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Kazakhstan’s construction sector imports – what gap can your company fill?

While construction work in Kazakhstan continues to surge ahead, it is not producing enough of the materials it needs. This means imports – and with nearly $700 million of building materials coming into Kazakhstan in 2014, as well as huge amounts of wood and metal products used in construction, there is plenty of room for international suppliers to get a foothold in the market.  

We answer some of the key questions about Kazakhstan’s imports in the construction sector – including what products the country imports, where the imports come from, and how you can meet the right buyers to start selling in Kazakhstan.


What are the headline figures?

Kazakhstan imported building materials worth $658.5 million in 2014, according to the country’s State Statistical Service. However, this total does not include major product categories such as wood ($1.4 billion of which was imported) metal ($4.2 billion) and various type of plastics ($5.8 billion), which means Kazakhstan’s total use of imports in its construction projects is much larger than the headline figure suggests.


What are the main types of building products that Kazakhstan imports?

The top building products imported by Kazakhstan from January to August 2014 were Portland cement, industrial glass, various types of ceramics, insulation materials (which has a 40% import share in its supply mix), bathroom ceramics and asphalt mixes. Other key products for exporters are roofing materials and plastic pipes, with an import share of around 25%. European exporters have a strong presence in the ceramics and bathrooms market, and Kazakh specifiers and distributors import 140,000 tonnes of natural and decorative stone every year.

There are also opportunities for suppliers of interior finishing materials – domestic production is almost non-existent, so demand in this sector is entirely met by imports, especially in the floor coverings and wallpapers sector. Adding extra weight to the case for exporting interior products to Kazakhstan is the fact that Kazakhstan imported $1.4 billion worth of textiles in 2014.


Where does Kazakhstan get its imports from?

European countries feature strongly in Kazakhstan’s import structure – France was the sixth largest exporter to Kazakhstan in 2014, selling $1.2 billion worth of goods there, and Italian companies exported a further $1 billion in the same year.  The UK, Spain and the Czech Republic are three other major players, all exporting over $300 million of goods a year to Kazakhstan.


Read more - Country guide: Kazakhstan


Kazakhstan imports 15 times more building materials than it exports. Why?

Several factors explain this. One is high energy intensity – even though Kazakhstan is a big player on the oil and gas scene, energy-intensive sectors like ceramics production can struggle to stay competitive. Worker productivity, which is around 40% lower in Kazakhstan than the OECD average, is another factor.


In what areas does Kazakhstan have a strong production presence?

Even though there are opportunities for exporters across the sector, several production facilities have come on stream in Kazakhstan recently. Two new cement plants opened in western and northern Kazakhstan in 2014, and the recent opening of a complex in Atyrau means Kazakhstan is starting to meet its production needs for sheet glass.


What about construction machinery?

Russia and the Central Asian countries are heavy importers of construction machinery. 61,800 units were shipped to the region in 2013, a fivefold increase from import levels in 2009. Kazakhstan is a major contributor to this total.


Expert opinion – the demand for new building materials

“The most developed production facilities in Kazakhstan are for cement, concrete, and dry mixes. Less developed are facilities for manufacturing new building materials,” said Gulmira Zhusupova, Kazakhstan Institute for Industrial Development, in an interview with kapital.kz. “In other countries, production of building materials involves a high degree of innovation – up to 2% of a company’s turnover can be spent on research, which allows new solutions and materials to be developed. In Kazakhstan, however, as in the rest of the CIS, construction regulations are out of date, excessive even, compared to European or American construction codes. As more and more modern building are being completed in Kazakhstan, new facilities using innovative solutions and materials are appearing. This will lead to increased demand for new building materials.”


What other opportunities are there for international building materials suppliers?

While concrete is generally supplied by Kazakhstani or Russian companies, there could be a gap in the market for exporters that trade on a quality premium – 36% of respondents to a 2014 survey carried out by the Compass business agency said they were unhappy with the quality of concrete building materials available to them for their projects.


Who is the average Kazakhstani importer, statistically speaking? Where are they based?

According to the same survey, 50% of buyers of building materials in Kazakhstan are under 45. Geographically speaking, demand for building materials is strongest in Astana, Almaty, Atyrau and Aktau, which are four of Kazakhstan’s major cities.


How can I make contacts in Kazakhstan’s building market?

As always, meeting the right buyers is the essential first step for entering a new market – and the KazBuild exhibition, held in the country’s largest city Almaty, brings over 10,000 of them together at one venue. The next edition is in September 2015 – find out more about the exhibition and how it can make Kazakhstan your next export market.

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