Essence of Silk Road
Chinese businessman sees opportunity in Kazakh camel milk
If there’s one animal that can best symbolize the Silk Road, it’s probably the camel. Its ability to endure extreme heat and long periods of travel has made it the ideal caravan animal in central Asia.
Today, camels are no longer used as a method of Silk Road transport, but one Chinese businessman saw a business opportunity in the animal and wants to promote and export it to China through the Belt and Road initiative.
The opportunity is camel milk, which for thousands of years provided an important means for human survival in the desert. Yang Jie, a businessman from Daqing, Northeast China’s Heilongjiang Province, launched a camel milk factory in the historic city of Turkestan, southern Kazakhstan, last year, collecting milk from local camel farmers and turning it into milk powder.
Exploring the Silk Road
Before coming to Kazakhstan, Yang owned a company manufacturing agricultural water-saving equipment in Daqing. In 2015, he started to consider expanding his factory overseas.
A shrewd Chinese businessmen, Yang knew how important it is to follow China’s national policies when doing businesses, and his choice fell naturally on Kazakhstan, a major Belt and Road country and China’s neighbor.
“The Belt and Road initiative was the main reason why we considered the country in the first place. The Chinese market was saturated, so we thought about doing a business survey in Kazakhstan in 2015 before opening an equipment factory there,” he told the Global Times.
Yang has hyperglycemia, and he often ran out of medicine during his trip in Kazakhstan. During his visits to two local hospitals, both doctors recommended camel milk, saying the milk, lower in cholesterol and lactose than cow’s milk and higher in micronutrients, has a positive effect in controlling blood sugar.
For thousands of years, camels were the main working animal for Kazakh nomads, and shubat, a drink made of fermented camel milk, has is a household drink in Kazakh families and served to welcome the guests.
Yang can still remember the first time he tasted shubat in Kazakhstan. The fermented milk has a strong sour taste and a pungent smell – it’s not something that foreigners will fall in love with immediately. “I could barely swallow it,” he recalled. He later learned that the original camel milk tastes just like cow’s milk, but locals added a special lactic acid bacteria to make it last longer.
Despite this first impression, Yang was drawn by its nutritional value and commercial potential. He invited experts from the Inner Mongolia Institute of Camel Research to study the nutritional value of camel milk, and did business research on camel milk products in Kazakhstan. He found that while people can buy packaged camel milk in supermarkets, most camel mike is served fresh from camel milk farms, and the level of commercialization of camel milk is relatively low compared with cow’s milk.
Yang spotted a business opportunity, and after researching different states, decided to build a camel milk factory in Turkestan, in southern Kazakhstan. The dry and hot temperature here, sometimes soaring to over 50C in the summer, provides an ideal habitat for raising camels.
With an investment of $32 million, he launched a factory capable of processing and pasteurizing 100 tons of camel milk each day and producing 1.5 tons of camel milk powder. Different from the traditional treatment of adding special lactic acid to the milk, he pasteurized it through a modern processing line so that their flavors are more acceptable to the foreign market. This is the only project in the city of Turkestan invested in by a private Chinese company.
One problem Yang had to solve was securing a steady supply of camel milk.
As a foreign company, Yang and his team thought about many ways to gain trust from local farmers, who had little knowledge of China or Chinese businessmen.
In the beginning, instead of signing long-term contracts with them, he tried to foster trust by buying camel milk from farmers at the market price with cash. “Sometimes we received camel milk that didn’t really meet our standard. But in order to get the farmers’ trust, we still took it in and would rather throw it away than returning the milk to the farmers,” he said.
Among the 100 or so employees of Yang, only about a dozen are Chinese. “Our Kazakh employees carried out all the execution of our business plans, including communication with camel farmers, milk transportation and working in the production line,” he said.
The local government’s support was also indispensable. For each liter of camel milk local farmers sold to Golden Camel, the government of Turkestan offered 50 tenge ($0.14) as an incentive.
After months of cooperation, 48 camel farmers with over 14,600 camels have agreed to sign long-term supply contracts with Yang.
Zhazira Ozatkyzy, a Kazakh employee, joined the company in 2015 when the it was at its preparation stage. Ozatkyzy spent her childhood in Urumqi, Xinjiang.
“Chinese and Kazakh employees get along very well. The biggest cultural difference is probably that Chinese people are more hardworking.”
Yang said in the beginning, many friends were skeptical about his project. “My businessmen friends from China were worried that Kazakhstan wasn’t legally and politically stable enough for long-term investment. On the Kazakhstan side, Kazakhstanis weren’t sure whether we would stick to our business commitment.”
But as his production line started to produce the first batch of camel milk powder this year, and as he started negotiating about exports with the Chinese authorities, Yang is now confident about the future of his company.
Apart from camel milk, Yang is also considering to tap deeper into the camel economy, and develop skincare products with camel milk and camel hair products.
Yang Jie in his camel milk factory Golden Camel in Turkestan, Kazakhstan, in April, 2016