McDonald's announces belated foray into Kazakhstan market next month

A burger set is displayed at a McDonald's restaurant in Hong Kong in this photo illustration taken July 31, 2014. REUTERS/Bobby Yip

MOSCOW (Reuters) - McDonald's MCD.N will open its first restaurant in Kazakhstan in March and another 15 soon afterward in a belated foray into Central Asia's largest economy, a company executive and its Kazakh licensee said on Thursday.

After more than a decade of deliberations, the U.S. fast-food giant will launch an outlet in the Kazakh capital Astana on March 8 after investing $3.5 million in the franchise project, according to Khamzat Khasbulatov, president of McDonald’s Russia unit, which will support the expansion into Kazakhstan.

The Kazakh development licensee for McDonald’s will be Kairat Boranbayev, a local businessman and relative of veteran Kazakh President Nursultan Nazarbayev, who has been at the helm of the former Soviet republic since 1989.

“Kairat had been asking me this question - why are we not coming to Kazakhstan for such a long time?” Khasbulatov told a news conference in Moscow. “All logistics are now located closely to Kazakhstan and there will be synergy with Belarus.”

Russia’s first McDonald’s restaurant opened in Moscow in 1990, a year before the break-up of the Soviet Union, and it now has a total of 545 outlets. There are 11 McDonald’s in adjacent ex-Soviet republic of Belarus.

Boranbayev was previously involved in Kazakhstan’s gas business and his daughter is married to Nazarbayev’s grandson. Khasbulatov did not respond to a question whether Boranbayev’s personal connections to the Kazakh leader would help develop the McDonald’s branch of restaurants in Kazakhstan.

Once it appears in Kazakhstan, McDonald's is likely to face a strong challenge from other international fast-food giants like KFC YUM.N and Burger King, which have well-established restaurant chains in the steppe nation of 17 million people.

Reporting by Olga Sichkar; Writing by Dmitry Solovyov; Editing by Mark Heinrich