Kazakhstan's Manufacturing Sector Grows to $48.7 Billion in 2023

Kazakhstan's manufacturing sector experienced significant growth in 2023, with production value reaching $48.7 billion, driven by increases in woodworking, mechanical engineering, light industry, and construction. Minister of Industry and Construction Kanat Sharlapayev announced these developments at a government meeting in Astana on April 29, 2024.

According to Sharlapayev, the manufacturing sector's production value reached 21.6 trillion tenge ($48.7 billion) in 2023. The growth was primarily attributed to increases in the woodworking (38%), mechanical engineering (25.4%), light industry (12.2%), and construction (6.1%) sectors. Investments in fixed capital also grew by 11.2%, totaling 1.7 trillion tenge ($3.8 billion), while exports of manufactured goods amounted to $25.3 billion.

The government's industrial policy, enacted in 2021, aims to shift the focus from raw materials to domestic processing. An updated concept for the development of the manufacturing industry for 2024-2028 has been adopted to further support this goal. The minister highlighted several investment projects, including agreements with German, British, and American companies, as well as plans for the rare and rare earth metals industry, the mechanical engineering sector, the automotive industry, and the light industry. A total of 180 projects valued at 1.5 trillion tenge ($3.3 billion) are planned for the current year, with an additional 621 projects worth 4.86 trillion tenge ($10.9 billion) scheduled from 2025 to 2027.

Why this matters: Kazakhstan's manufacturing sector growth demonstrates the country's efforts to diversify its economy and reduce its reliance on raw materials. The government's industrial policies and investment projects aim to attract foreign investment and promote domestic processing, which could lead to job creation and increased economic stability.

Sharlapayev also emphasized the domestic automakers' commitment to increasing the share of CKD (Completely Knocked Down) production to 50% by 2027, with plans to reach 20% this year, 30% next year, and 40% by 2026. Additionally, the minister announced the launch of a project to build a multi-brand plant for the production of Chinese cars, with a capacity of 90,000 cars per year and an estimated cost of 182 billion tenge. The new plant is expected to produce around 200,000 cars using the SKD (Semi Knocked Down) method by 2027. Furthermore, the Astana Motors group of companies has attracted well-known Chinese brands, such as Changan, Cherry, and Haval, to organize a production line, which is scheduled to be launched by 2025.

The growth in Kazakhstan's manufacturing sector in 2023, as reported by Minister Kanat Sharlapayev, showcases the country's commitment to diversifying its economy and promoting domestic processing. With significant investments in various industries and the government's supportive policies, Kazakhstan aims to attract foreign investment and create new opportunities for growth and development in the coming years.

Key Takeaways

• Kazakhstan's manufacturing sector grew 21.6% in 2023, reaching $48.7B.
• Growth driven by woodworking, mechanical engineering, light industry, construction.
• Govt aims to shift focus from raw materials to domestic processing.
• 180 projects worth $3.3B planned for 2024, 621 projects worth $10.9B from 2025-2027.
• Domestic automakers to increase CKD production to 50% by 2027, new plant for Chinese cars.