25 July 2022, 17:34
Press conference was held at the site of the Central Communications Service, dedicated to the activities of special economic zones in the country, the current state of operation and measures to improve them, as part of the instructions of the Head of State. The speakers of the event were Chair of the Committee for Industrial Development of the Ministry of Investment and Development of Kazakhstan Ilyas Ospanov, Deputy Chair of the Board of Qazindustry JSC Marat Bopazov, Chair of the Board of Aktau Seaport SEZ JSC Askhat Kabashev, Chair of the Board of Ontustik SEZ Erbolat Sariev, Deputy Chair of the Board of JSC Managing Company of FEZ Pavlodar Kairat Kairkenov.
Speaking with a keynote speech on the current state of the functioning of the SEZ and plans for the future, Ilyas Ospanov spoke about ongoing projects, work done, further vision and approaches to improve the activities of the SEZ.
According to him, domestic free economic zones are created for 25 years with the right to prolongation and represent a ready-made production site for attracting domestic and foreign investments, technologies, and competencies in order to create high-tech and competitive industries in Kazakhstan.
“Today, there are 13 FEZs operating in the country, which are represented in almost all regions. They have industry specifics that allow focusing on certain promising sectors of the economy,” said Ospanov.
He also informed that there is a special legal regime for FEZ participants, which provides for:
“In pursuance of the instructions of the Head of State Kassym-Jomart Tokayev, we have developed a Roadmap to improve the efficiency of the FEZ. The roadmap will become the main strategic document for the development of the SEZ and will allow systematizing and focusing the efforts of all interested parties on solving specific problems,” Ospanov noted.
According to him, the development of the document was preceded by a deep analysis of the situation, several months of work with the regions, with entrepreneurs.
Turning to the goals and objectives within the framework of the Roadmap, Ospanov noted that the issue of providing infrastructure remains acute for the FEZ.
“In general, the effectiveness of the functioning of any free economic zone in the world practice depends on the readiness of the infrastructure and its ability to meet the needs of the investor,” said Ospanov.
According to him, the average infrastructure completion rate is 70%, of which the FEZ Ontustik, Park of Innovative Technologies and Khorgos - Eastern Gate are fully completed.
To solve this problem, it is proposed to exclude territories that are not provided with infrastructure from the SEZ. This will save money on the construction of engineering and communication infrastructure and focus on completing the construction of the started facilities.
It is also proposed to introduce a combined regime that provides for the provision of a land plot for investors who are not subject to the DIA without the application of investment preferences.
The head of the Committee called the lack of a clear profile of SEZs the next problem.
“Although all SEZs were created for a specific industry, over time the profile blurred. It is proposed to reduce non-core activities in some FEZs, such as IT in the FEZ Seaport Aktau, healthcare in the FEZ Astana - Technopolis, construction in the FEZ Astana - New City. This will allow focusing the entire potential of the SEZ on industrial projects with a great socio-economic effect,” said Ospanov.
Third, according to the head of the Committee, a differentiated approach is proposed in providing investment preferences, depending on the technological complexity, the socio-economic effect of the project.
Fourth, it is the expansion of activities for development. Some potential investors cannot be accommodated in the SEZ due to inconsistency in the list of activities of the SEZ. The legislation of the country provides for the possibility of expanding the types of activities for a specific project, while procedurally this can take up to a year. In such conditions, there is a high risk of losing an investor due to bureaucratic delays. To this end, the Committee proposes to shorten the timeframe by excluding some elements of the agreement.
The Head of the Committee also spoke about the difficulties with the purchase of a land plot. According to the legislation, the land plots of the SEZ can be redeemed by the participants only after the expiration of the SEZ. This situation gives rise to investor uncertainty about the future and does not allow realizing the full potential of their production. In this regard, it is proposed to provide for the possibility of buying out a land plot after the commissioning of all facilities, by analogy with participants in industrial zones.
