Construction of Kia new plant in Kazakhstan: company finances such project outside of South Korea for 1st time

Construction of Kia new plant in Kazakhstan: company finances such project outside of South Korea for 1st time

The construction of a full-cycle plant for the production of Kia cars was launched in Kostanai. Roman Sklyar, First Deputy Prime Minister of the Republic of Kazakhstan, and Kumar Aksakalov, Akim of Kostanay region, took part in the official ceremony of launching the works.

The start of construction of such a large industrial facility was the result of agreements of the Head of State Kassym-Jomart Tokayev with the management of the South Korean company. Recall that in January of this year, the President, attending the launch of small-unit production of Kia cars in Kostanay, emphasized the importance of further expansion of industrial cooperation and the formation of engineering base.

The production capacity of the new plant, where it is planned to create 1,500 high-paying jobs, will amount to 70,000 cars per year. About $250 million of foreign investments will be invested in the project.

As part of his speech, Roman Sklyar noted that Kia for the first time in history makes a direct investment in a joint venture and construction of the plant outside the Republic of Korea.

"Construction in Kostanai of a full-cycle plant for the production of Kia cars can be called a truly breakthrough high-tech project for the engineering industry. This project will give a real multiplier effect, will increase the level of training of a new generation of engineering and technical personnel, as well as significantly accelerate the transition to the next stage of localization development," he said.

According to the First Deputy Prime Minister, the emergence of the plant with such a key investor will be a crucial stage in the development of the domestic industry and will be a good example for future joint investment projects with South Korea in all sectors of the economy. 

Construction work is expected to be completed in 2024, after which equipment installation will begin. In the first quarter of 2025, the plant will be piloted and the full production cycle will open in the second quarter.

"Today, we at Kia are honored and proud to have the opportunity to contribute to the development of the economy of the Republic of Kazakhstan. I strongly believe that the new plant in Kostanai will play an important role by providing a unique workspace where citizens, university graduates and engineers can gain a higher level of work experience for many years to come," Kia Corporation President and CEO Ho Sung Song said in a video message.

The South Korean company expressed its full support for the Republic of Kazakhstan's industrial policy in terms of increasing the level of local content in the automotive industry. Thus, Kia is already actively working on opening a localization center in Kostanai. Here, with the participation of small and medium-sized businesses will be engaged in the production of automotive components.

Akim of the region Kumar Aksakalov is confident that the launch of a modern high-tech enterprise with the involvement of the world's best practices will contribute to the increase in production volumes in the automotive industry of the republic.

"The development of mechanical engineering will have a multiplicative effect on the development of the region. In particular, the creation of one job in mechanical engineering will lead to five to six jobs in related industries. To increase the level of localization of production around the new plant, a belt of small and medium-sized businesses will be created as suppliers of parts and components," Kumar Aksakalov said.

Ambassador of the Republic of Korea to the Republic of Kazakhstan Dae-ik Jo noted that for more than 30 years Kazakhstan and South Korea have consistently strengthened mutually beneficial partnership.

"Today the countries are actively developing practical economic cooperation, which corresponds to the goals of economic reforms announced by the President of the Republic of Kazakhstan Kasym-Jomart Tokayev in his Address to the people of Kazakhstan. These reforms are aimed at the diversification of industry in the republic through the development of the manufacturing sector," he said.

Source: Official Information Source of the Prime Minister of the Republic of Kazakhstan
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