Today Samruk-Kazyna Ondeu LLP organized a conference on the topic: “Chemical Industry: Trends, Prospects and Opportunities. Samruk-Kazyna Ondeu Development Strategy”.
The conference was held in offline and online formats and gathered more than 100 participants, including representatives of relevant ministries, the Samruk-Kazyna group of companies, associations, business communities, investors, institutions, etc.
According to the analysis of DASCO CONSULTING, the chemical industry has a high employment multiplier (7 to 1) and is one of the leading economic drivers for job creation. For example, when creating 100 jobs in the fertilizer industry (agrochemistry), about 510 jobs are created in supplier industries and 220 jobs in consumer industries and related industries.
According to international forecasts, until the second half of the 2020s, the global chemical industry will grow at an average rate of 3%, which is higher than the average growth rate of global GDP. Forecasts of sustainable growth of the chemical industry are based on global trends such as favorable global demographics, income growth in all macro-regions of the world and continued urbanization.
High rates of return on investment in the global chemical industry (return on invested capital ROIC 9-12%, return on equity ROE 10-12, etc.) significantly exceed the values for most other industries.
Having substantial reserves of hydrocarbon raw materials, Kazakhstan has the potential to become a significant regional player in the chemical industry. However, currently the share of the chemical industry is only 1% of Kazakhstan’s GDP, its GVA is currently half the level of 1991.
Simple products of basic chemistry account for up to 60% of domestic chemical production. The underdevelopment of the industry leads to the fact that the demand of the domestic market for chemical products, estimated at KZT1.7 trillion per year, is met by more than three quarters at the expense of imports.
As Berik Bakhytbekovich Zhankubayev said in his presentation of the Samruk-Kazyna Ondeu Development Strategy: “When developing the Strategy, more than 814 goods were analyzed for the presence of domestic demand and import substitution potential, as well as the presence of external demand in target foreign markets. As a result, we have formed a so-called “long list” of chemical products, including more than 130 items.
Later, the “long list” of goods was analyzed additionally for the technological complexity of production, the availability of basic raw materials or raw (intermediate) goods, the growth of consumption over the past 10 years, the availability of technologies / licenses, the possibility of transportation and logistics costs, the amount of capital expenditures, as well as minimum / optimal capacity.
As a result, we have formed a list of 15 strategic products that the company will focus on but not limit its future activities.
The strategic list of 15 products includes such popular products as: urea, Monoammonium phosphate (MAP) and Diammonium phosphate (DAP), ethylene glycol, methanol production, sulfuric acid, hydrogen peroxide, etc.
In total, it was formed:
- 4 promising products in agrochemistry;
- 4 products in the petrochemical industry and,
- 7 promising products in the special chemicals sector.”
“Summing up the results of the conference, I would like to note that the issues of the chemical industry of Kazakhstan do not leave market participants indifferent, this was evident from the active feedback of visitors. We encourage and promote openness in building trusting relationships with business partners and we are always ready to discuss the development of the chemical industry!” - Meiyr Nurtayuly concluded the conference.