2022 annual review of Kazakhstan’s industrial sector’s development

Kazakhstan Materials 14 January 2023 07:47 (UTC +04:00)
2022 annual review of Kazakhstan’s industrial sector’s development
Emin Sevdimaliyev
Emin Sevdimaliyev
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BAKU, Azerbaijan, January 14. In 2022 Kazakhstan continued bolstering the development of its industrial sector, Trend reports.

Below are some of the most noteworthy developments in several industrial fields, which have taken place in the past 12 months.

ICT industry development

Kazakhstan has outlined intention to become the major 5G nation by revealing that the country will construct around 7,000 towers to provide the next generation network coverage.

General Director of "Mobile Telecom Service" LLP Sergey Konkov revealed that the introduction of this technology will enable Kazakhstan to become the first country in Central Asia and CIS in terms of 5G development.

The bidding for 3600-3700 MHz and 3700-3800 MHz radio frequency waves was carried out. The total price of the purchase amounted to 156.6 billion Kazakh tenge ($336.9 million). The winners of the auction, Kcell and Tele2/Altel, will commence the construction of the towers. It is expected that the infrastructure will be commissioned by 2025.

Askhat Orazbek, the Deputy Minister of Digital Development, Innovations and Aerospace Industry of Kazakhstan said that the introduction of 5G networks will increase the speed of data transfer, enabling businesses to increase their operation pace. He added that 5G technology will contribute the smart city concept implementation and the operations involving drones.

Currently, Kazakhstan already outpaces Central Asian countries, Russia and some other CIS countries in terms of mobile internet speed. The median speed of mobile internet in Kazakhstan reached 22.6 Mbps in September 2022, which is 14.5 percent more than in the same month the previous year.

For comparison: in Russia, this figure amounted to 21.4 Mbps. Among the Central Asian countries in terms of mobile internet speed Kazakhstan is followed by Kyrgyzstan (19.6 Mbps), then Uzbekistan (15.8 Mbps), then by a wide margin - Tajikistan (7.9 Mbps).

The introduction of the 5G coverage in Kazakhstan will enable the country to make dramatic improvements in the ratings and in the mobile internet speed experienced by users.

Last, but not least, Kazakhstan, together with Azerbaijan, aims to lay of an underwater fiber optic communication line (FOCL) in Caspian Sea in 2023, the Minister of Digital Development, Innovation and Aerospace Industry of Kazakhstan Bagdat Musin said earlier this year.

"The project will provide the regional countries with alternative internet access, as well as expand the Europe-Asia traffic. Kazakhtelecom will work in partnership with AzerTelecom LLC – from Azerbaijan," Musin said.

Chemical industry on the rise

Chemical industry was one of the areas of the biggest development during the year. In 2022 Kazakhstan agreed and started implementing numerous significant projects, which will boost the production output of the Central Asian nation.

Kazakhstan and Uzbekistan reached an agreement on the implementation of a mineral plant production facility project in the Navoiy Region of Uzbekistan.

Early estimates suggested the project to be worth around $1.3 billion. It is expected that the implementation of the project will create 150 workplaces in the region.

Kazakh "Kazphosphate" LLC and Uzbek "Uzkimyosanoat" JSC will participate in the implementation of the project. The first phase of the project encompasses the start of potassium nitrate (100,000 tons) and potassium sulfate (100,000 tons) production in Uzbek "Navoiazot JSC" before 2024. The second and third phases of the project will take place in Olmaliq and Fergana.

In late 2022, Kazakhstan attracted Chinese investments for the construction of a gas chemical plant in West-Kazakhstan region. Chinese CITIC Construction and China Huanqiu Contracting & Engineering will participate in the implementation of the project together with Kazakhstan’s Zhaik Petroleum LTD.

The plant will have an output of 130,000 tons of methanol per year. Some 500 workplaces will be created during the construction phase, and 220 permanent workplaces will be opened upon the completion of the project.

The facility is expected to be launched in late 2024. Upon completion, it is planned to implement the second stage of the project for the production of ammonia and carbamide, the cost of which will be $200 million.

Further, a project for the construction of a plant producing chemical fiber from polyethylene terephthalate waste, worth $20 million, was launched on the territory of the Badam industrial zone in Kazakhstan’s Turkestan region.

The total maximum annual volume of production of the plant will be 50,000 tons of finished products. Around 100 workplaces are expected to be opened upon the completion of the project.

Company officials revealed that several export agreements are already in place, and 90 percent of production is expected to be sold abroad. The production of plant will be used as sintepon for bedding, upholstered furniture, and clothes.

