Industry of Kazakhstan: fuel, chemical, coal, oil

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Kazakhstan is one of Russia's leading economic partners. Both states have close historical economic ties, which can be further strengthened by the further integration of states within the EAEU. Kazakhstan is the most important partner of the Russian Federation in terms of the exchange of industrial products. What are the specifics of the manufacturing sectors of the economy of the Republic of Kazakhstan?

Key industries of Kazakhstan

The industry of Kazakhstan is represented by several leading segments:

- coal industry;

- metallurgy;

- fuel and petrochemical industry;

- chemical industry;

- food industry;

- light industry;

- production of building materials.

Let's consider their specifics in more detail.

Coal industry

The coal industry of Kazakhstan is among the largest industries not only in Kazakhstan, but throughout the entire economic space of the EAEU. The country is among the leaders in terms of coal production per capita, as well as in terms of reserves. Its largest reserves are concentrated in Central Kazakhstan, as well as inNortheast of the state. A significant part of the coal is exported.

According to experts, the Republic of Kazakhstan is experiencing some shortage of coal, belonging to the category of high-quality coal, most often used in the municipal sector, as well as at enterprises that operate boilers of the corresponding type. To cover the needs of the country's economy in this type of coal, it is possible to expand production capacities in the corresponding segment. In particular, this may be an increase in the intensity of production in the Pavlodar region. The coals deposited here are characterized by a high degree of grade, they are easy to enrich, the costs of obtaining them from the bowels are relatively low.

Metallurgy

Non-ferrous metallurgy is among the leading industries in Kazakhstan. Kazakhstan produces excellent quality copper, zinc, titanium, various rare earth metals. Products can be issued in the form of rental. The Republic of Kazakhstan is among the world leaders in the production of copper, most of it is exported to Western Europe. Kazakhstan is a significant player in the world gold market. There are more than 170 deposits in the country.

The metallurgical industry of Kazakhstan is also developed in the segment of iron ore production. The Republic of Kazakhstan is among the world leaders in terms of the reserves of the corresponding breeds. At the same time, a significant part of the reserves is classified as easily accessible. The main volumes of iron ore mined in Kazakhstan are exported.

Metallurgy is among those branches of industry in the Republic of Kazakhstan, in which very close ties have been established with Russian enterprises. This is largely due to the fact thata significant part of the relevant communications was established under the USSR. Thus, an active exchange of raw materials, metal, and blanks was carried out between the enterprises of the Kazakhstan SSR and the RSFSR. In many areas, the relevant links are still active. There are all prospects for their further strengthening, given that Russia and Kazakhstan are now likely to be even more economically integrated within the EAEU.

Fuel and petrochemical industry

The oil industry of Kazakhstan is another important branch of the state's economy. Kazakhstan produces the widest range of products of the corresponding type - gasoline, diesel and boiler fuel, kerosene for aviation and many other types of petroleum products. This industry is adjacent to the developed petrochemical segment. The country produces various types of plastics, fibers, tires.

The peculiarity of the development of the oil industry in Kazakhstan is that it is an example of the successful integration of the state and private enterprises. The fuel industry in Kazakhstan is represented not only by large corporations, but also by small and medium enterprises. Numerous foreign investors also take an active part in the development of the oil industry of the Republic of Kazakhstan. The fuel industry of Kazakhstan remains attractive for businesses from Russia, other EAEU states, and Western countries.

Engineering

Engineering is an example of another significant industry in Kazakhstan. Stateproduces equipment for various purposes, machine tools, pumps. The enterprises of the machine-building industry of the Republic of Kazakhstan are actively interacting with foreign investors - Russian, Western, representatives of the EAEU states - in order to attract investments. Mechanical engineering in the Republic of Kazakhstan grew at a tangible pace in the mid-2000s, there was some decline during the crisis of 2008-2009. But the difficulties were overcome, and now the relevant industry is among the stable segments of the state economy.

Engineering in the Republic of Kazakhstan is an industry that has significant prospects due to the presence of sufficiently large capacities - since the times of the USSR, which are not properly involved. Now the share of the relevant industry in the economy of Kazakhstan is small, it is several times inferior, in particular, to Russian indicators. However, subject to successful attraction of investments, a significant increase in the dynamics of the output of machine-building products by Kazakh enterprises is possible.

Production of building materials

Production of building materials is another example of a successful industry, which is represented by the industry of Kazakhstan. The state produces cement, pipes, slate, linoleum, various panels, ceramics and other types of products. The main volume of building materials is produced by enterprises of the Republic of Kazakhstan at the expense of the national resource base.

Production of building materials in Kazakhstan is among the most dynamic industries. So, from 2008 to 2013, the production of the corresponding typeproduction in Kazakhstan, according to some data, doubled. In turn, the dependence of Kazakhstani companies on imports has decreased. The government and business have set new benchmarks for the further development of the industry. It is expected that within the framework of existing innovation programs, support will be provided to the leading enterprises of the segment.

Chemical industry

The chemical industry of Kazakhstan is also significant for the economy of the state. Among its leading segments is the production of phosphorus. According to some estimates, Kazakhstan is among the leaders of the CIS market in terms of its issue. Also, large enterprises engaged in the production of chromium compounds and paint and varnish products operate in the country.

