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Automotive industry demonstrates highest growth dynamics among engineering industries — Ministry of Industry and Infrastructure Development

Friday, 19 June 2020, 10:43:44

At the government session chaired by Prime Minister Askar Mamin, the Minister of Industry and Infrastructure Development Beibut Atamkulov reported on the development of the engineering industry.

As Atamkulov noted, automotive production is one of the fastest growing industries within engineering.

Over the years of the industrial program (over 10 years) in the industry:

  • The volume of production increased 5 times.
  • Investments increased 3 times and amounted to 50 billion tenge.
  • Export volume grew almost 3 times and amounted to $1.1 billion.

At the end of 2019, products worth 1 trillion 372 billion tenge were produced. For 5 months of 2020, products worth 535 billion tenge were produced, which. Is an increase of 18.5%.

Today, about 3 thousand enterprises work in the industry, with 65 thousand people involved.

“Over the years the industrialization program has been implemented, 128 projects have been implemented in the amount of about 367 billion tenge, about 16 thousand jobs have been created,” Atamkulov said.

At the end of 2019, labor productivity amounted to $16 thousand. The range of exported products was expanded.

Now Kazakhstani enterprises are exporting to such countries as: Russia, China, Azerbaijan, Tajikistan, the United Arab Emirates, Turkmenistan and others. The production of new types of engineering products has been organized — passenger cars, electric locomotives, railway wheels and axles, turnouts.

Asia Trafo JSC was the first in the CIS countries to launch the production of super-powerful transformers with a capacity of up to 500 MVA (mega volt amperes).

The highest growth dynamics among the engineering industries is demonstrated by the automotive industry.

Production grew 24.5 times, the annual influx of investments grew 14.4 times. Products of the Kazakh automobile industry entered export markets. At the same time, inside the country, every second new passenger car sold is domestic.

Key enterprises in the sector: SaryarkaAutoprom, HyundaiTransAvto, Asia Auto, KAMAZ-Engineering, SemAZ and DeuBasKazakhstan.

“In January-May 2020, 26 thousand 810 cars were produced for a total of 173 billion tenge, an increase of 47%. During the same period, 1 thousand 659 cars were exported to Russia, Belarus, Kyrgyzstan, Tajikistan and Uzbekistan,” Atamkulov informed.

A HyundaiTransKazakhstan passenger car factory was built in Almaty with a capacity of 45 thousand passenger cars per year. The first phase was successfully launched in March 2020. Due to technological operations on welding and body painting, small-site assembly of cars will be carried out.

SaryarkaAutoprom, in cooperation with the Uzbek auto industry, is implementing a number of significant investment projects, such as the joint production of export-oriented cars Ravon and Chevrolet.

The projects implemented in the city of Saran, Karaganda region:

  • Production of Yutong buses by Kaztechna together with a Chinese company;
  • Tire production with a capacity of 3 million tires for passenger cars and 500 thousand tires for commercial vehicles and buses by Kaztairteh together with Doublestar.
  • foundry factories and final drive gearboxes of the truck’s drive axles are built by KAMAZ PJSC.

Achievements in agricultural engineering for 10 years:

  • 5 times production growth;
  • investment growth of 3.4 times;
  • average level of product localization is 37%.

For 5 months of 2020, agricultural equipment worth 12 billion 46 million tenge was produced, including 825 tractors, 139 combines, an increase of 54%.

The main players in the sector are such enterprises as Agromashholding (production of Esil combine harvesters and Lovol tractors), SemAZ and Composite Group Kazakhstan (production of Belarus brand tractors), Kostanay tractor plant (assembly of Kirovets tractors), Kazakhstan Agro-Innovation Corporation (production of Belarus tractors, Buhler, combine harvesters AKROS, TORUM, sowing complexes AMITI and other equipment), as well as the company Don Mar (reapers and sowing complexes).

Today, about 153 thousand tractors and 42 thousand combines are registered in the country. 65% of tractors and 46% of combines have been in operation for over 17 years.

As Atamkulov noted, in order to update the outdated agricultural machinery park, work is underway to create its own modern production of agricultural machinery and equipment, which will increase labor productivity in agriculture and increase productivity.

“We are taking measures to harmonize state support. We believe that the successful experience of introducing recycling incentives in the automotive industry should be extended to agricultural machinery. To stimulate the production of agricultural machinery, a program was launched to sell domestic tractors and combines on a lease basis,” the minister said.

The plans of Kazakhstani producers include expanding production and product lines, exporting, as well as mastering the production of spare parts and components.

In May 2019, Agromashhoding KZ joint-stock company, together with the largest Chinese corporation, launched the production of Lovol tractors.

In October 2019, the Kostanay Tractor Plant for the assembly of tractors Kirovets was launched, with a capacity of up to 700 tractors per year. Investments amounted to 7.3 billion tenge.

