The EDB to finance Kazakhstan’s largest car production

30 August 2018

Moscow, 30 August 2018. The Eurasian Development Bank (EDB) and ASIA AVTO Kazakhstan signed a loan agreement at the Moscow International Automobile Salon on 30 August 2018. The parties agreed on financing a full-cycle car assembly plant being built in Ust-Kamenogorsk in partnership with Russia’s AvtoVAZ.

Andrey Krainiy, Deputy Chairman of the Management Board and State Secretary at the EDB, and Anatoly Balushkin, Chairman of the Board of Directors at the BIPEK AVTO – ASIA AVTO Group of Companies, signed the agreement at the Moscow International Automobile Salon in the presence of Yves Karakatsanis, President of AvtoVAZ.

The EDB will finance equipment supplies for the welding and car body painting shops. The agreement extends a ten-year investment credit for a total of RUB 4 billion.

When commissioned, the first phase of the facilities under construction will manufacture 60,000 cars a year. A technology park to produce car components will be launched next. As more process stages are introduced at the plant, the localisation of car production will reach 50%. The share of parts manufactured in the Eurasian Economic Union (EAEU) will be around 90%.

The Renault-Nissan-Mitsubishi Alliance represented by AvtoVAZ is a strategic partner and minority shareholder in the project. AvtoVAZ holds a blocking stake in the joint venture (25% plus one share). The BIPEK AVTO – ASIA AVTO Group of Companies, as the main investor, owns 75% of shares in ASIA AVTO Kazakhstan.

The principal market for plant products will be Kazakhstan, with an option to export to the EAEU and Central Asia under AvtoVAZ’s control. The new plant will be the largest venture in Kazakhstan’s mechanical engineering sector and Russian-Kazakh industrial cooperation.

Andrey Krainiy, Deputy Chairman of the Management Board and State Secretary at the EDB, stated that, “Two major companies of critical importance to the automotive industries of Russia and Kazakhstan have united to launch high-tech production focused on EAEU markets. The project will help to develop the existing inter-country value chains and create new ones. It has already become a special undertaking in the Eurasian Development Bank’s portfolio, and it will definitely become an exemplary one in terms of its integration effect.”

Anatoly Balushkin, Chairman of the Board of Directors at the BIPEK AVTO – ASIA AVTO Group of Companies, commented that, “LADA’s leadership of the Eurasian Union’s market makes it possible to build our production cooperation with AvtoVAZ in a systemic fashion. In 2017, the brand launched all its lines of production in Ust-Kamenogorsk. As a result, LADA’s sales in Kazakhstan have grown by 70% since the beginning of 2018.

“At the same time, we have entered the final phase of the construction of full-cycle facilities – the building of the welding and painting shops began in July. World-class manufacturers will supply equipment for these facilities. The Industry 4.0 technology they offer will be the first to be introduced in the domestic mechanical engineering sector, and it will boost the performance rates of Kazakhstan’s automotive industry. Paint robots using big data instruments and the Internet of things will be unique in Kazakhstan. Production will be based on the high standards set by the Renault-Nissan-Mitsubishi Alliance.

“Our project is a natural outcome of Eurasian integration. For this reason, our collaboration with the financial institution that promotes integration in the EAEU is a logic decision. The participation of such a strong partner as the Eurasian Development Bank will speed up project implementation and enhance its sustainability.”

The Eurasian Development Bank (EDB, Bank) is an international financial institution established in 2006 with the mission to promote economic growth in the member states of the Eurasian Union, expand their trade and other economic ties, and foster Eurasian integration by means of investment. The Bank’s charter capital is US $7 billion, and its investment portfolio exceeds US $3 billion.

The AvtoVAZ Group is part of the Renault-Nissan-Mitsubishi Alliance and manufactures cars under four brands in full cycle: LADA, Renault, Nissan, and Datsun. The Group has production sites in Tolyatti (AvtoVAZ) and Izhevsk (LADA Izhevsk). Today, the brand is presented by more than 20 models in the B, B+, SUV and LCV segments that are grouped into five families: Vesta, XRAY, Largus, Granta, and 4x4. The brand accounts for a 20% share of Russia’s market in passenger cars. LADA’s official distribution network comprises some 300 dealerships and is the largest in Russia.

The BIPEK AVTO – ASIA AVTO Group of Companies was established in 1992 and is Kazakhstan’s largest automobile holding. The group comprises the ASIA AVTO car assembly plant, as well as distributors and dealerships that sell and maintain Lada, Skoda, Chevrolet, KIA, UAZ and Renault cars. In the first six months of 2018, the group sold 7,800 vehicles, having accounted for 30% of Kazakhstan’s car market.

Kazakhstan’s ASIA AVTO car assembly plant is the largest producer of passenger cars in the country. It was set up in 2002. The plant partners with the world’s leading manufacturers such as AvtoVAZ, Volkswagen AG, General Motors, and KIA Motors. ASIA AVTO produces 60,000 cars a year. The company’s facility in Ust-Kamenogorsk manufactures Skoda (Octavia, Rapid, Superb, Yeti), Chevrolet (Aveo, Captiva, Cruze, Malibu, Orlando, Tracker), LADA (4x4, Granta, Kalina, Vesta, XRay, Largus), and KIA (Carens, Carnival, Cee’d, Cerato, Cadenza, Optima, Mohave, Picanto, Pro Cee’d, Quoris, Rio, Sorento, Soul, Sportage).

ASIA AVTO Kazakhstan is a joint venture set up by BIPEK AVTO – ASIA AVTO and the Renault-Nissan-Mitsubishi Alliance represented by AvtoVAZ to construct a full-cycle car assembly plant in Ust-Kamenogorsk.

BIPEK AVTO – ASIA AVTO’s Press Centre:

+7 7232 560-568 (4);;

The EDB Media Centre:

Alexander Savelyev +7 (985) 765 23 59 (Moscow)                    

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)            

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