Construction of Kia new plant in Kazakhstan: company finances such project outside of South Korea for 1st time
Images | primeminister.kz
The construction of a full-cycle plant for the production of Kia cars was launched in Kostanai. Roman Sklyar, First Deputy Prime Minister of the Republic of Kazakhstan, and Kumar Aksakalov, Akim of Kostanay region, took part in the official ceremony of launching the works, primeminister.kz reports.
The start of construction of such a large industrial facility was the result of agreements of the Head of State Kassym-Jomart Tokayev with the management of the South Korean company. Recall that in January of this year, the President, attending the launch of small-unit production of Kia cars in Kostanay, emphasized the importance of further expansion of industrial cooperation and the formation of engineering base.
The production capacity of the new plant, where it is planned to create 1,500 high-paying jobs, will amount to 70,000 cars per year. About $250 million of foreign investments will be invested in the project.
As part of his speech, Roman Sklyar noted that Kia for the first time in history makes a direct investment in a joint venture and construction of the plant outside the Republic of Korea.
Construction in Kostanai of a full-cycle plant for the production of Kia cars can be called a truly breakthrough high-tech project for the engineering industry. This project will give a real multiplier effect, will increase the level of training of a new generation of engineering and technical personnel, as well as significantly accelerate the transition to the next stage of localization development," he said.
According to the First Deputy Prime Minister, the emergence of the plant with such a key investor will be a crucial stage in the development of the domestic industry and will be a good example for future joint investment projects with South Korea in all sectors of the economy.
Construction work is expected to be completed in 2024, after which equipment installation will begin. In the first quarter of 2025, the plant will be piloted and the full production cycle will open in the second quarter.
Today, we at Kia are honored and proud to have the opportunity to contribute to the development of the economy of the Republic of Kazakhstan. I strongly believe that the new plant in Kostanai will play an important role by providing a unique workspace where citizens, university graduates and engineers can gain a higher level of work experience for many years to come," Kia Corporation President and CEO Ho Sung Song said in a video message.
The South Korean company expressed its full support for the Republic of Kazakhstan's industrial policy in terms of increasing the level of local content in the automotive industry. Thus, Kia is already actively working on opening a localization center in Kostanai. Here, with the participation of small and medium-sized businesses will be engaged in the production of automotive components.
Akim of the region Kumar Aksakalov is confident that the launch of a modern high-tech enterprise with the involvement of the world's best practices will contribute to the increase in production volumes in the automotive industry of the republic.
The development of mechanical engineering will have a multiplicative effect on the development of the region. In particular, the creation of one job in mechanical engineering will lead to five to six jobs in related industries. To increase the level of localization of production around the new plant, a belt of small and medium-sized businesses will be created as suppliers of parts and components," Kumar Aksakalov said.
Ambassador of the Republic of Korea to the Republic of Kazakhstan Dae-ik Jo noted that for more than 30 years Kazakhstan and South Korea have consistently strengthened mutually beneficial partnership.
Today the countries are actively developing practical economic cooperation, which corresponds to the goals of economic reforms announced by the President of the Republic of Kazakhstan Kasym-Jomart Tokayev in his Address to the people of Kazakhstan. These reforms are aimed at the diversification of industry in the republic through the development of the manufacturing sector," he said.
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Kazakh deputy criticizes performance in mechanical engineering sector despite funding infusion
Images | Akorda
Kazakhstan has been funneled 285 billion tenge in the mechanical engineering sector from the republican budget in the past three years, Kazinform News Agency correspondent reports.
285 billion tenge has been allocated to the mechanical engineering sector from different sources (the Development Bank, Industrial Development Fund, KazakhExport) over the past three years. In 2023, 13 thousand vehicles were made using the small node assembly method in 2023, which is a 9.7% of the overall vehicles produced last year. It is expected that the figure will rise to 64% by 2027, said Majilis deputy Nurtai Sabilyanov, while noting the low performance rate given the support provided by the state.
The deputy stated that many industrial companies acquire vehicles and equipment only (780 projects or 49.5%) with the support received from the Industrial Development Fund, which has nothing to do with the development of the industrial sector.
Moreover, according to the industry review of the National Bank, a weighted average capacity utilization in the manufacturing industry stood at a mere 51.1% in the fourth quarter of 2023. This raises a question of whether annual capital infusions in new projects are reasonable, said the deputy.
