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Large car factory in Ust-Kamenogorsk to be launched in 2018 01 апреля 2015, 02:56

The largest automobile manufacturer in Kazakhstan - AZIA AVTO - is building a new plant in Ust-Kamenogorsk, which is sure to consolidate the company's position as the domestic market leader.
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The launch of a large car factory by the leader of the Kazakh car market Azia Avto Kazakhstan has been postponed until 2018. The news came from the Governor's office of East Kazakhstan Oblast, a Tengrinews correspondent reports.

Earlier scheduled for launch in 2016, the new car plant in Ust-Kamenogorsk, the administrative center of East Kazakhstan Oblast, is to become the largest automobile plant in the country.

The total area of the car making cluster will be 523 hectares. The new site will house welding, painting and assembly shops with a design capacity of 120,000 units per year. With the launch of the first phase there will be production of automotive components - instrument panels, bumpers, cladding. In the next step - fuel tanks, exhaust systems and seats will be built. 

The first cars to be produced at the new assembly line are sedan Lada Vesta and crossover Lada XRay, as well Lada Granta and Lada Kalina models. The plans of the manufacturer also include the release of products for the Renault-Nissan alliance.

General Director of Azia Avto Kazakhstan Yerzhan Mandiyev said that if they managed solve a number of issues "within a reasonable time", the installation of primary technological equipment at the enterprise would be completed by the end of 2017.

"Finding a single land plot of this size for the project, even in the industrial zone of Ust-Kamenogorsk, was impossible. The Akimat (regional authorities) of East Kazakhstan Oblast offered us a territory that was owned by seven different private owners. The process of buying the land from them and the transfer of ownership took many months. Even more time was spent on paperwork required for construction of the engineering infrastructure, which is expected when you consider that we are talking about the largest engineering company in the country and the first construction of this scale since Kazakhstan's indigence (in 1991). As a result, the date of completion of construction has been changed. Changed for the reasons that, unfortunately, do not depend on us as investors," Mandiyev explained.

At the moment, the construction of the car plant in Ust-Kamenogorsk is approaching a new milestone - supply and installation of technological equipment of the first stage. "It's a different amount of investment, and it requires access to borrowed funds on terms common for the engineering industry. Fundraising - this is a new challenge that we are facing. It is no secret that the domestic banking system is experiencing an even greater resource hunger than before," he added.

Earthworks are already completed with 565,000 cubic meters of soil having been moved and vertical grading and leveling of the site currently underway. The first 20,000 square meters of prepared land have been passed on to the builders. In addition, a large part of the design works has been completed. In particular, the engineering concept is ready. The design capacity of 120,000 cars per year will be reached in six years after the launch, Mandiyev said.

According to the representative of the enterprise, the new car plant will aim to export its products to Russia, Kazakhstan's large northern neighbour. The number of cars supplied to Russia annually will reach 70,000. 

"The plant under construction will become a full-fledged regional production center - our capacities are part of the long-term development strategy of the alliance Renault-Nissan-Avtovaz. Our country now accounts for 80 percent of exports of AvtoVAZ. At the same time Togliatti is geographically removed from the market of Kazakhstan, from the markets of Siberia, Far East Federal District. However, the key Siberian regions are separated from Ust-Kamenogorsk by only 500-1000 km. This logistics arm is far more profitable thandelivery of finished products, for example, from Tolyatti in Novosibirsk. Therefore, we expect that about 40,000 vehicles produced at the new factory in Ust-Kamenogorsk will be sold in Kazakhstan, but more than 70,000 cars will be shipped to the Russian market,” he said.

In addition, some of the produce will be supplied to other Central Asian countries, except Uzbekistan, which is currently off limits  for cars assembled in Kazakhstan. "Overall, we intend to reach export volumes of around 90 billion tenge per year. (...) Deliveries of cars to the nearby markets will start simultaneously with the launch of the first full cycle production line," Mandiyev added.

The launching of the plant will put Azia Avto  even further ahead of other companies in the automobile industry of Kazakhstan. As of the year-end of 2014 Bipek Avto - Azia Avto holding maintained the status of an absolute leader of the domestic automotive industry.

According to the company’s website, 53% of the entire market demand for cars belonged to the group and the turnover reached $1.3 billion. In 2014, Kazakhstanis bought 83 979 vehicles from Bipek Avto - Azia Avto branches. The output of the company equaled to over 13% of the entire mechanical engineering industry of Kazakhstan. 28 803 vehicles rolled off the production line of Azia Avto Kazakhstan in 2014 (-7,1% in comparison with the same period of the previous year). Additional $62 million were invested in new projects of the holding.

Igor Potapov, General Director of Bipek Avto Kazakhstan, was quoted by the company’s website as saying: “83 979 of sold vehicles and 53.2% of market is a result of our operation in 26 cities of country. The map of civil autoretail in 2014 is added by Stepnogorsk and Beyneu cities. A new auto center was opened in Shymkent. Construction of the biggest logistic base has began in South Kazakhstan Oblast. Also construction of auto centers has been launched in Astana and Aktau. A record amount - 5.3 billion tenge ($29 million) has been invested into regions' infrastructure.”

In turn, Yerik Sagymbayev, President of Azia Avto, said: “In the preceding year Azia Avto confirmed the status of the biggest car-building company of the country. 28,800 produced vehicles totally worth 113.5 billion tenge and this is a seventh part of Kazakhstan engineering production. As for light automobile industry, the plant is responsible for 77.5% of all vehicles, supplied by domestic enterprises.”

In 2015, the dynamics has changed due to the economic decline in the country. However, the company continues to hold the leading position on the Kazakh market of light cars.

In January 2015 the contribution of Ust-Kamenogorsk conveyor line into the passenger car industry was 92.8%. Today, the holding employs 5,700 workers in 26 cities of Kazakhstan.

By Dinara Urazova (Vladimir Prokopenko contributed to the story)


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