Kazakhstan’s light industry shows growth potential
This year the light industry in Kazakhstan showed growth in different segments. The industrial production index amounted to 113.4 percent.
Recently, light industry workers celebrated their professional holiday. They have a lot to be proud of. This year, the light manufacturing in Kazakhstan provided great support and demonstrated social responsibility – since the start of the COVID-19 pandemic in the country, the enterprises managed to quickly reorient themselves and started sewing protective equipment, including masks and medical suits. Some of the products were distributed free of charge.
Mainly, the female half of the Kazakh population is involved in the light industry –90 percent of the sector’s workers are women. Consumer goods manufacturing also creates a solid foundation for small and medium-sized enterprises, which is any state’s key to stability. Kazakh Ministry of Industry and Infrastructure Development announced that currently the light industry development is a priority for the Kazakh government.
Traditionally, the main sectors of the light manufacturing include the textile and clothing, leather, fur and shoe industries.
Textile manufacturing makes more than 60 percent of the light industry in Kazakhstan, the ‘energyprom.kz’ website reported. Cotton fabrics segment grew by 3.5 percent and reached 8.1 million square meters from January to April of this year. Finished textile products for the household grew by 5.7 percent to 7.4 million pieces, of which bed linen amounted to 2.5 million pieces, which makes a 22.1-percent increase in a year. The manufacturing of nonwoven materials and products made of them amounted to 1.9 million square meters for the period from January to April.
In price terms, the volume of production of textile products for the first four months of this year amounted to 23.4 billion tenge (US$57.9 million), which is 20.5 percent more than the last year. The share of textile industry in the total volume of the light industry production increased from 55.5 percent to 60.1 percent.
Fabric production is concentrated in three regions of Kazakhstan, including Pavlodar region (14.4 million square meters) and Kostanai region (0.4 million square meters), as well as Shymkent (8.6 million square meters). Felted footwear was produced in Akmola region, which amounted to 15,500 pairs, and in East Kazakhstan region, which amounted to 4,600 pairs. The entire cotton production falls entirely on Turkistan region.
According to Kazakh Ministry of National Economy, to date, manufacturing industry has the greatest potential for attracting investment. In the period from 2020 to 2024, it is planned to implement a pool of 41 investment projects in the light industry for 52 billion tenge (US$128.7 million). The implementation of more than 30 projects in this field is planned for this year.
Meantime, light industry export showed growth last year. The increase in supplies was observed in the production of textiles by 21.5 percent and in the production of clothing by 12 percent.
According to Kazakh Ministry of Industry and Infrastructure Development, the main export items in 2019 were cotton fiber, textile materials, impregnated, coated or duplicated with plastics, as well as bed linen. Mainly, cotton fiber was exported to China, Moldova and Latvia, whereas textile materials were exported to China and Russia and bed linen to Russia.
Thirty light industry enterprises of Kazakhstan enter the foreign market. In total, nearly 10 percent of the Kazakh light manufacturing is exported.
Currently, support for the light industry companies is provided as part of systemic measures aimed at the manufacturing industry. This includes the export promotion, as well as the promotion of increased labor productivity, the promotion of goods on the domestic market, the implementation of the unified business support and development programs ‘Business Roadmap 2020’ and ‘Economy of Simple Things’.
The Kazakh government also approved the Roadmap for the development of light industry for the period from 2019 to 2021. It provides 52 measures to ensure the supply of raw materials to enterprises, as well as the fight against illegal circulation of goods and the increase of the share of the Kazakh content. Measures of economic incentives and systemic support measures are also included.
There is a special economic zone ‘Ontustik’ in Kazakhstan, the main purpose of which is creating conditions for the development of the textile and clothing industry. Investors there are exempt from corporate income tax, property and land tax and customs duties for the period up to 2030.