It is easy to describe a regional economy through individual indicators: how much investment has been attracted, how many plants have been built, or how fast gross regional product has grown. In Kostanay Region, that approach is already giving an incomplete picture.
In recent years, automotive manufacturing has expanded, localisation has increased, metallurgy has been modernised, agriculture has moved towards deeper processing, and new energy and logistics capacity has been built—all at the same time. As production changes, so do requirements for skills, education and the urban environment.
The key question therefore is not only how many new projects have appeared in the region. More important is whether they are beginning to form a system in which growth in one sector creates demand and opportunities for others.
That may be where Kostanay Region’s next source of growth lies.
The economy is becoming more complex
The structure of the regional economy has already changed noticeably.
Over the past decade, industry’s share of gross regional product rose from 20.4% to 34.9%, while construction increased from 5.8% to 7.9%. The overall share of the real sector grew from 38.8% to 52.5%. Economic growth accelerated from 2.6% in 2023 to 8.3% in 2024 and about 8.2% in 2025.
More than KZT 2 trillion in investment was attracted to the region in 2023–2025. Private capital accounted for around 80% of this amount, while foreign investment totalled roughly USD 1.4 billion. Over the same period, 23 major industrial and mechanical-engineering projects worth KZT 521 billion were implemented, creating 5,800 jobs.
But the structure of the region’s specialisation is especially revealing.
Kostanay Region now accounts for about 25% of Kazakhstan’s mechanical-engineering output and, at the same time, roughly one third of the country’s exports of processed agricultural products.
These two figures help explain what is happening.
Kostanay is not ceasing to be one of the country’s main agricultural regions, nor is it simply turning into a territory of car plants. Rather, both traditional pillars of the economy are becoming more complex: industrial localisation is deepening, while agriculture is moving towards deeper processing.
In both cases, the objective is the same: to keep more stages of production—and therefore more value added—within the region.
When one plant creates demand for the next
The new logic is most visible in mechanical engineering.
A large automobile plant by itself already brings investment, jobs and output to the region. But the economic effect becomes much greater when nearby facilities begin to emerge that supply it with materials and components.
That is exactly what is happening in Kostanay today.
The KIA plant, worth KZT 131.5 billion, is designed to produce 70,000 vehicles a year and create 1,500 jobs. At the same time, an industrial base is developing around vehicle assembly. The KamLitKZ foundry, with annual capacity of 45,000 tonnes of cast products, supplies components for tractors, trucks and the automotive industry. The same site also hosts automotive-component production for commercial vehicles and a full-cycle facility manufacturing drive-axle reduction gears. Combined investment in these two projects totalled KZT 160.5 billion.
The next link in the chain is the TEHNOPARK KZ localisation centre. It produces cable systems, plastic parts, instrument panels and modular assemblies for Kazakhstan’s car plants. The KZT 17.8 billion project is designed to produce 60,000 component sets a year and create 800 jobs.
In the summer of 2026, this chain gained two additional directions for development.
The agreement with Li Auto covers not only vehicle production, but also the development of engineering capabilities and software localisation. Another project brings together Allur, Qarmet and Kia Qazaqstan: it envisages domestic production of automotive steel and stamping of body parts, with Kazakhstani steel accounting for up to 75% of the body. Design capacity is at least 50,000 bodies a year.
As a result, a chain is gradually forming around final assembly:
metal → casting → parts and assemblies → body → vehicle → engineering and service capabilities.
This is the fundamental difference between an individual plant and an industrial cluster.
The more links in this chain are located within the region and the country, the further the initial investment spreads through the economy: other enterprises receive orders, demand for engineers and skilled workers grows, and new logistics and service activities emerge.
It is telling that the production cluster is already developing its own skills ecosystem. More than 4,200 employees and students have trained through Allur University, 378 college and university students have completed paid internships, and around 1,900 engineers have received production training in CKD technologies.
In other words, the plant is gradually influencing not only industrial statistics, but also the system for training human capital.
The same logic applies in agriculture
Kostanay Region’s second major specialisation is agriculture. A similar process is taking place here, although it looks different.
The region remains one of Kazakhstan’s largest producers of agricultural raw materials. Around 5 million tonnes of wheat are grown here each year—almost a quarter of the national harvest. Milk production exceeds 220,000 tonnes.
But it is becoming increasingly difficult to generate further economic returns simply by increasing the physical volume of raw materials. The emphasis is therefore shifting to the next stage of processing.
Sixteen modern dairy farms are being built. Seven have already been commissioned and another nine are under construction. The new complexes use automated milking, milk-cooling systems, feed monitoring and animal-health controls. After the first facilities came online, milk yields at agricultural enterprises increased by 15.7%.
The next level is processing.
Kazakhstan’s first facility producing powdered mare’s milk using freeze-drying technology operates in Mendykara District. The product is export-oriented, and supply agreements have been reached with Germany. The MILKH cheese plant, with annual capacity of 10,000 tonnes, produces more than 20 types of cheese for both the domestic and export markets.
The economic logic is even clearer in grain processing.
The future Qostanai Grain Industry plant is expected to produce not conventional flour, but starch, gluten, syrups, amino acids, bioethanol and other higher-value processed products. Investment is estimated at KZT 71 billion, with 650 jobs announced.
