Kyrgyzstan had a couple of prominent stories in the press towards the end of December 2023 with news of a new plant and continuing data showing that cement production has grown.
Chüy’s allocation was first announced through the government in mid-2022, when it signed an investment agreement with a consortium consisting of representatives from Terek-Tash and ZENIT. More details about the unit emerged this week when the Russian-Kyrgyz Development Fund revealed that it had provided a $45 million loan to the project founded in the northern region of Chüy. The plan is to build a 1. 7 Mt/year plant with a budget of $160 million. The special features of the order are the installation of a heat recovery unit and the use of ash from the Bishkek thermal power plant in the production process. The plant is expected to be operational in 2024.
Figure 1: Cement in Kyrgyzstan, 2018 – 2023. Source: National Statistical Committee of the Kyrgyz Republic.
One explanation for why the government might need to build a new plant is that cement production has generally increased in each of the past five years, with the exception of 2020, when the Covid-19 pandemic began. In 2022, it increased by as much as 7% year-on-year to 2. 7 Mt and the latest data from the National Statistics Committee indicates that it increased by 11% year-on-year to 2. 6 Mt in the 11 months to the end of November 2023. If this rate is maintained in December 2023, the country will most likely have produced just under 3 million tonnes in 2023. At the same time, the country’s cement exports have also declined. In November 2023, the government of Kazakhstan’s Jamthroughl region said it had discovered investors for the structure of a railway line between the region and Kyrgyzstan due to a “structural boom” in the latter country.
In early 2023, the Eurasian Development Bank (EDB) announced that it had set aside $48 million for equipment upgrades at the Kant Cement plant, operated through United Cement Group (UCG), founded in Kazakhstan, also in the Chüy region. The plant is the largest in Kyrgyzstan, with five rain production lines, according to the Global Cement Directory 2023. The EDB linked its investment to a hydroelectric project in the country that it also finances, highlighting that such structures require a lot of cement. and concrete. This follows a previous plant upgrade task carried out through owner United Cement Group (UCG), founded in Kazakhstan, from 2021 to March 2023. These involved power and environmental gains, such as the installation of bag filters and the conversion of a cement mill to a closed circuit. China Triumph International Engineering, founded in China and a subsidiary of CNBM, the main partner of the task. In early December 2023, UCG announced that it had signed another contract with China Triumph International Engineering over the summer to build a new dry production line at the site with a capacity of 0. 8 Mt/year of clinker. At the time of the announcement, he reported that site preparation had begun and painting had begun to install the pile foundation.
Finally, another focus of Kyrgyz news in recent months was the announcement in October 2023 that the government had nationalized the Kurmentinsky cement plant in the Issyk-Kul region. The explanation for why this was unusual in that it indicated that a 93% percentage of the company operating the plant had been transferred to the State Agency for Domain Management following the death of its former owner. The previous owner, Kamchybek Kolbaev, an organized crime boss who was listed in the U. S. State Department’s Transnational Organized Crime Rewards Program, was a member of the U. S. Department of Homeland Security. He was killed by the U. S. Department of State Security in early October 2023. The remaining percentages of the plant have been transferred to its employees and the government has further stated that it intends to modernize the site.
The cement sector in Kyrgyzstan is small and in need of modernization. This sector appears to be experiencing a resurgence, with production expanding and at least two primary factory projects underway. The country occupies an attractive economic and geopolitical position given its club in the Russian-backed Commonwealth of Independent States (CIS) and its proximity to China. A number of projects supported through the country’s Belt and Road Initiative, existing or future, appear to benefit from more effective local cement production and higher volumes.
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