Kazakhstan’s government unveiled extensive economic development plans aimed at bolstering its economy. It is actively seeking cooperation with Korean conglomerates, such as Hyundai Motor Group and Samsung Electronics, POSCO, to lead such efforts.
Earlier this month, Kazakhstan’s President Kassym-Jomart Tokayev delivered his state-of-the-nation address, titled, “Economic Course of a Just Kazakhstan,” outlining ambitious economic reform plans and a new economic direction for the nation that will create more opportunities for international cooperation.
“A growing number of Korean companies have committed to establishing production facilities in our country, and we are in talks with other major conglomerates to expand cooperation,” a Kazakh government official said.
Currently, over 700 Korean-invested companies operate in Kazakhstan. Korean companies in the country include Samsung Electronics, Shinhan, Lotte, SK, KNOC, POSCO, and Hyundai Motor Group.
“Currently, the biggest investor is Hyundai Motor Group, followed by Samsung Electronics, POSCO,” the official added. “Recently, Doosan Enerbility is part of a consortium to build a heat and power plant in the country.”
Since establishing diplomatic relations in 1992, Korea currently ranks as Kazakhstan’s fourth-largest trading partner, with a bilateral trade volume reaching $6.5 billion in 2022. Korea is also the sixth-largest foreign investor, having contributed a total of $8.9 billion in foreign direct investments to the Central Asian country, according to the Embassy of Kazakhstan in Korea.
Amid the Russia-Ukraine conflict, major Korean companies’ manufacturing facilities in Russia have remained inactive for over a year. Attempting to sell these factories has presented significant challenges, leading companies to explore alternative locations to mitigate their losses.
“Korean companies that previously operated production facilities in Russia have been actively exploring alternative locations to compensate for their losses, and Kazakhstan is among the options under consideration,” stated an industry insider familiar with the matter.
In the automotive industry, Kia recently signed an investment agreement with the Kazakh government to establish a complete knock-down (CKD) assembly plant in the Kostanay region.
This marks Kia’s second production facility in the same region, following the completion of its Sportage CKD assembly plant at the end of last year. The Sportage assembly plant is capable of manufacturing 10,000 of the compact SUVs annually, and the second plant, set to be completed in 2025, is expected to have an annual production capacity of 30,000 vehicles. Kia has invested approximately 260 billion won ($194.9 million) into the establishment of the second plant.
Furthermore, the Kazakh government is pledging to exempt companies from taxes and other mandatory payments for the first three years in sectors such as deep metal processing, oil, gas, coal chemistry, heavy engineering, uranium enrichment, and automotive components to better appeal to foreign investors.
Kazakhstan and Korea forged diplomatic relations in February 1992, shortly after the Central Asian country’s independence from the Soviet Union. Economic relations between Kazakhstan and Korea have been expanding with Korean firms investing notably in Kazakhstan’s energy sector, participating in the development of oil and gas fields. Trade between the countries has also grown, encompassing the areas of technology, agriculture, and manufacturing.
Source : TheKoreaTimes