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Over 50% in structure of industrial production of Kostanay region accounts for processing industry

by January 29, 2019 Market

Kostanay region has a favorable economic and geographical position due to its proximity to such developed industrial regions as the Urals in the West and Central Kazakhstan in the southeast. The region borders on four regions of the Republic of Kazakhstan and three regions of the Russian Federation. Kostanay region includes in its borders 16 districts, four cities of regional and one city of district significance. The area of the region is 196 thousand km �. The population as of Dec. 1, 2018, was 873.1 thousand people, of which 475.5 thousand people fall on the city.

According to the regional akimat, the socio-economic development of the region in 2018 shows a positive trend in all key economic areas. The average monthly nominal wage for the third quarter of last year increased by 8.5% compared to the same period in 2017. 98.5 billion tenge was allocated to the social sphere, which is almost 41% of the regional budget.

In general, the gross regional product grew by 10.3% and amounted to 1,386.6 billion tenge: the main share is accounted for industry � 26.1% or 361.3 billion tenge (wholesale and retail trade � 14%, transport � 11, 5%, agriculture � 10.1%).

Development of industry: increasing the share of manufacturing

Kostanay region is one of the largest mining regions of Kazakhstan. Enterprises of this industry produce 100% of the republican volume of iron ore pellets, bauxite and asbestos, more than 60% of iron ore.

The industry’s products are the main export item of the region and the main source of foreign exchange earnings. Modern diversified industry of Kostanay region is represented by combines, factories, modern small enterprises. There are more than 700 industrial enterprises in the region, which employ 43 thousand people.

To date, the share of the manufacturing industry in the industrial structure of the region is more than 50%. Growth in 2018 was 5.8%. The industry is represented by enterprises of mechanical engineering, metallurgy, production of building materials, food, light industries and others.

Industrial labor productivity is also growing due to the introduction of elements of digitalization by industrial enterprises, for 9 months of 2018 it was $15.2 thousand.

In total, for 2017-2018, enterprises implemented six projects worth over 800 million tenge, while the expected effect only for Kostanay Minerals JSC will be about 165 million tenge per year, and labor productivity in enterprises has increased to 5-10%. There are 10 more projects worth more than 100 billion tenge, with the expected effect in total terms of more than 300 billion tenge by 2025. At the same time, the region is in the leading positions in the production of flour (29.1%), vegetable oil (4.2%), dairy products (16.3%) and confectionery (34.1%).

The share of engineering, production in the industry in 2018 increased by 13% and amounted to 113.4 billion tenge. The region is the only industrial enterprise in Kazakhstan that produces combine harvesters. Since 2005, more than 4 thousand combine harvesters have been assembled at the sites of Agromash Holding JSC, of which 240 are in 2018.

The automotive industry of Kostanay region is not only one of the young industries in the economy of our region, but also the country as a whole. If in 2010 enterprises collected 77 cars, in 2018 more than 12 thousand cars. Since 2016, 46 electric vehicles under the Made in Kazakhstan brand have been produced in Kostanay, which have passed road tests in the northern regions of the country with an excellent result and are actively involved in promoting them in Kazakhstan.

It is also worth noting the network of roads of the Kostanay region, which is one of the longest in the country and is more than 9.2 thousand km. The dynamics over the three years in terms of means aimed at improving the quality of the region’s highways are as follows: 2016 � 17.6 billion tenge, 2017 � 34.1 billion tenge, 2018 � 37.6 billion tenge. On the roads of regional and district significance in 2018, 331 km have been repaired. The share of regional and district roads in good and satisfactory condition, according to the 2018 results amounted to 66%, exceeding the share of 2017 by 2%. In 2018, the reconstruction of an artificial runway at Kostanay airport began, for which 4.6 billion tenge was allocated and mastered. The renovation will be completed in 2019.

New sales markets: export of products to 75 countries

The turnover of the region in January-November 2018 amounted to more than $2,670.3 million (an increase of 45.5%). At the same time, exports amounted to $1,518 million, imports � $1,152.3 million. It is worth noting that the implementation of export supplies of products is one of the priority tasks of foreign economic and trade activities of the region.

