Investment Projects - Plastic Products Manufacturing

Establishment of a Plastic Products Manufacturing Enterprise in Astana

NACE 22.23 “Manufacture of Builders’ Ware of Plastic”

NACE 22.21 “Manufacture of Plastic Plates, Sheets, Tubes and Profiles”

PRODUCTS

• Plastic containers;

• Plastic coverings;

• Plastic pipes.

GLOBAL MARKET

Over the past five years, global demand for plastic products has demonstrated steady growth in imports. In particular, imports of plastic containers increased by 15.7%, plastic pipes by 25.5%, and plastic coverings by 16.8%. This confirms the high demand for these materials in the global market.

REGIONAL MARKET

In the market of the Republic of Kazakhstan, including Astana, there has been a steady increase in the volume of imports and exports of plastic products. In recent years, demand has risen for such product categories as plastic containers, coverings, and pipes. Over the past five years, imports of plastic products in the country have grown significantly.

In Astana, imports of coverings increased by 26.6%, pipes by 3.6 times, and containers by 2.7 times. Exports of coverings grew by 4.8 times, containers by 83.7%, and pipes by 29.4%.

RAW MATERIAL BASE

• Polypropylene – LLP Neftekhim LTD Company. Imports mainly from the Russian Federation and China. A large polypropylene plant was built in Atyrau Region, with a capacity of 500 thousand tons per year.

• Polyvinyl chloride (PVC) – Imports mainly from China and Russia.

• Polyethylene – Imports mainly from the Russian Federation and China; additionally, a polyethylene production project is being implemented in Atyrau Region with a capacity of 1.2 million tons.

POTENTIAL SALES MARKETS

The total import volume of neighboring countries in 2023 amounted to more than USD 4.6 billion.

COMPETITIVE ADVANTAGES

• Potential import substitution and export opportunities;

• State support for investors and entrepreneurs;

• Availability of raw materials and development of petrochemicals;

• Favorable geographical location for logistics and export;

• Growing domestic demand for plastic products;

• Prospects for scaling up and entering international markets.

GOVERNMENT SUPPORT MEASURES

Investment preferences:

• Exemption from customs duties (0% for up to 5 years on imports);

• Tax incentives (VAT, CIT, land tax, property tax – 0%);

• In-kind grants (land plots, buildings, facilities, etc.);

• Attraction of foreign labor (FLC).

Government support measures for Kazakh producers through JSC Kazakhstan Industry and Export Center QazIndustry:

Partial reimbursement of costs to industrial and innovative activity entities:

• for improving labor productivity and developing territorial clusters;

• for promoting domestic processed goods in foreign markets;

• for promoting domestic processed goods, works, and services in the domestic market.

Economy of Simple Things program:

• Subsidizing (base rate of the NB RK + 4.5%, final rate for the borrower – 7%) with no limit on the amount;

• Loan guarantees (up to 50% for loans up to KZT 1 billion, and up to 30% for loans over KZT 3 billion and up to KZT 5 billion inclusive).

Preferences of Special Economic Zones (SEZs):

• Tax preferences (CIT, land tax, property tax);

• Customs preferences (import of raw materials and equipment);

• Land with ready infrastructure (free lease of land plots);

• Simplified procedure for hiring FLC (attraction beyond quotas).