Another Brick in the Wall: Brick Production in Kazakhstan

Currently domestic producers provide 58% of brick supply in Kazakhstan, while importation counts for 42% of the supply.

Total number of brick plants in Kazakhstan counts for:

• 41 ceramic brick plants with total capacity in 397 mln pcs per year
• 15 silicate brick plants with total capacity in 348 mln pcs per year
• 2 facing brick plants with total capacity in 60 mln pcs per year

The brick plants are located irregularly in Kazakhstan’s territory:

1. Since the USSR period Northern and Eastern Kazakhstan have the most of the brick plants
2. There were no brick plants in Western Kazakhstan until the 2000s when few new plants were built there, but this fast-growing oil and gas area still meets with lack of brick (that are being transported there from Northern and Eastern Kazakhstan, that increases pricing)
3. Since the USSR period there are many plants in Almaty area – but due to a fact the city consumes up to 60% of the country’s bricks it meets now with lack of bricks
4. Southern Kazakhstan (in west to Almaty) is also meeting with lack of brick as there were only few small plants there; in 2003-2005 they launched a new plant in Zhambyl with 30 mln pcs capacity

Production by brick type is also distributed irregularly:

1. Most of the ceramic brick production is concentrated in the northern and southern parts of Kazakhstan: 35% in Almaty area, 10% in Southern-Kazakhstan area, while Eastern Kazakhstan produces only 15% of ceramic brick, Northern – 35%, and Western – only 5%; such location is determined with clay deposit location
2. Silicate brick is being produced mainly in Northern and Eastern Kazakhstan, where silicate main deposits are located
3. Facing brick is presented with 1 plant in Northern Kazakhstan and another – in Almaty area.

There are no brick plants owned with foreigners in Kazakhstan (i.e. foreign portfolio investors may have shares in few plants – but there are no plants owned with brick global producers); there are no “brick holdings” now in Kazakhstan – i.e. companies that own more than 2-3 plants and make nationwide supply. From a point of view of business concentration Kazakhstan stands at the initial stage – and main M&A processes in the industry are in the future.