The enterprises of the region produce a wide range of products, which has established itself both in the domestic and foreign markets. Export geography of the region is 75 countries. The main share falls on the Russian Federation. At the same time, enterprises of the region have mastered new markets for products in the Crimea, Samara, Chechen Republic, Ukraine, Belarus, Armenia, Kyrgyzstan, Romania, etc.

Thus, iron ore products are exported to China and Russia, asbestos � to foreign countries and the CIS, cars � to Russia, Tajikistan and Kyrgyzstan, confectionery products � to Mongolia, Germany, China, the CIS countries; dairy products � to Russia, flour and pasta � to Afghanistan, Iran, the CIS countries. In 2018, the export of copper concentrate to China began.

In the region, a regional Export Development Council operates on an ongoing basis, which examines the problematic issues of exporting enterprises in order to work out solutions and recommendations on entering foreign markets.

Investment projects created more than 700 new jobs

Akimat of the region notes that in the investment area there is also a positive growth trend. Thus, in 2018, 245.3 billion tenge was invested in the regional economy, which in value terms exceeds the figure for 2017 by 43 billion tenge. External investments in fixed assets amounted to 31.6 billion tenge or an increase of 38.6%

The most important factor in the economic development of the region is the implementation of the industrialization program, due to which the share of the manufacturing sector in total industrial output in 2018 was 51.7%, an increase of 22.7% compared with 2010. Since the beginning of the program, 90 projects have been commissioned in the region, amounting to 150.3 billion tenge, about 5.6 thousand permanent jobs have been created. These enterprises for the entire period (since 2010) produced products worth more than 700 billion tenge (including about 170 billion tenge � in 2018).

In 2018, seven investment projects worth 25.2 billion tenge were put into operation, about 700 new jobs were created. Among them are cement and tractor plants, meat processing complex, confectionery production and building materials workshops, 2 feed mills. The year 2018 was undoubtedly fruitful for the region in the investment sphere and was marked by the start of large projects that are important for the development of the manufacturing industry. In general, there are 40 investment projects in the amount of 2.2 trillion tenge, the implementation of which will be aimed at fulfilling the Head of State’s tasks on the further industrialization of the country.

Digitization of agro-industrial complex: using elements of precision farming

The agro-industrial complex of the region maintains a positive development dynamics. In 2016, gross output amounted to 319 billion tenge, in 2017, GDP was equal to 362.2 billion tenge, by the end of 2018 gross output amounted to 378.2 billion tenge, an increase by 18.5% to 2016.

The dynamic development of the agro-industrial complex of the region became possible thanks to state support. In 2018, 26.1 billion tenge of subsidies were allocated from the budget. 12.8 billion tenge was allocated for spring field and harvesting, which allowed the agricultural units of the region to increase labor productivity.

The region is a pilot region for digital improvements in the agricultural sector. Thus, the 33 quick wins outlined in 2018 for the implementation in agriculture, included in the Roadmap for the implementation of the Digital Kazakhstan State Program, have been fully implemented.

The main emphasis is placed on the application of elements of precision farming in plant growing: the economic effect of the introduction is to ensure an increase in the yield of grain from 3 to 5 centners per hectare; reduced production costs for fuel and lubricants, mineral fertilizers and plant protection products from 15 to 20%.

Last year, the export potential for grain in the region was increased by 845 thousand tons (63%). Livestock breeding is steadily developing and its export potential is increasing. Growth in the livestock population of all animal species, including cattle by 3.3% (total in the region of 455.2 thousand heads), the number of horses increased by 7.8% (total 116.7 thousand heads), small horned cattle by 4.1% (total 454.4 thousand heads) and poultry by 4.2% (total 4,423 thousand heads). This made it possible to increase the volume of livestock production and meat exports. In 2018, 1,802 tons of meat (113.8%) were exported, including 1619 tons of beef.

In the framework of the Sybaga program, more than 2 thousand heads of breeding stock were introduced.

Affordable housing: implementation of Nurly Zher and 7-20-25 programs

In 2018, at the expense of all sources of financing, about 300 thousand m� of housing was built in the region, this is an increase of 13.1%. Including at the expense of budget funds, 111 thousand square meters of housing were commissioned and more than half at the expense of commercial and private developers.

