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Industry

Mechanical engineering

The volume of engineering market is $ 14.7 billion, of which 80-85% is import.
  • Zhezkazgan copper plant
  • Kazakh electrolytic plant
  • Karaganda Electromash
  • Production of oil and gas equipment
  • Production of mining equipment
  • Production of mobile drilling rigs
  • Production of transformers
  • Production of combines
  • Production of tractors
  • Automobile production
  • Production of lead batteries
  • Production of cabling and wiring products
  • Production of locomotives
  • Production of passenger cars
  • Casting and mechanical and engineering plants
  • Machinery and repair plant
Engineering is one of the most prospective sectors of the Kazakhstan economy
The volume of the machine-building market for 2010-2017 million dollars USA
There is a significant import substitution potential in the engineering market, whose share during the last five years has been confidently at the level of 80-85%
Main importing countries
Percent
  • Russia
  • China
  • USA
  • Germany
  • Italy
  • Other countries
Attractive cost of the main factors of production
Main factors of production
  • Russia
  • South Korea
  • Malaysia
  • Kazakhstan
  • China
  • Poland
  • Germany
  • Turkey
  • Water, cents per cubic meter
  • Russia
  • South Korea
  • Malaysia
  • Kazakhstan
  • China
  • Poland
  • Germany
  • Turkey
  • Gas, cents per cubic meter
  • Russia
  • South Korea
  • Malaysia
  • Kazakhstan
  • China
  • Poland
  • Germany
  • Turkey
  • Electricity, Cents per kilowatt hour
  • Russia
  • South Korea
  • Malaysia
  • Kazakhstan
  • China
  • Poland
  • Germany
  • Turkey
  • Wages in the processing industry, USD per hour
  • Russia
  • South Korea
  • Malaysia
  • Kazakhstan
  • China
  • Poland
  • Germany
  • Turkey
Source: the Financial Times Limited 2016 (latest available information), expert evaluation
Availability of qualified specialists
In 2014, 88 thousand people were employed in the engineering sector. In Kazakhstan there is a “Bolashak” scholarship of the President of the Republic of Kazakhstan for training students in 200 best universities in the world
9thousand graduates

Graduates of technical fields (electrical engineer, mechanical engineer, others)

Priority subsectors for investments
Electrical equipment
Cables
Agricultural Equipment
Mining and oil production equipment
Agricultural Equipment
Dynamically growing market of agricultural equipment in the Republic of Kazakhstan, million USD
Average annual rate of growth:
Fact: -1,2%
Forecast
Average annual import share: 76%
The need for agricultural machinery in the Republic of Kazakhstan (2017-2019), units
Tractors
Harvester
Regulatory: -1,2%
Actual: -1,2%
Local production: -1,2%
Wear of agricultural equipment in the Republic of Kazakhstan, % (2016)
Tractors 154 162 units
Combine 46 573 units
New technology
Old technique
Lack of substantial competition from the part of local producers
  • C urrently, only assembling production exists in the Republic of Kazakhstan;
  • In 2016, the total design capacity of five monthly producers was 2100 tractors and 900 combines per year.
State support for agriculture:
  • Subsiding of interest rates on agricultural equipment leasing and credit provision for agriculture
  • Providing access for the agricultural producers to the finance, technology and technological equipment on a leasing basis
  • Providing comprehensive support to export-oriented enterprises of non-resource-based sector of the economy
  • Reimbursement of costs associated with the promotion of products for export, trade finance and insurance (up to 50%)
Tractors

Production of tractors, oriented on import substitution in the domestic market of Kazakhstan, and export to the Russian Federation

Key drivers
  • The planned increase in agricultural land in Kazakhstan and the consolidation of agricultural producers
  • High need of updating the agricultural machinery fleet (wear more than 80%)
  • State support for agricultural producers when buying new equipment
  • Duty-free access to the large market of the Russian Federation
Cables

Production of a wide range of electrical cables, oriented on import substitution in the domestic market of Kazakhstan

Key drivers
  • High need of upgrading worn equipment for power transmission
  • Planned investments in the modernization of the electricity industry
  • The lack of production facilities of international players in the market of Kazakhstan
Expected investment
current market
The volume of the market Percentage
  • Import
  • Local production

Main importing countries are Russia, China

~450 million $ The volume of the market of cabling and wiring products is

Market potential by 2020
Due to the consideration of the need of upgrading power transmission lines, by 2020 the expected volume of the market of cabling and wiring products will amount about $ 500 million

Expected investment
Investments in the renewal, modernization and construction of electrical grids from 2016 to 2030 are estimated at $ 11 billion, including: main grids - $ 3.5 billion, transmission grids - $ 7.5 billion. The total length of overhead power transmission line is - 25 thousand kilometers
Planned decrease of wearing of equipment for transmission and distribution of electricity
  • requires replacement

  • does not require replacement
Prospects for the development of mining and oil production equipment:
Availability of large metals resource base, which contributes to the cheaper production of basic components of oil production equipment - spare parts and complete units.
An important factor is the relatively cheap cost of electricity.
Projects on expanding current oil fields will increase the need for oil production equipment:
  • Expansion of Tengiz field during the period of 2017-2021, - $ 37-40 billion investment
  • Expansion of Karachakanakskoye field, - 4.5 billion USD of investment
In the unfavorable market conditions of the oil and mining industries, companies reduce the cost of purchasing new equipment and concentrates on increasing the efficiency and repair of working equipment, which is a favorable factor for the development of engineering maintenance service.
Dynamics of growing mining and oil production equipment market in the Republic of Kazakhstan. million USD
Average annual rate of growth:
Fact: -3,7%
Forecast: 7,7%
Average annual import share: 65%
Power equipment
Dynamically growing market of power-generating equipment in Kazakhstan, $ million
Average annual rate of growth:
Fact: -4,6%
Forecast: 7,7%
Average annual import share: 51%
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