According to Worldfinancialreview.com, it was long believed that Kazakhstan was perceived on the global stage as an economy focused on the extractive sector, large-scale infrastructure projects, and transit. But since the early 2020s, this perception has begun to change: more and more international corporations are viewing the country not merely as a sales market, but are moving to establish their own production facilities here, expanding output and supporting local suppliers. As a result, the country is gradually emerging as a regional industrial hub with clear export ambitions 

From a sales market to an industrial base

By 2025, Kazakhstan’s economy had shown positive signs of structural transformation. Against the backdrop of a global restructuring of supply chains due to geopolitical and logistical risks, multinational companies are actively diversifying their production geography. In this context, Kazakhstan is steadily transforming into a manufacturing hub capable of supplying products not only to the domestic market but also to countries in Central Asia, the EAEU, and neighboring regions.

These changes are the result of the state’s economic policy. Growth in the manufacturing sector is expected to reach approximately 6% by the end of 2025, with a target of 6.2% set for 2026. It is precisely the manufacturing sectors that are increasingly becoming the mainstay of economic growth, gradually reducing dependence on raw material exports.

At the same time, metallurgy remains one of the drivers of Kazakhstan’s manufacturing industry. In 2026, output growth in the sector is projected to be around 3%, partly due to the Kyzyl Aray Copper, Ekibastuz FerroAlloys, Kazferro Limited, Shagala Mining, and other enterprises reaching their design capacity. In the ferrous metallurgy sector, production of ferroalloys, steel, cast iron, and flat-rolled products is expected to increase, while in the non-ferrous sector, production of gold, copper, aluminum, and zinc is projected to rise.

The machinery manufacturing sector is demonstrating even higher growth rates. In 2026, output is projected to increase by 13.4%, driven by a 17% rise in passenger car production and a 5% increase in agricultural machinery production. The chemical industry is also developing at an accelerated pace: in 2026, production growth is expected to reach 7% thanks to the commissioning of new facilities for the production of sulfuric acid, sodium cyanide, hydrogen peroxide, and liquid glass.

Laying the Groundwork for Localization

The current transformation is the result of reforms implemented in recent years by Kazakhstan’s leadership. Measures to improve the investment climate, modernize industrial zones, and increase regulatory predictability have created favorable conditions for long-term investment.

 Special economic zones, tax incentives, and simplified approval procedures allow foreign manufacturers to develop production strategies with plans for years to come.

Kazakhstan offers them political stability, proximity to major markets, and a legal framework that is understandable to international investors. This makes the country an attractive location for establishing manufacturing operations.

Kazakhstan’s emergence as an industrial hub is also evident in more technologically advanced sectors. The launch in 2025 of a full-cycle KIA automobile manufacturing plant in Kostanay marked a significant milestone for the domestic automotive industry.

Investments exceeding $270 million are focused not only on the domestic market but also on exports to Central Asian countries and the EAEU. A full production cycle requires a developed network of suppliers, skilled personnel, and long-term planning, turning such enterprises into anchor elements of industrial clusters.

Another example of localization is Wabtec, an American locomotive manufacturer. The company has long been present in Kazakhstan but is now strengthening its localization efforts by increasing the share of local components and opening an engineering and technology center in Astana. Long-term contracts with the national railway company ensure stable demand, while the transfer of knowledge and expertise strengthens the country’s technological potential.

Qarmet is implementing several strategic projects that significantly strengthen the country’s industrial base. One of them involves launching a section rolling mill in partnership with a Chinese company, which will allow for the complete replacement of imports in the construction steel sector and stabilize the domestic market. Another project is the construction of a casting and rolling complex in the Karaganda region, focused on producing hot-rolled steel up to 1,850 mm wide and 0.8 to 16 mm thick.

These products are in demand in the automotive, oil and gas, nuclear, medical, and pipe industries, as well as in the production of household appliances. The implementation of such projects will help reduce production costs and expand the range of higher-value-added products.

Growing Investment Portfolio

Kazakhstan actively supports its industrialization agenda. A portfolio of 20 major projects with foreign participation has already been formed, with a total value of approximately 5.7 trillion tenge, which will create over 11,000 jobs. Additionally, nine multilateral projects involving companies from two or more countries are being implemented, totaling approximately $2.4 billion and creating over 2,800 jobs. Financing is provided with the support of national companies and development institutions, which reduces investment risks.

Most of the new production facilities are initially export-oriented. The automotive, metallurgical, and machine-building industries are targeting the markets of Central Asia and the EAEU. Localization creates a significant multiplier effect: jobs are created not only at factories but also in logistics, engineering, and related services, while the transfer of expertise contributes to the development of a more skilled workforce.

The expansion of international corporations’ presence reflects the emergence in Kazakhstan of an environment increasingly conducive to industrialization. Investments in localization and processing demonstrate business confidence in the country’s long-term trajectory and underscore its growing ability to integrate into global and regional value chains.

By attracting multinational manufacturers, promoting localization, and building export capacity, Kazakhstan is strengthening its position as one of Eurasia’s key industrial hubs.

Source: kazpravda.kz