Meanwhile, five rental houses were commissioned without redemption for socially vulnerable groups of the population. The construction of two 99-apartment rental houses with the right of redemption on the line of JSC Kazakhstan Mortgage Company has been completed. In addition, 20 credit houses were commissioned through housing savings system. In total for the years 2017-2018, 151 houses were built in the same architectural style.

With regard to new opportunities for housing, under 7-20-25 program, second-tier banks received 169 applications for consideration, 103 of them for about 720 million tenge were approved.

In addition, pursuant to the order of the Head of State, 83.7 million tenge was allocated to partially subsidize initial contributions on a preferential mortgage. At the end of 2018, eight certificates worth 5.8 million tenge were issued.

Development housing and communal services: water and gas supply

An important factor in the welfare of society is the provision of water supply to human settlements. For these purposes, the Program for the Development of Regions from 2016 to 2018 allocated 13.1 billion tenge from the budget. 18 objects of rural and urban water supply were put into operation, within which water supply for 18 villages and three cities was improved, for the first time 3 villages were connected to the centralized water supply system. Including in 2018, 8.7 billion tons of budget funds were spent: 11 rural and urban water supply facilities were introduced, within which water supply for 12 villages and one city was improved, for the first time three villages received the centralized water supply system.

According to the Program for the Development of Regions from 2016 to 2018, 4.7 billion tenge was allocated from the budget to the gasification of settlements in the region, which allowed gasifying 8 settlements. Including in 2018, 4 projects were implemented. In general, the number of the gasified population of the Kostanay region is increased from 53.4% to 55.3%, eight settlements of the region are provided with natural gas (coverage increase from 10.5% to 12.6%).

Small and medium-sized entrepreneurship as driving force of region’s economy

As part of the activities of the Employment Roadmap 2020, the Program for the Development of Productive Employment and Mass Entrepreneurship from 2016 to 2018 80 thousand people received employment services, of which in 2018 � 30.6 thousand people.

In the region, 40.6 thousand jobs were created, of which 27.4 thousand or 67.4% � on a regular basis, including 13 thousand jobs created in 2018, of which 9.5 thousand or 72.8% are permanent.

In 2018, Enbek spent 7.6 billion tenge on the implementation of the State Program for the Development of Productive Employment and Mass Entrepreneurship for 2017�2021, which is 38.2% more than in 2017.

The implementation of employment measures, the creation of new jobs have a positive effect on the situation in the regional labor market. In the third quarter of 2018 compared to the same period of 2016, the unemployment rate decreased by 0.1%. The share of unproductive self-employed citizens in the self-employed population decreased by 1.7 percentage points.

In 2019, more than 20 thousand people are expected to be employed, 3 thousand will receive vocational training, 3 thousand people will take part in public works, etc. Ten thousand jobs will be created.

In connection with the introduction of compulsory social health insurance in the region, work is underway to update the status of citizens, formalize the activities of the informally employed population, and also involve self-employed and unemployed citizens in productive employment. As a result of the work carried out in 2017-2018, the statuses of 283 thousand people were updated. In 2018, 6.6 thousand people from among the self-employed and unemployed people were covered by employment measures.

The measures taken in the region directly contribute to the development of small and medium-sized businesses and an increase in the employed population. What is evidenced by the dynamics of the main indicators. As of Jan. 1, 2019, more than 51 thousand small and medium-sized businesses operate in the region. The share of operating business entities in the total volume registered in comparison with 2017 increased by 5.9%. For 9 months of 2018, the volume of output by SMEs increased by 17.4%, the number of people employed in SMEs � by 7%.

In the region, state business support programs are being actively implemented, under which in 2018 more than 1,000 business projects were supported in the amount of 26.4 billion tenge. In addition, there are 2 regional SME lending programs in the region, within which 249 projects worth 2.4 billion tenge were supported. In 2018, within the framework of the attracted grant of the Asian Development Bank in the amount of $225 thousand, a database of SMEs of the region was created on the principles of Big Data. This work is aimed at improving the quality and efficiency of management decision-making and the provision of public services for businesses.