A calculation cited in regional materials illustrates the logic of this transition: one tonne of grain costs around KZT 85,000, while products obtained after deep processing can be worth up to KZT 500,000.
That is a difference of almost six times.
Of course, this does not mean profits increase sixfold: deep processing itself requires equipment, energy, technology, skilled labour and capital. But that is precisely why it matters for the regional economy. A much larger share of economic activity takes place after the raw material has been produced.
Equipment production, logistics, packaging, laboratories, engineering occupations and financial products begin to develop around it.
The region is also developing agricultural drones, autonomous farm machinery with self-driving systems, and satellite-based crop insurance. Insurance coverage already extends to 259,000 hectares, around 5% of the region’s sown area.
Agriculture is gradually becoming both industrial and technology-intensive.
New production requires new infrastructure
This model has an inevitable next step.
The more processing and industry are concentrated in the region, the greater the demand for electricity and transport. Infrastructure investment therefore begins to support not only quality of life, but directly the economy’s capacity to grow.
Energy provides a good example.
Kostanay Region currently consumes around 3.085 billion kWh of electricity a year, while its own generation supplies about 29.4% of that amount. In other words, a significant share of electricity comes from outside the region.
As industry continues to expand, this becomes a constraint.
Since 2023, the region has therefore been expanding its own generation. New solar and wind facilities have already been commissioned, and the first 40 MW gas-engine power plant is under construction. The largest project consists of 165 wind turbines in Rudny with combined capacity of 1.2 GW. According to regional estimates, these projects could increase green generation capacity from 50 MW to 1.6 GW.
A direct linkage emerges:
new production → higher energy consumption → investment in generation → capacity for further production.
A similar logic applies to logistics.
The Tobyl transport and logistics complex, worth KZT 63.8 billion, is designed to handle 400,000 containers a year. Its launch is expected to increase container traffic through the region fivefold and integrate Kostanay more deeply into international transport corridors.
Land transport links are being modernised at the same time: roads connect the region with Russia, Astana, North Kazakhstan and Aktobe regions; the Centre–West project through Arkalyk and Torgai is expected to provide access to the Trans-Caspian route; and reconstruction of the Zhezkazgan–Petropavl highway shortens travel between regions by more than 500 km.
In a raw-material economy, transport primarily carries output away. In a more complex production system, its role is broader: it must also deliver components, move intermediate goods and provide finished products with access to multiple markets.
The economy is beginning to reshape the city
There is one more link without which the production cycle remains incomplete: people.
More complex industry requires engineers, technologists, IT specialists, managers and skilled workers. Deep processing requires different capabilities from primary raw-material production. New energy and logistics facilities also create demand for specialised staff.
Economic competition is therefore gradually turning into competition between regions for human capital.
Materials prepared for the revision of Kostanay’s master plan describe this relationship through the concept of “economic gravity”: industrial growth creates demand for energy, energy opens opportunities for new production, capital finances economic expansion, and a high-quality urban environment helps attract and retain people.
Around 500,000 square metres of housing have been commissioned in the region each year over the past three years. In Astana, the largest new residential district, more than 150 apartment buildings are planned together with schools, kindergartens, a clinic, a park and commercial infrastructure.
The education system is changing as well. Kostanay Regional University runs a dual-degree programme in IT fields with the University of Minnesota, while an exchange programme in mechanical engineering is being developed with South Korea’s Dong-Eui University. At IQostanay, around 2,000 school students study programming, robotics, engineering and 3D modelling.
This part deserves a separate discussion. But for understanding the economic model, the key point is that the urban environment and education are ceasing to be external additions to industrial policy. They are becoming conditions for its continuation.
Where the multiplier emerges
All of these processes can be viewed separately.
A car plant can be treated as one investment project. Grain processing as another. A wind farm, dry port, university programme or new residential district can each be seen as independent initiatives.
But the potential effect becomes far more interesting when connections emerge between them.
A car plant creates demand for metal and components. That creates a basis for new production. These enterprises need more electricity and logistics. Their expansion increases demand for engineers and workers. New jobs support housing, retail and services. A larger urban market becomes more attractive to new businesses.
A similar chain in agriculture begins with grain or milk. Deep processing creates demand for equipment, technology, energy, packaging, transport and financial services. Higher-value finished products make it possible to enter new export markets, which in turn raises requirements for logistics and production quality.
This is the potential economic multiplier.
It cannot be measured by the number of ribbon-cuttings or the total cost of investment projects. It emerges when one investment genuinely begins to generate the next round of economic activity within the region.
Kostanay Region is now at precisely this stage.
Some of the necessary elements are already in place: major production facilities, processing, private capital, localisation projects, new energy capacity and logistics infrastructure. Others are still being formed.
The main indicator of success over the next few years will therefore not be simply maintaining GRP growth at around 8%.
More important will be how quickly localisation deepens, how many additional processing stages remain within the region, whether local suppliers and service companies emerge around major enterprises, how effectively infrastructure removes constraints on growth, and whether the region can retain the people required by the new economy.
If these linkages begin to work, Kostanay will gain a source of growth that is more resilient than any single large investment project.
The region’s economic engine will then operate not because of one new plant or a record harvest, but because each new element begins to create demand for the next.