Industrial upgrade, investment inflow, innovation boom, or how an industrial breakthrough occurred in Kazakhstan

At the beginning of its independent formation, Kazakhstan took a course towards general industrialization. A special direction of development was the manufacturing industry, which subsequently will become the main driver of the country's industry growth. During the years of industrialization, thousands of new modern high-tech industries were created, which ensured the release of hundreds of types of new products and contributed to the creation of thousands of jobs.

Industrialization in 2010 and now: where it all began

Under the program of the first five-year industrialization plan (2010-2014), the state targeted all major sectors of the economy, including industry, agriculture and the services sector. At that time, the goal of the program was to make the economy more stable in times of crisis in the world.

Over the years, most infrastructure issues have been resolved: about 4 thousand km of roads (Western Europe - Western China, 2 transit corridors Center-South and Center-East) were built and reconstructed, and about 1,700 km of railways were built (Uzen-state the border with Turkmenistan, Zhetygen – Korgas, Beineu-Zhezkazgan, Arkalyk-Shubarkul), 13 special economic zones and 23 industrial zones began to function.

To support the business, the following programs were adopted: “Productivity 2020”, “Investor 2020”, “Business Roadmap 2020”. Dozens of new support tools have been developed and launched - soft loans and leasing, innovative, export grants, service support, etc. Currently, about 100 support tools are available to private entrepreneurs.

The second five-year plan of the state program of industrial and innovative development for 2015-2019

The second “five-year plan” (2015-2019) was focused on the manufacturing industry specifically, as the sector that is most resistant to external economic shocks and has the potential to become a “safety cushion” for the Kazakhstani economy.

The range of exported manufacturing goods increased by 21%. New export products have appeared such as batteries, flat-rolled products from iron or non-alloy steel, non-alloy aluminum wire, etc.

Today, the implementation of the State program of industrial and innovative development for 2015–2019. is under special control of the Government. It was in 2015 that the implementation of the SPIID began, which became a logical continuation of the first five-year period of industrialization and part of the country's economic policy. The main goal of the program is to stimulate the competitiveness of the manufacturing industry, increase labor productivity and increase exports of processed goods.

The most significant projects of the second five-year industrialization period:

  • construction of the Bozshakol GOK “KAZ Minerals Bozshakol LLP”;
  • construction of a rail and girder plant, “Aktobe Rail and Gully Plant” LLP;
  • reconstruction and modernization of the Atyrau refinery of JSC “NC“ KazMunayGas ”;
  • expansion of the Aktau International Sea Trade Port of “AMST” LLP;
  • modernization and reconstruction of the Shymkent oil refinery of Petro Kazakhstan Oil Products LLP (stage 1);
  • construction of the Aktogay GOK LLP "KAZ Minerals Aktogay"
  • modernization of the Pavlodar refinery “Pavlodar Petrochemical Plant” LLP;
  • modernization and reconstruction of the Shymkent Oil Refinery of “Petro Kazakhstan Oil Products” LLP (2nd stage);
  • construction of a mining and processing complex with a capacity of 2 million tons of ore per year, “BGP” LLP;
  • a complex for the production of wheels for railway use, “Prommashkomplekt” LLP.

From 2015 to November 2019, the volume of production in the manufacturing industry amounted to 42.9 trillion tenge.

The mining and metallurgical complex forms about 6.7% of GDP, 23.3% of industrial production. Over the years of the second five-year period in metallurgy, the volume of output increased by 2.2 times (from 2.1 trillion tenge in 2014 to 4.6 trillion tenge in 2018, according to the results of 10 months of 2019 - 4 trillion tenge).

Implement Industry 4.0

The Ministry, in the framework of industrial digitalization and implementation of industry 4.0 technologies, is working in two directions: the implementation of the Model Digital Factories project and the backbone companies of the mining and metallurgical complex.

In the direction of Model Digital Factories, the selected enterprises initiated the implementation of 51 projects with an investment volume of 13.61 billion tenge, of which 12 projects were completed in 2018-2019, with an investment volume of 2.8 billion tenge.

So, “Khimfarm” JSC (Shymkent) implements 6 projects, “Eurasian Foods” JSC (Karaganda region) initiated 7 projects to transfer production to Industry 4.0, “Altynalmas” JSC (Karaganda region) implements 15 subprojects under the Digital mine".

As part of the digitalization of the mining and metallurgical complex, 53 projects are being implemented; as of November 15, 2019, 22 projects were commissioned.

“ArcelorMittal Temirtau” JSC initiated the implementation of 3 projects. This year the project was completed - tracking and accounting of coal from the mine to the consumer using the Coal Tracking System, the effect is the reduction of coal losses.

“Kazakhmys Corporation” LLP is implementing 4 projects. In May 2019, the company commissioned telecommunications infrastructure as part of the project “Personnel and Transport Positioning System at 67 Mine”. The system reflects all technological processes in real time, this has increased the safety of mining, eliminated equipment downtime.

The company JSC “Varvarinskoye” implements 6 projects until 2021. In 2018, it completed the implementation of two projects at the gold mining and processing plant: updating the software for storing MDC data (Manufacturing Data Collection).

What did the new industrialization program for 2020-2025 prepare?

The purpose of the new state program is to ensure the competitiveness of manufacturing in the domestic and foreign markets. To achieve this goal, the following tasks:

  • increasing production and expanding the range of processed goods in demand in the domestic and foreign markets;
  • increase in industrial capacity by stimulating the development of basic industries and the implementation of strategic projects;
  • ensuring technological development and digitalization of manufacturing industries.

It is worth noting that, taking into account the experience of the two five-year SPIID, new approaches have been developed that contribute to the further development of industrialization in the country.

First of all, the emphasis will be placed on efficient enterprises in the manufacturing sector, focused on saturating the domestic market with quality products and exporting. It will also be important to move from disparate instruments of state support to a system of comprehensive development stimulation in exchange for counter obligations and business responsibility. In addition, it is necessary to take into account the transition from the industry principle to the identification of specific priority goods, as well as the emphasis on proactive integration into global value chains.

20-02-2020 10:30