount of this market is $100 billion and it continues to grow.
“Most likely these factories will be equipped with equipment from the well-known producer of food for pets from Belgium because this is a world leader in this sphere. Their technology, recipe and knowledge have been evolving for decades. The very first phase of dog food production will require $10 million of investments. We have already produced cat and dog food supplements at our research and production site. We see demand for these products from Hong Kong and China; five Chinese companies, for example, said that they are ready to sign an agreement once all humin factories are in place,” said Asem.
The fourth area is Al Karal Human, a line of products designed for people. According to AsemKenzhibek, the company is going to enter the U.S. market and now is aimed at acquiring the proper certificate from the FDA. Meanwhile, Black BioTechnology has already received the first request from America; the client wants them to design a line of ten humin products for people.
Money and People
“My partners and I have a vision of our business as a big biotechnology company with a strong research and development division, a department of international marketing and we are going to realize this concept by 2024. We have no problem with funding but also consider various options including attracting additional share capital,” Asem said.
She noted that hiring qualified staff in the area of agriculture is a more challenging task rather than attracting financial resources to the project.
“There is a lack of strong marketing specialists with experience in agriculture because we have no agricultural benchmarks in Kazakhstan we can use as a role-model in promoting animal food supplements. We see serious problems in the veterinary sphere and many just do not understand why animals might need food supplements,” the businesswoman highlighted.
Because the vast majority of the company’s clients are farmers from remote regions, it’s hard to sell the supplements online.
“About 80% of our clients are small farms and agricultural enterprises. Sometimes there is no electricity in some remote villages, much less the internet. So, we are forced to visit all these farms and present clients our product in person. It’s like being a missionary. But it is worth it because humin supplements in agriculture complex can strengthen the food security of Kazakhstan and boost non-resource export,” AsemKenzhebek stated.