Kazakhstan is launching the project "Small Industrial Zones", which provides for the provision of soft loans for the construction of ready-made production facilities. 

This was announced at the Government session by Minister of Industry and Construction Kanat Sharlapaev. Reports on the development of manufacturing industry were made by First Deputy Chairman of the Board of JSC "National Management Holding "Baiterek" Nurbolat Aidapkelov, Akims of Akmola region Marat Akhmetzhanov, Aktobe region – Askhat Shakharov and Ulytau region Berik Abdygaliuli. 

Production facilities under the new project will be built in all regions of the country. They will exclusively accommodate SMEs representing the manufacturing industry. Akimats need to speed up the process of launching the new project in the regions, the Minister emphasized.

In general, according to the results of 2022, the manufacturing industry occupies 13.4% of the country's GDP. Finished products were produced for 21.1 trillion tenge which is 2.2 times more than the indicator of five years ago. About 20,000 enterprises operate in the industry. Last year they paid 2.7 trillion tenge in taxes to the budget.

The policy of industrialization in Kazakhstan is being implemented within the framework of the updated Concept of development of the manufacturing industry until 2029. Annual target indicators have also been approved, the fulfillment of which is as follows: "Production volume growth" 103.1%, "Gross value added" 8 trillion tenge, "Labor productivity" $22.3 thousand / person.

For eight months, the volume of production of the manufacturing industry amounted to 14 trillion tenge with an increase of 3.1% compared to the same period of the previous year. In terms of sectors, machine building showed stable growth - 28.1%, due to the production of motor vehicles (+42.2%), machinery and equipment (+22.5%) and electrical equipment (+34.3%).

In light industry the growth amounted to 19.8% due to the production of textiles (+35.9%), in chemical industry the growth was 3.1%. Decrease of 4.3% is observed in the metallurgical industry. According to the Minister, the dynamics is recovering.

"Within the framework of the Address, the Head of State set a number of important tasks to form a strong industrial framework and ensure self-sufficiency of the economy. The tasks will be accomplished within the framework of measures to deepen processing and provide raw materials to manufacturing enterprises, to form basic infrastructure for industrial enterprises, to implement investment projects, including large and strategic ones, and to provide the market with a sufficient amount of preferential financing," Sharlapayev said.

The Ministry has done a lot of work to launch a mechanism for supplying raw materials to domestic processors. Three types of the most demanded metals - aluminum, copper and lead have been identified. Raw materials are provided to domestic processors on the basis of voluntary tripartite agreements at below-market prices. Twenty-five agreements have been signed, resulting in a significant increase in domestic processing of base metals over the first 8 months of this year. In the aluminum industry the growth was 34%, internal processing of copper increased by 6%, lead by 10%.

The Government intends to strengthen the provision of raw materials for enterprises of the processing industry, for this purpose, the necessary measures are being studied. 

Kazakhstan is working out new approaches for development and deepening of internal processing of raw materials through regulatory and fiscal measures. For this purpose, 14 special economic zones and 35 industrial zones have been created. At these sites, projects are put into operation in an accelerated manner, due to the priority right to obtain a land plot and ready infrastructure. In addition, tax and customs privileges apply to priority sectors of the economy in FEZs. All these measures enabled the implementation of 325 projects worth 2.8 trillion tenge. On the territories of industrial zones 226 projects worth 900 billion tenge were launched, 12 thousand permanent jobs were created. Another 346 projects are in the process of creation.

The Ministry has carried out work to increase the portfolios of development institutions of Baiterek Holding for a total of over 620 billion tenge. When implementing investment projects, businesses can take advantage of such popular instruments as lending and leasing. Large investment projects are stimulated by the instruments of the Development Bank of Kazakhstan. To finance working capital in December last year, the CDB additionally allocated 50 billion tenge. Also this year, the portfolio of Qazaqstan Investment Corporation was increased by 35 billion tenge.

"All the above programs are in the active phase of development and are available to entrepreneurs at a rate of 3% to 11%," Kanat Sharlapayev said.

The country has realized 64 new projects out of 170 planned for this year. Most of the enterprises are opened in the construction industry, food industry and machine building. Thus, the slag processing plant in Aktobe region was launched in August 2023, during the visit of the Prime Minister to the region. In May this year on the site of "Kazakhstan Oil Equipment Plant" opened production of mobile drilling rigs. In the Zhetisu region, the company "Diamond Ceramics" in September more than doubled the output of ceramic tiles to 3.5 million m2 per year. It is expected that the capacity of the enterprise will cover up to 10% of imports of these products.

The Minister also listed the key projects, which are expected to be launched by the end of this year. Thus, in Karaganda region in December a plant for the production of household appliances will be opened. The enterprise will produce a wide range of products: TV sets, electric water heaters, vacuum cleaners, stoves, mini ovens, kitchen hoods, semi-automatic washing machines under ARTEL brand.

TNC Kazchrome JSC plans to launch a modern plant for the production of special coke with a capacity of up to 400 thousand tons of products per year. In Kostanay region "SaryarkaAvtoProm" plans to start production of Chevrolet Onix cars by small-unit method.

"Regionally, the largest number of projects are launched in Astana, Turkestan and North Kazakhstan regions. The leaders in terms of investment volumes are Karaganda, Pavlodar and Almaty regions. In addition, the largest number of projects were launched in West Kazakhstan region, Mangystau region and Turkestan region. In 4 regions projects were not launched," the Minister emphasized.

In some regions this year there is a decrease in investment in the manufacturing industry. Akims of regions reported on the reasons and planned measures at the Government session. According to Marat Akhmetzhanov, in Akmola region for 8 months of 2023 the volume of investments in the manufacturing industry of the region amounted to 28.7 billion tenge. The decrease in the indicator is due to the completion in 2022 of the construction of a major project implementation project of gold extraction plant "RG Processing". 

At the same time, there is a positive dynamics of total investments. The pool of manufacturing industry for 2023 includes 9 projects for 40.5 billion tenge. Of these, 4 projects for 28 billion tenge have been commissioned. The launch of the remaining 5 projects in the region is planned by the end of this year. 

In Aktobe region the share of manufacturing industry in the total index is 40.5%. Askhat Shakharov, the region's akim, noted that the main decrease occurred in metallurgy. The reason is the repair of furnaces of ferroalloy plant and modernization of equipment of rail and steel mill. It is expected that after its completion the enterprise will increase rail production by 1.4 times.

For the development of the manufacturing industry in the region till 2027 it is planned to launch 49 actual investment projects, it is planned to create about 9 thousand jobs.

#Government session #Manufacturing industry