Kazrostengineering LTD invested in an idle Vector plant and resumed production of combines in cooperation with Rostselmash. Total investments amounted to 7.5 billion tenge. The plant plans to collect up to 800 units of Vector and AKROS combine harvesters per year.

Industrialization has allowed in railway engineering to increase production volumes by 3.8 times due to the localization of new high-tech products for the country, such as diesel locomotives, electric locomotives, railway axles and wheels. The largest world leaders in the railway engineering industry were involved — Alstom, General Electric, Transmashholding.

For 5 months of 2020, products worth 56 billion tenge were produced. The average localization level is over 50%.

Within the framework of the industrialization program, the Tulpar Carriage Building Plant, Lokomotiv Kaurastyra Zauyty, Electric Locomotive Kurastyra Zauyty and Prommashkomplekt, which produce high-tech, export-oriented products, were launched.

Prommashkomplekt was the first enterprise in the post-Soviet space to introduce a modern automated technological complex for the production of solid-rolled wheels for the railway. The capacity of the enterprise is 200 thousand wheels per year. The localization level is 68%. The company's products completely cover the needs of the domestic market and more than 60% are exported to Iran, Azerbaijan, Russia and Turkmenistan.

In January-May of this year, 71 thousand 325 wheels were produced in the amount of 16 billion 346 million tenge.

The ZIKSTO enterprise in Petropavlovsk resumed operations, which in April-May produced 171 platform cars worth 4 billion 929 million tenge.

In electrical engineering for 2010-2019, there was a 3-fold increase in production, and a 4-fold increase in exports. The average localization level reached 75%.

“In 2019 alone, 34 million m fiber optic cable worth 5 billion 400 million tenge and the production of other electric wires and cables 1 billion 220 million m worth 40 billion tenge were produced,”  Atamkulov noted.

The volume of production of electrical engineering in January-May 2020 amounted to 52 billion tenge.

The key enterprises of electrical engineering are: Kainar-AKB, Kentau Transformer Plant, Saiman Corporation, Kazenergokabel, EvrazKabel, Kazcentrelectroprovod.

Kainar-AKB batteries are exported to Russia, Belarus, Uzbekistan, Kyrgyzstan, Tajikistan, Germany, China.

Transformers of the Kentau Transformer Plant are exported to Russia, Kyrgyzstan, Tajikistan, and Turkmenistan.

Alageum Electric is building an electrical plant in the special economic zone of Petropavlovsk, whose products will be export-oriented.

Significant results have been achieved in mining engineering over the years of industrialization - production has grown 1.7 times, exports 1.8 times.

The following types of products were mastered: full-rotary machines, self-propelled drilling rigs, mine trolleys, crushing and grinding equipment, and the production of spare parts for machinery and equipment for mining (Maker LLP) was established.

In mining engineering for 5 months of 2020, products worth 8 billion tenge were produced.

The key enterprises of mining engineering are the Almaty Heavy Engineering Plant, the Karaganda Foundry and Mechanical Plant, Kazzinkmash, Kurylysmet, and the Karaganda Engineering Plant named after Parkhomenko, KazKarbon.

As part of the transformation of production processes and adaptation to new realities, one of the first enterprises in the country that introduced elements of Industry 4.0 was Maker LLP in Karaganda.

In the oil and gas engineering industry, industrialization allowed to increase production volumes by 4.2 times, exports by 1.1 times. Major global players were attracted, such as the German leader in the production of stop valves — Bemer Armaturen, the Canadian leading manufacturer of full-compact screw pump systems — Kudu Industries.

The following types of products were developed, such as valves, power plants, gas filtering equipment, pumping equipment, etc. The volume of production in January-April 2020 amounted to 21 billion tenge.

The key enterprises in the sector are Ust-Kamenogorsk Valve Plant, Karlskrona, Petropavlovsk Heavy Engineering Plant, Munaymash, Belkamit, Atyrauneftemash.

In the field of oil and gas, domestic oil and gas engineering enterprises are already assisting in obtaining recognized international certificates for standards such as ISO, API, OHSAS.

Supporting domestic automakers

As part of supporting domestic automakers, there is a program of preferential car loans and preferential leasing, within which 50 billion tenge was allocated over 5 years of operation, which allowed domestic enterprises to sell 18 thousand vehicles worth 92 billion tenge.

Since last year, the National Bank launched a program of preferential car loans, which is in great demand among the population. For these purposes, 100 billion tenge was allocated for 5 years (annually 20 billion tenge).

To support the domestic production of engineering products with the Union of Mechanical Engineers of Kazakhstan, a Roadmap for the development of engineering for 2019-2024 has been developed and approved.

The roadmap provides for measures to support and develop the industry in terms of introducing tax preferences in exchange for counter obligations, on the development of the Law on Industrial Policy and the creation of the Industrial Development Fund.

Currently, a joint action program with the Russian Federation, a roadmap for the development of oil and gas engineering is underway.

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