The structure of exports of chemical enterprises of the Republic of Kazakhstan is such that it is dominated by products of inorganic chemistry, characterized by low rates of technological limit. Kazakhstan also remains heavily dependent on imports of chemical products. In turn, it is dominated by high-tech products - fertilizers, detergents, plastics. Thus, the chemical industry of Kazakhstan has significant potential for modernization. In particular, in the aspect of import substitution.

Food industry

The food industry in Kazakhstan is one of the most dynamic segments of the country's economy. The predominant share in the structure of the relevant industry belongs to the processing of grain, the production of milk, bread, meat processing, the cultivation of fruits and vegetables, and the activities of oil and fat enterprises. Significant needs of the Republic of Kazakhstan infood imports. This may predetermine the prospects for further growth of the corresponding segment as an import substitution tool.

The government of the country also plays a significant role in the development of the food industry in Kazakhstan. Thus, the authorities of Kazakhstan have developed large-scale programs to support national producers. This is mainly subsidizing, reducing interest rates on corporate loans, and assisting in the acquisition of fixed assets. It is expected that in the process of implementing the relevant initiative, government agencies will invest several trillion tenge in support of businesses. It is also expected to adjust a number of provisions of tax legislation in order to optimize the interaction between food industry enterprises and the state in terms of budget allocations.

Light industry

Kazakhstan's light industry is also developed. It is mainly represented by enterprises operating in the cotton segment. Studies show that the needs of the domestic market of the Republic of Kazakhstan far exceed the current dynamics of the output of light industry goods. About 90% of the relevant products in Kazakhstan are of imported origin. At the same time, in order to solve the problems of import substitution, it is necessary, as economists note, to ensure the highest level of competitiveness of the industry. There are certainly resources for this. The fact is that the light industry of the Republic of Kazakhstan is characterized by a high level of equipment with modern equipment, which is supplied by leading world brands, while in many other segmentsindustry, the depreciation of the corresponding funds is quite large.

The noted problem that characterizes some of the manufacturing segments of the economy of the Republic of Kazakhstan, however, does not go unnoticed by the government and business, it is being solved - along with other difficulties that characterize the industry of Kazakhstan.

Let's consider this aspect, as well as the prospects for further development of the manufacturing sectors of the Republic of Kazakhstan.

Problems and prospects of the industry of the Republic of Kazakhstan

We noted above that the industry of Kazakhstan in many segments is characterized by a rather high level of depreciation of funds. This problem is recognized by the business community and the state, and measures are being developed to effectively resolve it. Another difficulty that characterizes the production sectors of the Republic of Kazakhstan is the relatively low capacity utilization. This primarily affects labor productivity. The overall level of manufacturability of industrial enterprises of the Republic of Kazakhstan is estimated as inferior to advanced production in Western countries.

The identified problems are planned to be addressed through a number of large-scale initiatives, such as, for example, the government's Productivity 2020 program. It is aimed at both supporting existing businesses and opening new industries. Through this program, companies representing various industries in Kazakhstan can benefit from state support. To do this, they need to show that, firstly, they have a development strategy, and secondly, they have the desire and resources that can ensure that their activities are in line with statethe tasks of modernizing the economy.

Tasks for the development of the industry of the Republic of Kazakhstan

The Government of the Republic of Kazakhstan faces a number of urgent tasks, without which it is not easy to implement the effective development of industry in Kazakhstan. Let's study their specifics.

First of all, the government should form a long-term policy in the field of industry, which should be based on the initiatives of not only authorities, but also business and academia. This area of activity should be aimed at the structural modernization of manufacturing enterprises operating in the Republic of Kazakhstan.

Another important aspect of industrial development in Kazakhstan is technological modernization. It is expected that it will be carried out simultaneously at several dozens of the largest enterprises. The current course of modernization will be analyzed, possible difficulties in its implementation, and based on the data obtained, the program "Productivity 2020" itself will be adjusted. Scientific institutions will play a significant role in the implementation of this area of activity.

Modernization of industry in Kazakhstan also requires the training of new personnel - especially in the field of management. Management competence is one of the key success factors of any enterprise. High-tech fixed assets is only one of the conditions. It is also important that responsible and highly professional managers are at the head of the company. Similarly, the issue of training qualified personnel is also in the fielddirect production sites at enterprises. Experienced competent engineers are required to ensure the effective use of the renewed funds. Qualified specialists are needed to perform specific production tasks.

For the successful implementation of the Productivity 2020 program in the Republic of Kazakhstan, the consolidation and effective allocation of financial resources is necessary. The budgetary burden on the state in this aspect should be reasonable, therefore, private businesses will also have to be attracted as investors - those operating in the Republic of Kazakhstan, in Russia and other states of the EAEU, and Western countries.

Many researchers believe that the modernization of the industry of the Republic of Kazakhstan will also require further improvement of the legal framework that regulates the activity of enterprises in the relevant field. This may apply to various aspects of business activity - the conclusion of civil law agreements, contracts with foreign partners, investment agreements, intellectual property rights, etc.

Experts expect that the authorities of the Republic of Kazakhstan will ensure the development of industrial potential not only in the traditionally industrial areas of the country, but also in other parts of it, where so far the concentration of industrial enterprises is relatively low, but the potential for the construction of new facilities is high. Thus, it is expected that not only the industry of Central Kazakhstan will develop, but also enterprises inregions that are still lagging behind in terms of the number of industrial facilities and the volume of their products.