“All proposals are reflected in the Roadmap for the development of the SEZ, which was approved on June 27 this year. The roadmap will become the main strategic document for the implementation of all new approaches,” said Ospanov.
According to him, the following work has been carried out to improve the activities of the SEZ:
The Ministry will intensify work to develop and improve the efficiency of the SEZ. Favorable conditions will be created for attracting investments and implementing investment projects.
Speaking about the current work of the FEZ, Ospanov said that today the investment portfolio of domestic FEZs includes about 315 implemented projects worth 1.2 trillion tenge with the creation of more than 21 thousand jobs. The projects are presented in all basic sectors of the economy and are aimed at the production of goods with high added value and product complexity.
Briefly, the head of the Committee spoke about the latest launched projects. So, over the past year, 28 projects have been implemented, among which he noted:
- production of aluminosilicate microspheres (LLP KazCenospheres) on the territory of the FEZ "Pavlodar". The first stage was launched on April 20, 2021. The raw materials for production are cenospheres, light fractions of fly ash from thermal power plants and state district power plants. It is a component of ash and slag mixtures for hydraulic removal, which are coal-fired waste;
- production of ethyl/methyl tert-butyl ether and powdered polypropylene (LLP "Shymkent Chemical Company") on the territory of the FEZ Ontustik. The project was launched in December 2021. To date, the factory has created 130 jobs. The cost of the project is 11 billion tenge, the production capacity is 80 thousand tons of products per year. The company's products are 90% sold in the domestic market. For the first half of 2022, the company produced products worth 1.2 billion tenge, of which 502 million tenge was exported;
- a plant of volumetric-block housing construction (LLP "ModeX Astana") in the territory of the SEZ "Astana - a new city". Production is an automated flow process for the manufacture of reinforced concrete products - modules. The implementation of the project will optimize the construction process, make it more efficient in terms of time and use of resources and raw materials;
- at the beginning of 2021, the airport of the city of Turkestan (LLP "Turkistan International Airport") was put into operation. The airport's capacity is 450 passengers per hour;
- production of geomembrane and geosynthetic products (Altynarna Geosynthetics LLP) on the territory of the Saryarka FEZ. Products are manufactured on modern automated production lines, using only primary raw materials and the most advanced technologies. The production capacity is 6000 tons per year, more than 15 tons of geomembrane per day;
- CLASS agricultural machinery industrial assembly plant (ST Assembly LLP) on the territory of QYZYLJAR FEZ.
The technological process of production involves the assembly of Tucano combines, Xerion tractors and CERIO headers. The annual production capacity is 420 pieces of equipment.
ST Assembly LLP and the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan signed a Roadmap, according to which a technical audit of domestic enterprises producing components will be carried out in order to further their entry into the global chain of the world brand CLAAS. In addition, an additional 256 projects worth 4.3 trillion tenge are under implementation with the creation of more than 24 thousand jobs.
The head of the Committee also spoke about the key projects being implemented by the end of this year. Among them:
- construction of the first integrated gas chemical complex (Kazakhstan Petrochemical Industries Inc LLP). The production capacity of the plant is 500 thousand tons of polypropylene per year. The project is aimed at the production of polymers for the diversification of industrial sectors.
- a plant for the production of sucker rods and couplings (LLP "EVEREST TECHNO") on the territory of the SEZ "Seaport Aktau". The cost of the project is 14.2 billion tenge with the creation of 50 jobs. The plant will produce 300,000 sucker rods and 350,000 couplings for them.
- production of medical masks and respirators (MFA International LLP) on the territory of the FEZ "Astana - a new city". At the first stage, the production capacity will be 2.5 million units of FFP2 and FFP3 respirators per year. At the second stage - 10 million units per year, including the production of gas masks and filters, as well as self-oxidizing masks for evacuation. 50% of products are planned to be exported to Russia and the countries of Central Asia.
