McDonald’s all set to make Kazakh debut

Kazakhstan’s first McDonald’s will open March 8 in Astana. The world’s largest fast food chain has been operating in Russia since 1990 and last year opened its 500th store in that country (there are now 545)–while also, for the first time in Russia, permanently closing a store.
Moving into the Kazakh market, per Reuters’ report, took more than a decade to negotiate. The end phase of negotiations have stretched out over the past two years, a 2014 report from Eurasianet cited plans to open the first Kazakh McDonald’s in the later half of 2015 and in January bne Intellinews reported that March was the target.
The Kazakh franchise will be run by Kairat Boranbayev, who once headed KazRosGas, a joint oil venture between KazMunayGas and Gazprom. Boranbayev is related to President Nursultan Nazarbayev by marriage–his daughter, Alima, married Nazarbayev’s grandson, Aysultan in 2013. At a press conference in Astana, Boranbayev said the restaurant would be able to seat more than 200 people and would employ as many. Plans are to open 15 more McDonald’s restaurants in Kazakhstan by 2019 with a July 1 date set for opening a restaurant in Almaty.
But McDonald’s will be entering a market already familiar with two of its major competitors: KFC and Burger King.
KFC, which entered the Kazakh market under the direction of Russia’s Rostik Group in 2008, operates 29 restaurants split mostly between Astana and Almaty, but also has a location in Karaganda. Burger King ventured into Kazakhstan in 2012,opening a restaurant in Almaty–followed by 25 more located in Almaty, Astana, Aktobe and Atyrau.
Then there are local chains and restaurants, as Naubet Bisenov noted for bne Intellinews last month, “The US fast food giant will also compete with local burger chains and independent burger joints, as well as outlets selling Turkish doner kebabs and meat, cheese and chicken pies known as samsa.”
The golden arches of McDonald’s are almost universally recognized as distinctly American. In addition to Coca-Cola–which has plans to open a bottling plant in Astana–of course. At a time of economic hardship in Kazakhstan–which the country’s leadership surely recognizes but continues to dance around–McDonald’s may not have an easy time. Kazakhstan has consistently pushed for increased foreign investment and the entry of McDonald’s into the Kazakh market should be seen as part of this push.
But McDonald’s will be hard pressed as the Kazakh economy continues to tank. Recently, the country revised its economic expectations–from growth in 2016 of around 2.1 percent to just .5 percent. Others are more pessimistic, the Economist Intelligence Unit forecasted negative growth in Kazakhstan for 2016 — the first time since 1998.

Catherine (Katie) Putz is special projects editor for The Diplomat. She manages the monthly
magazine as well as writing on Central Asia, Afghanistan and security topics