Also, this year, the "National Industrial Petrochemical Technopark" successfully finalized 4 projects. Additional 22 projects are being implemented; including the construction of an integrated gas chemical complex, plants for the manufacturing of plastic packaging products, polymer products and others. Within the above projects worth 757.7 billion tenge ($1.61 billion) 4,829 jobs were opened.

Mining and metallurgy industry

The Head of Aktobe region signed Memorandums of Understanding with a group of foreign investors, including the Eurasian Resource Group (ERG), as well as business representative from Türkiye, Germany, Lithuania and other countries. The MoUs outline intentions of investors to allocate a total of 2.7 trillion Kazakh tenge ($5.7 billion) for the region's mining sector.

The most significant 4 projects will be carried out by the ERG, which will be completed by 2025. ERG will commission the second stage of the "10th Anniversary of Independence of Kazakhstan" mine, which will create up to 1,000 jobs. Upon the completion of the project, chrome ore output will reach 7.5 million tons per annum.

In 2023, a factory for processing stale and current chromium-containing sludge with the production of chromium-containing concentrate will be put into operation in the region. The project will create 270 permanent workplaces.

Kazakhstan will also implement the construction of new plants on the territory of Saran Industrial zone in Karaganda region in 2023. Director of the Saran industrial zone management department director Zhaksylyk Akhmetbekov said that active work on attracting investors to the Saran industrial zone is underway.

"The Regional Coordination Committee approved three new projects. The projects are on construction of a plant for the production of galvanized coiled steel with polymer coating, a production of steel longitudinal electric-welded pipes and a hot-dip galvanizing plant. These projects are high-tech, where modern achievements will be applied in the metallurgical industry. All products planned for manufacturing are focused on import substitution and export," he said.

According to Akhmetbekov, land plots have been provided for the construction of production facilities.

Renewable energy projects

Kazakhstan has launched of several projects aimed at developing the "green energy" industry.

For example, Kazakhstan and Kyrgyzstan launched the construction of a joint solar power production enterprise on Issyk Kul lake, worth around $35 million. In total, the parties plan to build several solar stations in Kyrgyzstan with a total capacity of 300 MW.

The agreement on the construction of a solar plant was signed between Kazakhstan’s "TGS-Energy" investment company and TazaEnergy, a subsidiary of Kyrgyz "National Energy Holding Company" OJSC. Some 80 ha of land in the Toru-Aygyr village will be allocated for the project. The sides plan to complete the construction by December 2023. The solar plant is expected to remain in service for 25 years and will supply around 90 million kW/hour per annum.

A 153 MW "Chromtau-1" wind power plant will also be constructed and commissioned in the framework of the MoU signed between various investors and Aktobe region.

The implementation of the project will reduce the CO2 emissions into the atmosphere will be reduced by 520,000 tons per year. It is estimated that the construction phase will be launched in 2023.

Another potential major project is the Shokpar Wind Power Station in Sarysu district of Zhambyl region. European Bank for Reconstruction and Development (EBRD) is already considering allocating a loan of $50 million for the development, construction, and operation of a wind power plant with an installed capacity of 100MW. The London-based bank is expected to announce its decision on January 25, 2023.

Other important accomplishments

Overall, From January through September 2022 the industrial manufacturing in Kazakhstan increased by 2.1 percent compared to the reporting period of 2021.

Manufacturing of copper ore amounted to 99.8 million tons, which is 8.5 percent more compared to the reporting months of 2021. Manufacturing of petrol amounted to 3.7 million tons (increase of 5.7 percent compared to the same period of 2021).

Manufacturing of Portland cement stood at 9.7 million tons, which is 0.4 percent more than during the same period of 2021. Manufacturing of metal constructions was 58,000 tons (decrease by 8.1 percent), of electricity to 83.2 billion kWh (decrease by 1.2 percent).

The value of products manufactured in Kazakhstan stood at 35.9 trillion tenge ($75.3 billion) over nine months of 2022, of which 18.8 trillion tenge ($39.4 billion) accounted for the mining industry, and 15.2 trillion tenge ($31.9 billion) for manufacturing.

The industrial enterprises of the capital city Astana alone, from January through November 2022, produced goods worth 1.7 trillion Kazakh tenge (around $3.6 billion), while manufacturing industry production accounted for 1.5 trillion Kazakh tenge (nearly $3.2 billion).

Compared to 11M2021, this constitutes a 414.9 billion Kazakh tenge ($884.4 million) increase, which is an equivalent of 73.1 percent.