FEZ "Ontustik": 14.25 tenge of private investments were attracted for 1 tenge of invested budgetary funds
Further, Erbolat Sariev, Chairman of the Board of JSC “Managing Company of FEZ “Ontustik”, spoke about the activities of the FEZ “Ontustik”. According to him, the special economic zone "Ontustik" was established in 2005 in order to develop the textile industry. 8.2 billion tenge of budget funds were allocated for the construction of infrastructure facilities.
The total area of the FEZ is 225 hectares, of which 25 hectares are subzones. The priority activities of the FEZ "Ontustik" are light, chemical, petrochemical industry and partly mechanical engineering.
“Today, the project pool of the Ontustik special economic zone consists of 53 projects with a total investment value of 130.4 billion tenge, which provide for the creation of 6,285 jobs,” said Sariev.
32 projects were implemented on the territory of the FEZ for a total investment of 55.2 billion tenge, with the creation of 2,446 jobs.
In the period from 2010 to the first half of 2022:
- the volume of production amounted to 126.3 billion tenge;
- export volume - 62.8 billion tenge;
- tax and social contributions - 7.1 billion tenge.
Speaking about the effectiveness of the SEZ, Sariev said the following.
8.2 billion tenge of budget funds were allocated for the construction of infrastructure facilities. At the moment, 14.25 tenge of private investment has been attracted for 1 tenge of invested budgetary funds, of which 6.7 tenge have actually been invested. Since 2010, 7.16 billion tenge has been returned to the budget through tax and social contributions.
“The volume of production for 2021 amounted to 30.3 billion tenge, which is 94.2% more than in 2020, which amounted to 15.6 billion tenge. The volume of exports of manufactured products in 2021 amounted to 13.5 billion tenge, which is 45.1% more than last year, which was 9.3 billion tenge,” said Sariev.
Also, according to him, tax and social contributions in 2021 amounted to 1.7 billion tenge, which is 54.5% more than in 2020, which amounted to 1.1 billion tenge. The number of jobs in the territory of the FEZ "Ontustik" for 2021 amounted to 2,390 people, which is 41.4% more than last year's figure, which was 1,690 people.
The volume of production for the first half of 2022 amounted to 18.1 billion tenge, which is 72.3% more than for the same period in 2021, which amounted to 10.5 billion tenge. The volume of exports of manufactured products for the first half of 2022 amounted to 6.7 billion tenge, which is 18.2% less than last year, which was 8.2 billion tenge.
Tax and social contributions for the first half of 2022 amounted to 0.88 billion tenge, which is 17.3% more than for the same period in 2021, which amounted to 0.75 billion tenge. The number of jobs in the territory of the FEZ "Ontustik" for the first half of 2022 amounted to 2446 people, which is 12.8% more than last year's figure, which was 2168 people.
“Over the entire period of operation of the FEZ, enterprises exported products worth 62.8 billion tenge, (49.7%) of the total production. Goods produced by FEZ residents are exported and are in demand in 23 countries of the world,” Sariev said.
According to him, taking into account the expansion of existing enterprises, in 2022-2024. 23 projects are expected to be implemented for a total investment of 75.6 billion tenge with the creation of 3944 jobs. Of these, since the beginning of this year. 2 projects were put into operation for a total investment of 0.350 billion tenge with the creation of 110 jobs.
The head of the FEZ also said that today the total area of the territory of the FEZ "Ontustik" occupies 74.02 hectares (37.01%), ongoing projects - 39.39 hectares (19.7%), infrastructure facilities - 55, 9 ha (27.95%), vacant land plots - 30.69 ha (15.34%).
Work is underway with unscrupulous participants and the seizure of land. The management company monitors projects on an ongoing basis. Thus, since 2010, the Management Company has terminated the Agreements on the implementation of activities with 30 companies from which land plots with a total area of 83.19 hectares were withdrawn. If we talk about priority areas of work, for example, the total volume of light industry production in the Republic of Kazakhstan is $ 311.7 million. Of these, the share of Ontustik FEZ is 20.5%.