It should be noted that today in the region work is being carried out on 68 public-private partnership projects in various sectors of the economy � education, healthcare, housing and public utilities, housing construction, culture and sports totaling 27 billion tenge. Fourty-five PPP contracts for 17 billion tenge were concluded.

Increased income and social support

In 2018, social assistance in various forms (housing assistance, social assistance on decisions of local representative bodies) was provided for 801.4 million tenge. Over the past three years, there has been a marked decrease in in the number of citizens in need � by 30%. In order to increase the social responsibility of beneficiaries, to increase their motivation for self-reliance, a new model of targeted social assistance introduced in 2018 covered 14.2 thousand low-income citizens, involving 1,483 able-bodied beneficiaries in various forms of employment.

The measures taken by the government, in conjunction with targeted social payments, have increased the incomes of needy citizens by an average of 2.7 times. As a result of the measures taken, according to the results of the 3rd quarter of 2018, the share of the population with incomes below the subsistence minimum for the region decreased by 2.1 percentage points.

From year to year, funding for activities aimed at social support for people with disabilities and senior citizens is increasing. In 2019, provided 4.8 billion tenge. Every year, people with disabilities are provided with more than 7 thousand technical means and rehabilitation services. Over the past 3 years, 26,225 people have received special social services, of them, 9,346 people � in 2018.

Reduced incidence rates and development of medical infrastructure

According to the akimat of Kostanay region, over the past three years there has been a positive trend in a number of indicators. So, the level of life expectancy increased to 72.2 years. The overall mortality rate of the population, the incidence of tuberculosis, mortality from diseases of the circulatory system, mortality from malignant neoplasms, and from tuberculosis have decreased.

In 2018, 2,158 million tenge was allocated for material and technical equipment, 1,908 million tenge of which are for the purchase of medical equipment, 61 million tenge of ambulance vehicles, 189 million tenge ambulance cars.

As part of the digitalization of the health sector, a medical information system was introduced in 51 health organizations. The planned 84 paper forms, transferred to an electronic format according to the plan. Of the 867,069 population of the region, 82.1% were digitized according to the register of the attached population.

Note that in 2018, 131 million tenge was allocated for providing access to broadband Internet, and 366 million tenge for equipping computer equipment. Of the 511 healthcare facilities, 477 facilities are provided with internet access, which is 93%.

Financing of education system increased by 4.7 billion tenge

To create the necessary conditions, the bulk of the regional budget is spent annually on expenditures in the field of education. Compared to 2017, costs increased by 4.7 billion tenge. In 2018, at the expense of the regional budget, an overhaul of eight objects was implemented for a total of 831.3 million tenge.

To achieve 100% coverage of children by pre-school organizations from 3 to 6 years old, in 2018, 885 new places were introduced. In order to eliminate three shifts, in 2017 schools are being built, 2.5 billion tenge was allocated from the national budget. The construction of two schools in the city of Kostanay will completely solve the issue of shortage of student places. Within the framework of the President’s Five Social Initiatives, it is planned to build three dormitories for colleges in Kostanay.

As part of the implementation of the Digital Kazakhstan program, 540 units of equipment were delivered to schools in the region. Today, all 504 secondary schools (100%) are provided with multimedia equipment.

Also, all schools in the region have broadband internet access. Within the framework of the Rouhani Zangyru program, 23 digital facilities were installed at the expense of sponsorship in the amount of 186 million tenge in additional education organizations in each district.

Thirty tourist routes to region’s attractions

In accordance with the Head of State’s request, the region is working to increase the tourist potential. The range of services in various areas of tourism provided by local travel agencies is expanding. In the area developed 30 tourist routes to the attractions of the area. Following the results of 9 months of 2018, the number of tourists visiting the region increased by 9.9%, while the growth in the volume of services rendered by tourist facilities increased by 19.6%.

Along with this, investments in the construction of new and reconstruction of existing tourist facilities in the development of tourist infrastructure are attracted. The reconstruction of the road leading to the resort area of Altynsarin district was completed in 2018. In 2018, Kazakhstan’s Tourist Card from the Kostanay Region ranked among the top 50 sites at the regional level: the development of health tourism in the resort area of Altynsarin district and hunting and trophy tourism.

Source: The Prime Minister of Kazakhstan