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Kazakhstan recovers 40bln tenge of illegally acquired assets
Images | primeminister.kz
Today was held a regular meeting of the Commission on the return to the state of illegally acquired assets under the chairmanship of Prime Minister of the Republic of Kazakhstan Olzhas Bektenov, primeminister.kz reports.
The Commission approved agreements on the voluntary return of illegally acquired assets to the state for a total amount of more than 40 billion tenge, of which more than 38 billion is cash, as well as a business centre in Astana worth 2 billion tenge. The returned funds will be used for social purposes, including the elimination of the consequences of floods.
In addition, the signing of investment agreements worth 7 billion tenge was approved, under which two infrastructure facilities will be built in Astana and Shymkent by persons who fell under the Law of the Republic of Kazakhstan "On the return of illegally acquired assets to the state’" The realisation of these projects will create jobs and provide an additional inflow of tax revenues.
The work on the return of assets is a direct realisation of the policy of the Head of State on the restoration of social justice. All returned funds are used for the benefit of the people of Kazakhstan," Olzhas Bektenov emphasised.
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Kazakhstan turns to high-value added manufacturing with building polyethylene plant it Atyrau region
Images | primeminister.kz
Prime Minister of the Republic of Kazakhstan Olzhas Bektenov met with the heads of the world's largest oil and gas chemical companies – President of China Petrochemical Corporation (SINOPEC) Zhao Dong and Chairman of the Board of SIBUR LLC Mikhail Karisalovб primeminister.kz reports.
The key issue is the joint construction of the first integrated gas chemical complex for polyethylene production at a cost of about $7.7 billion and a capacity of 1.25 million tonnes per year, which will account for 1% of the world's total capacity.
A tripartite protocol was signed during the meeting, officially finalising SINOPEC's entry into the project. The ownership structure of the plant is as follows: KazMunayGas 40%, SINOPEC 30%, SIBUR 30%.
Head of the Government emphasised the importance of the project due to its focus on the production of high value-added products.
A gas separation complex (GSC) will be built at the Tengiz field to supply the "Polyethylene" project with feedstock (ethane). The capacity of the GSC is 9.1 billion m3 of dry gas processing per year, of which 1.6 million tonnes of ethane is expected to be produced.
Ethane will be sent through the main pipeline from Tengiz to the Karabatan site (territory of FEZ NINT, Atyrau region), where the polyethylene plant will operate.
It is planned to produce about 22 grades of polyethylene using American licence technologies of Chevron Phillips and Univation, 40% of which will be premium grade. A wide range of applications for both industrial and household purposes makes polyethylene the most popular polymer in the world.
Polyethylene is used in the fields of medicine, prosthetics, defence, food industry, construction, space industry and others. This polymer is used in the production of a wide range of goods: from plastic wear-resistant pipes, construction materials, medicines, syringes, prostheses to bulletproof vests, clothing for astronauts and car parts. Target markets include Kazakhstan, CIS countries, China, Turkey and European countries. At the same time, for domestic consumption, the realisation price will be lower than the import price.
The Head of State has identified deep processing of hydrocarbons as one of the key areas of development of the oil and gas sector. The priority for our economy is high conversion production producing products with a rapid increase in added value in the technological chain with an export orientation. The added value between the initial feedstock ethane and the third conversion product polyethylene increases 20 times, from $80-90 to $1600-1800 per tonne. The Polyethylene project will certainly give a serious impetus to the development of both the manufacturing industry and the country's economy as a whole. According to experts' calculations, the contribution to the country's GDP by 2030 from the implementation of the project is estimated at approximately 1.2%," Olzhas Bektenov said.
The construction of the plant is planned to be completed by 2029. During the construction period more than 8 thousand jobs will be created, during the operation period about 850 jobs will be created.
It was noted that the project is realised with the support of the Government. The plant will be built on the territory of a special economic zone with the provision of appropriate infrastructure and special tax regime. In this regard, Prime Minister emphasised the attention of the project participants to the need to maximise the use of local potential.
We on the part of the state provide comprehensive support in the implementation of projects important for the country's economy. At the same time, we expect you to increase the share of local content. For this purpose, it is necessary to determine the list of goods and equipment that will be mandatorily purchased from domestic producers. Special attention should be paid to training of Kazakhstani specialists and transfer of competences. It is important for us to maximise the attraction of local personnel, including for management positions in the project. We count on a similar approach in the implementation of other joint projects," Prime Minister emphasised.
Thus, in addition to the plant "Polyethylene" it is planned to build a gas separation complex and a trunk pipeline.
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