The head of the FEZ also said that since December 2020, the Competence Center for Light Industry, created on the basis of the College of Light Industry and Service, has been operating on the territory of the FEZ.
“The Competence Center trains personnel for FEZ enterprises. Students and graduates of the Central Committee cover 30-40% of the personnel of the enterprises of the FEZ "Ontustik". To date, this practice is used only in the FEZ Ontustik and it has shown its effectiveness in the form of prompt filling of vacancies at the enterprises of the FEZ Ontustik,” said Sariev.
Among the key features of the SEZ, Sariev named:
platform for unique productions.
- carpets and rugs;
- cotton cellulose and carboxymethyl cellulose;
- methyl tert-butyl ether.
The territory of the SEZ "Seaport Aktau" is 2140 hectares and consists of 9 separately located subzones.
Also, Askhat Kabashev, Chairman of the Board of JSC FEZ, spoke about the activities of “SEZ “Seaport Aktau”. According to him, the Aktau Seaport Special Economic Zone was established in accordance with the Decree of the President of the Republic of Kazakhstan on April 26, 2002, valid from January 1, 2003 to January 1, 2028. The territory of the SEZ is 2140 hectares and consists of 9 (nine) separately located sub-zones.
“Currently, 46 participants are registered in the FEZ, of which 18 projects have been implemented, 28 projects are at the implementation stage. The total volume of investments in the territory of the FEZ is 263.5 billion tenge, including the volume of foreign investment - 168.1 billion tenge, the volume of production - 402.6 billion tenge," Kabashev informed.
At the same time, according to him, 1,767 jobs were created, the amount of tax payments was 53.7 billion tenge, and the volume of exports was 2.63 billion tenge. With budgetary funds invested in the construction of FEZ infrastructure in the amount of 7.8 billion tenge, 33.4 tenge of private investment was attracted for 1 tenge of budget investments, 6.8 tenge of tax deductions were paid.
“Investors from 6 countries of the world, including China, Great Britain, Azerbaijan, Singapore, Turkey, Germany, have invested in projects on the territory of the SEZ,” said Kabashev.
According to him, the activities of FEZ participants are carried out within the framework of 25 priority activities. The main areas are the manufacturing industry (production of materials, machinery and equipment for the oil, petrochemical, construction industries), warehousing and logistics, tourism development.
A number of important and strategic projects have been implemented and are operating, including a plant for the production of large diameter steel pipes - ArcellorMittal Tubular Products Aktau JSC (project cost - 6.9 billion tenge); a plant for cutting pipes with a gas-tight premium class connection - Kazakhstan Pipe Threads LLP (Kazakhstan Pipe Traders) (project cost - 16.1 billion tenge); project to expand the Aktau International Sea Trade Port in the northern direction - Aktau Sea Northern Terminal LLP (project cost - 44.3 billion tenge).
“In 2016, a large logistics center of Azersun Production and Logistics Center LLP was put into operation (the cost of the project is 4.6 billion tenge). Since 2020, a stabilization fund has been created on the basis of the center for the storage of socially significant food products,” Kabashev informed.
Also, according to him, the tourism sector is actively developing. Currently, 4 companies are registered as participants in the SEZ to implement 6 projects in the field of tourism with a total project value of 261.8 billion tenge and the creation of 1,000 jobs. Of these, one of the major projects worth 66.5 billion tenge is the multifunctional hotel complex Rixos Water World Aktau, commissioned in 2020 by SEZ participant Sembol Construction and Engineering LLP.
As part of the further development of the SEZ, it is planned to implement measures to increase the transport and logistics potential of the region. For these purposes, the issue of registration as participants in the SEZ of the Aktau Commercial Sea Port and the Port of Kuryk is being considered.
“Thus, the functioning of the SEZ in the region brings a tangible socio-economic effect and is a comfortable platform for attracting investments to the region,” summed up Kabashev.