Kazakhstan Advances in Chemical Industry for Economic Diversification

ASTANA – In a significant move to diversify its economy and bolster self-sufficiency in key sectors, Kazakhstan is intensifying its focus on developing the chemical industry. This was underscored by Minister of Industry and Construction Yersaiyn Nagaspayev during a government meeting on May 5.

Currently, Kazakhstan’s chemical sector contributes approximately 4.6% to the manufacturing industry, playing a crucial role in enhancing related sectors such as agriculture, metallurgy, and building materials production. According to recent reports from the Prime Minister’s press service, the industry achieved a production volume exceeding 1 trillion tenge (around US$1.9 billion) last year.

Key chemical products include various fertilizers, pesticides, phosphates, and industrial chemicals like calcium carbide and polypropylene. Major players in the industry, including KazAzot, Kazphosphate, and the Atyrau oil refinery, are instrumental in meeting domestic demand while expanding export capabilities. Over the past five years, this sector has showcased a steady growth trajectory, averaging an annual increase of 5%.

As Nagaspayev pointed out, the government has implemented several supportive measures aimed at fostering growth in the sector. These initiatives include exempting raw materials for pesticide production from VAT, establishing exclusive export rights for ammonium phosphate and ammonium nitrate, and steps to stabilize pricing within the market.

In the first quarter of this year, production in the chemical sector saw a remarkable increase of 12.5%, amounting to 406 billion tenge (approximately US$785 million). The Ministry projects an overall growth of 5% for the year, driven by new projects and heightened production of polypropylene, sodium cyanide, fertilizers, and yellow phosphorus.

A pivotal aspect of Kazakhstan’s strategic vision is ensuring food security. By 2030, the country aims to meet its entire domestic demand for nitrogen, phosphorus, and potassium fertilizers through local production. Planned production targets include 1.5 million tons of ammonium phosphate, 800,000 tons of urea, 700,000 tons of potassium chloride, and 300,000 tons of dicalcium phosphate, which together aim to satisfy 80% of national needs.

Kazakhstan is also exploring the potential of coal chemistry, leveraging its substantial coal reserves through collaborations with partners like CHN Energy and East China Engineering to establish ammonia and urea production capabilities. Furthermore, local coal mining enterprises are engaging with scientific institutions to develop a range of products, including fertilizers, nanomaterials, and specialized fuels.

Currently, there are 49 projects underway within the chemical industry, with investments projected to reach 4.8 trillion tenge (US$9.3 billion) by 2035. As Kazakhstan moves forward with its comprehensive strategy, the development of the chemical industry stands as a cornerstone of its broader economic ambitions.

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