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Construction of a new Kia plant in Kazakhstan: the company is financing such a project outside of South Korea for the first time

Construction of a new Kia plant in Kazakhstan: the company is financing such a project outside of South Korea for the first time

Construction of a full-cycle plant for the production of Kia cars has started in Kostanay. The official launch ceremony was attended by First Deputy Prime Minister of Kazakhstan Roman Sklyar and Akim of Kostanay region Kumar Aksakalov.

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

The production capacity of the new plant, which is planned to create 1,500 high-paying jobs, will amount to 70 thousand 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 is making a direct investment in a joint venture and the construction of a plant outside the Republic of Korea for the first time in history.

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

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

It is expected that the construction work will be completed in 2024, after which the installation of equipment will begin. A pilot launch of the plant will take place in the first quarter of 2025, and a full production cycle will open in the second quarter.

"Today, Kia is a great honor and pride for us to have the opportunity to contribute to the development of the economy of the Republic of Kazakhstan. I am deeply convinced that the new plant in Kostanay will play an important role by providing a unique workspace where citizens, university graduates and engineers will be able to gain a higher level of work experience for many years to come," said President and CEO of Kia Corporation Ho Soon Song in his video message.

The South Korean company expressed full support for the industrial policy of the Republic of Kazakhstan in terms of increasing the level of local content in the automotive industry. So, Kia is already actively working on the opening of a localization center in Kostanay. Here, with the participation of small and medium-sized businesses, they 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 advanced world practices will contribute to an 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 workplace in mechanical engineering will lead to the emergence of 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 Tae-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 President of Kazakhstan Kassym-Jomart Tokayev in his Message to the people of Kazakhstan. These reforms are aimed at diversifying the republic's industry through the development of the manufacturing industry," he said.

Source: Akimat of Kostanay region

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