Forum in Kyzylorda Focuses on Region’s Economic Potential

Investment forum BaikonurKYZYLORDA – The second “Baikonur” investment forum took place in mid-November in the Aral Sea region aimed at unlocking the Kyzylorda oblast’s significant potential in a variety of industries, including metallurgy, energy, transport logistics and agriculture.

The event was attended by Minister of Environment and Water Resources Nurlan Kapparov, representatives of other ministries and departments, international and national development institutions and heads of foreign diplomatic missions and business structures. By tradition, forum participants visited the Bastau business centre, where an exhibition of industrial and infrastructure projects implemented under the State Programme of Accelerated Industrial and Innovative Development (SPAIID) had been organised.

Along with already-commissioned industrial complexes, the region presented projects recently included in the Industrialisation Map. For example, the Balausa company has introduced a unique method of autoclave processing of black shale on the Bala Sauyskandyk deposit of vanadium ore. Investments in the project from 2013-2018 will reach nearly 35 billion tenge (about US$226.7 million). The new technology will allow the company to produce one quarter of the total world production of vanadium in 2020 and become a world leader.

In the near future, Samruk Kazyna Invest, with its Chinese partner, will build a plant in the city of Kyzylorda worth 18.8 billion tenge (US$121.7 million) to produce flat glass. The infrastructure for the future industrial giant, which is expected to fully meet the demand for construction glass in the domestic market and in neighbouring states, is now being created. In addition, this year construction is planned to begin on factories for producing cement and lime, plastic pipes and the semi-knocked down assembly of electro-loading units.

Projects contending for inclusion on the Industrialisation Map include Zhanakorgan Energy, which intends to build a solar power plant worth 14.4 billion tenge (US$93.2 million) with a capacity of 65 million kilowatt hours per year. The Ocean Energy Company is ready to invest 14.3 billion tenge (US$92.3 million) in a gas turbine power station with a capacity of 652.5 million kWh per year. Shalkiya Zinc, which in 2014 plans to resume work on Kazakhstan’s largest lead and zinc deposit, then significantly increase productivity and build a processing plant, also has a good chance to become part of the map, which brings with it measures of state support. Investment in this integrated development project is estimated at an enormous amount: 90 billion tenge (US$582.9 million).

Forum participants were interested in the concept of a metallurgical cluster and numerous projects for tourism development. The plenary and breakout sessions gave a clear signal to investors that the regional authorities are ready to provide comfortable conditions for the effective investment of capital and productive work.

Akim (Governor) of the Kyzylorda oblast Krymbek Kusherbayev noted the major efforts by the country to create a favourable investment climate. He emphasised the low tax burden on business, which in Kazakhstan is one of the lowest in the world, at about 29 percent, while in European and Central Asian countries it exceeds 40 percent.

The governor quoted the following facts about the region’s main socio-economic indicators: the region is a leader in attracting investment in the real economy. Actively developing infrastructure has spurred production growth, especially in the manufacturing industry, which is up 15 percent compared with 2012. Tax revenues have also increased significantly. The governor expressed concern, however, about the structure of the economy, in which the mining industry and the production of hydrocarbons and uranium dominate.

The region’s development priority, he stressed, is diversifying its economy, adding that in consultation with President Nursultan Nazarbayev, the region plans to create a number of metallurgical plants.

Having already developed deposits of uranium and vanadium, lead and zinc, copper, molybdenum, zirconium, titanium, germanium, silver, gold and other precious metals, opening refining enterprises seems logical and promising. Refining is a labour- and capital-intensive industry with high export potential. Kusherbayev expressed confidence that the creation of a metallurgical cluster could provide prosperity for the region in the future.

Another key theme of the report was the high industrial-innovative and tourist potential of the Baikonur space complex, which is included on the list of the sites to be visited during the EXPO 2017 international exhibition. The governor discussed the region’s many historical and cultural monuments, including ancient settlements. He also reported on the implementation of major transport infrastructure projects, including the intercontinental mega-corridor, the Western Europe-Western China highway, and the new Beyneu-Saksaulsk-Zheskazgan railway line. Much attention was paid to the development of basic agricultural industries like rice farming, fishery and cattle breeding.

Participants also showed great interest in Kapparov’s report. The minister presented the Concept of Kazakhstan’s Transition to a Green Economy and its main directions. He paid special attention to the country’s water security, which is relatively stable today but is expected to reach a deficit of 14 billion cubic metres by 2030. To avert a crisis, water-saving technologies are to be introduced, agricultural crops diversified and water used more efficiently in industry and public utilities. The share of electric power generated by alternative and renewable energy sources in the concept is planned to increase by 2030 up to 30 percent and reach 50 percent by 2050. The green economy is expected to contribute to the emergence of new industries, create 500,000 jobs and generally improve the nation’s quality of life.

Kapparov praised the efforts of local executive bodies to ensure the region’s energy independence and promised the support of the ministry, taking into account the big plans for industrial-innovative development in the energy-deficient southern region.

Forum sessions were also devoted to such topical issues as the prospects of metallurgical and machine-building clusters, the transit potential of the region, the development of the rice industry and cattle breeding.

Following the forum, a number of memoranda of cooperation in various fields were signed between companies, institutes of development and the executive bodies of the oblast.