Doing Business in an Industry With Difficult Economics - Food Master's Experience in Dairy Processing and Marketing in Kazakhstan

Food Master, a U.S.-based firm with dairy processing and marketing investments in Kazakstan, has found itself in an industry with difficult economics. Despite having excellent top management and doing many things correctly, this firm lost money in 1999 and was forced to restructure. While positive developments emerged for the firm in 2000 and 2001, the firm's long-run profit prospects remain uncertain. The challenges facing the firm and government agencies attempting to foster investment in Kazakhstan's dairy industry include shortages of quality milk, shortages of farm and agribusiness credit at acceptable terms, limited numbers of qualified mid-level and lower-level managers, and pervasive corruption. This study of Food Master's experience in Kazakhstan provides a detailed picture of the challenges facing agribusiness investors in the former Soviet Union