South Korea-based automobile manufacturer Kia has started building a new full-cycle plant in Kostanai, Kazakhstan, in its first direct investment project abroad.
Kia has allocated around $250m for the project in Kostanai, which will begin production in the first quarter of 2025. The plant is expected to create 1,500 jobs and have an annual output of 70,000 cars.
Construction will be completed in 2024 and followed by equipment installation.
The announcement came as the government in Astana is struggling with foreign duirect investment (FDI) figures. According to data provided by the International Monetary Fund and cited by World Bank, net FDI inflows in the country have been on a downward trend, going down from a record $17.22bn in 2016 to $4.91bn in 2022.
In the past 12 months, several car manufacturers have announced their plans to invest in Kazakhstan. In September 2022 Great Wall Motor (GWM) signed a memorandum of intent with Astana Motors for a knock-down kits assembly cooperation. The memorandum came after GWM’s Haval brand was launched in the central Asian country in April 2021.
Kumar Aksakalov, the Governor of Kostanai, stated that Kia’s investment would impact other industries in the region.
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“One job in mechanical engineering will lead to the creation of five to six jobs in related industries,” Aksakalov said.