Kia Corporation has officially commenced the construction of a full-cycle plant for the production of Kia cars in Kostanay, Kazakhstan. The inaugural ceremony was attended by the First Deputy Prime Minister of the Republic of Kazakhstan, Roman Sklyar, and hokim (mayor) of the Kostanay region, Kumar Aksakalov.
The groundbreaking event follows agreements between the Head of State, Kassym-Jomart Tokayev, and the leadership of the South Korean automotive giant earlier this year. This initiative aligns with the president's vision of expanding industrial cooperation and establishing a robust engineering base within the nation.
The new plant, set to generate 1,500 high-paying jobs, boasts a production capacity of 70,000 cars annually. The project, requiring approximately $250mn in foreign investment, marks the first time Kia is directly financing a joint venture and constructing a plant outside of South Korea.
During the ceremony, Roman Sklyar emphasized the project's significance, labeling it a "breakthrough high-tech project" for the mechanical engineering industry. He stressed that the endeavor would have a considerable multiplier effect, enhancing the training of engineering and technical personnel while expediting the transition to the next stage of localization development.
The emergence of a plant with such a key investor will be the most important stage in the development of domestic industry and will be an indicative example for future joint investment projects with South Korea in all sectors of the economy.
The construction phase is anticipated to conclude in 2024, with equipment installation following suit. A pilot launch is scheduled for the first quarter of 2025, and full-scale production is expected to commence in the second quarter.
In a video message, Kia Corporation President and CEO Heo Sung Seong expressed his pride and honor in contributing to Kazakhstan's economic development. He believes the Kostanay plant will play a vital role in providing a unique workspace for citizens, graduates, and engineers for years to come.
“I strongly believe that the new Kostanay plant will play an important role in providing a unique workspace where citizens, university graduates, and engineers can gain a higher level of work experience for many years to come,” said Kia Corporation president and CEO Heo Sung Seong shared.
Kia also confirmed its support for Kazakhstan's industrial policy, actively working to establish a localization center in Kostanay. This center, in collaboration with small and medium-sized businesses, will manufacture auto components.
Kumar Aksakalov, the hokim (mayor) of the region, is optimistic about the plant's impact on the automotive industry, expecting a multiplier effect on regional development.
"The development of mechanical engineering will have a multiplier effect on the development of the region. In particular, the creation of one job in mechanical engineering will lead to the creation of five to six jobs in related industries," he stated.
Republic of Korea Ambassador to Kazakhstan, Tae-ik Jo, highlighted the longstanding partnership between the two countries, emphasizing their commitment to practical economic cooperation. He noted that these efforts align with President Tokayev's economic reforms, focusing on diversifying the nation's industry through manufacturing development.
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