Pavlodar SEZ, Three New Chemical Companies to Further Kazakhstan 2050 Strategy

Cutout: Petrochemical cluster in region relies on foreign expertise and investments.

PAVLODAR – Nurlan Kapparov, head of Kazatomprom, the national atomic company, and Kanat Bozumbayev, Akim (Governor) of the Pavlodar region, held a meeting in late September with representatives of the German company SAS Chemieanlagenbau Chemnitz GmbH to discuss creation of new chemical productions in the territory of the region’s Special Economic Zone (SEZ).

preview-imageThese negotiations have gone unnoticed by the general public and yet they show that the Kazakhstan 2050 Strategy, which proclaimed the further industrialisation of the country, is working and foreign companies are attracted to its implementation.

An example of this is the Pavlodar SEZ created on Nov. 29, 2011 in accordance with a presidential decree, which not only takes on the responsibility of erecting new production facilities but has also released its first production. Similarly, many facilities are under construction. The purpose of creating the SEZ was multi-faceted, taking into account the internal and external interests of the state. This includes the development of chemical and petrochemical industries, in particular, production of export products with high-added value using modern technologies, and implementation of breakthrough investment, research, scientific and technological innovation projects within the development of priority sectors with high redistribution. Much attention is paid to the creation of a favourable investment climate and attracting domestic and foreign investments for the implementation of investment projects and integrated development of the chemical industry on the basis of public-private partnership.

Forty-five companies have already expressed their wish and registered for participation in such a programme. The total investment planned for the start of production is 341.2 billion tenge (US$1.9 billion) with the creation of more than 3,000 new jobs. Despite the absence of funds in 2012 and 2013 for the construction of infrastructure, three companies already operate in the SEZ and work on three productions will be completed this year. The current projects include the production workshop of inhibited hydrochloric acid (Caustic), production of household chemicals (Belizna-PV LLP) and start of the release of disinfectants (BO-NA LLP).

By the end of the year three more companies are expected to be introduced into operation – UPNK-PV LLP, the plant on the calcination of petroleum coke, AgroKhimProgress LLP, which will complete a project for the production of agrochemical products, and Khimsbyt-PV LLP, which will introduce the capacity to produce products like polyvinyl chloride, antifreeze and an inhibitor deposition of mineral salts and rooting system. The total investment for the above six projects is 39.9 billion tenge (US$219.4 million).

In addition to these projects, the basic enterprise of the “Pavlodar” SEZ, Caustic JSC, together with the Kazatomprom, plans to implement ten projects in 2015-2018, including the sulphuric acid plant.

A presentation of projects for the production of polyaluminium chloride and calcium chloride was held during the negotiations with the management of CAC Chemieanlagenbau Chemnitz GmbH. According to the German side, these reagents are less harmful to the human body compared to the chemicals used in Kazakhstan for the purification of drinking water and thawing roads in the winter. Polyaluminum chloride is a highly effective flocculant for water purification, which takes a large number of soluble particles in an insoluble form and derives turbidity from various types of solutions.

Calcium chloride is used in the preparation of solutions for well drilling, as well as for thawing and drying winter roads, and is also used as a fixant and reaction accelerator for concrete curing. These reagents are both currently being used in manufactured products and their need in future production will make them in demand in Kazakhstan and neighbouring countries. Therefore, the task is set to accelerate construction of the SEZ’s primary facilities. In the current year, 3.5 billion tenge (US$19.2 million) was allocated from the national budget for creation of infrastructure in the SEZ. These funds will be used for the construction of a customs terminal, electric supply and installation of fences within the SEZ, as well as for treatment facilities.

Currently, the construction of infrastructure facilities is being conducted according to schedule. Work on the second-floor masonry exterior walls was completed in the customs terminal, the installation of plates was done and partitions and walls with window units are being installed. Excavation and pipe fitting are carried out on the technical water supply and pneumatic tests were conducted. In addition, the SEZ territory fence is being mounted.

The works on supply and wastewater treatment plants of domestic wastewater will be completed in 2015. Work is currently underway on the installation of reinforced concrete poles and supports, the fence on the treatment plant construction site was installed and the top soil was truncated. According to the data at the beginning of October, 40.2 percent of the allocated 3.5 billion tenge (US$19.2 million) was spent.

The start of the SEZ is the beginning of a huge volume of production and the economic importance of a petrochemical cluster with high export potential. The neighbouring Pavlodar Petrochemical Plant will begin a large-scale reconstruction of the company, which in three years will produce high-production level Euro-4 standard gasoline and Euro-5 standard diesel.

The upgrading of the petrochemical plant will enable further processing of oil products and receipt of goods with high-added value.

Neftekhim LLP achieved significant results, which is also included in the SEZ petrochemical cluster. Today the Neftekhim, in technology partnership with Pavlodar Petrochemical Plant, produces methyl-tert-butyl ether (an additive for high octane gasoline), propylene and polypropylene, which are sold not only in Kazakhstan but in countries near and far. A workshop for production of flexible packaging made of polymeric material was launched.

In December, Petrochem LTD will launch the production of 47,807 tonnes of granulated polypropylene. This project will provide complete recycling of polypropylene powder in granular form, with its subsequent processing into finished plastic products, enhancing the country’s competitiveness in the international market.

The petrochemical SEZ is no single oasis of industrial breakthrough in the regional centre. Within the cluster development of the economy, the formation of an aluminum sub-zone has already begun. Aluminum from the Kazakhstan Electrolysis Plant JSC will be used to create new industries for high redistribution and this trend is also being implemented within the Kazakhstan 2050 Strategy.

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