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Heavy work: brick industry progress in Central Asia

This extracted article is re-produced with the kind permission of Asian Ceramics magazine (www.asianceramics.com). For the full story, simply contact the team via enquiries@asianceramics.com

All five Central Asian countries, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, have been shifting from their traditional brick production to the upgraded ceramic building brick manufacturing. As a result of booming building and construction markets of quality bricks and ceramic building items, driven by the recent improvements in living condition and faster urbanization, as well as the need to conserve energy and eliminate environmental pollution, the brick industry has shifted to a far more automated route of production.

Larger plants are coming up in Kazakhstan and Uzbekistan to manufacture 20 million to 120 million pieces per year of various types of ceramic bricks, decorative and facing bricks, insulating bricks, paving bricks and many others. The plants and machineries are procured from Europe as well as Russia. In Kazakhstan, there are good and promising initiatives in the construction sphere like building of a brick plant with the capacity of 120 million bricks a year.

Like the larger economies of Kazakhstan and Uzbekistan, in smaller markets of Kyrgyzstan, Turkmenistan and Tajikistan, traditional small and medium brick manufacturing enterprises (SMEs) are being replaced and modernised by the machine made operation.

SME operators are installing cheaper Chinese plant and machinery that produces 2-12 million bricks per year at significantly lower investment and employment of small number of workers that ranges from 20 at the lowest level. The machine made manufacturers in high wage Kyrgyzstan said their production cost at smaller plant is viable as they do not require highly skilled and expensive workers like those of larger plants.

The larger manufacturers are operating skillfully with profits and also looking for exports to the large neighbouring country of Russia as production and transportation cost is competitive to sell in the border regions of the Russian Federation, where Russian bricks are less competitive.

Cross-border trade

Kazakhstan’s modernization in brick production has opened a new opportunity in the vast cross-border trading with Russia, specially, riding on the liberalization of trade and tariff. “We are expecting a booming cross-border brick trade with further reduction of import duty and local tax structures,” said Amangeldi Smailov, General Director of ENKI (Enki) TOO LLP, the largest and ceramic brick manufacturer in Kazakhstan, based in the region or province of Akmola.

ENKI (Enki) TOO is a modern brick factory, equipped with high-tech equipment and well trained workforce of some 265 people. It meets the need for quality building materials in Kazakhstan. Constructed in 2010, the plant’s production lines are installed with machinery supplied from SOLINCER SL and TALLERES FELIPE VERDÉS of Spain.

It is the largest brick manufacturing plant for the production of ceramic bricks in Kazakhstan. The company claims the plant is one of the three best in the CIS of the former Soviet Union. The plant was launched in 2010 under the programme of PFIIR in Kokshetau. Its production capacity is 60 million pieces of bricks per year. ENKI says, geographically, its distribution covers from Uralsk to Ust-Kamenogorsk and to Shymkent from Kostanai.

In 2012, the plant ENKI, known as Kokshetauskiy brickworks, entered the Russian construction markets after a lot of efforts in face of tariff and non-tariff barriers. The challenge is still there after two years of continuous consolidation work in the markets. In cross border, and inside Russia, an uniformed trading systems bilaterally or under regional trade grouping of the bordering countries is needed for hurdle-free exports, ENKI suggests.

All stages of the production process is automated and controlled by computer technology. Drying and firing of bricks are made with ​​gas that eliminates the pollution with industrial wastes. The investment project was implemented with the support of JSC Astana Finance.

The ceramic brick plant located at Kokshetauskiy, in Akmolinskaja (Akmola).

manufactures bricks of various types with modern equipment of advanced technologies. Its shaping and firing provide finest quality. The products are resistant to extreme temperatures. Its production characteristics ensure pollution-free climate in Kazakhstan.

Its operation in Kazakhstan is not only effective in the construction work of modern new buildings, it is also helping the properties stay for a long time and preserve the historic sites. The Kokshetauskiy facing bricks are restoring old buildings and helping acquire a second life.

Using only natural ingredients in the manufacture of Kokshetau kirpicha-loam and white burning clay cleaner format, the produced materials have been successfully used for the restoration of buildings of historical and cultural value, and also to impart an aesthetically attractive appearance, the same type of buildings of the Soviet period.

"The production lines of the company Solinser made ​​in Spain are latest in brick making technology. All stages of the production process are automated and controlled by computers, and there are highly advanced clay depositories and tunnel furnace. Bricks are baked with gas, which eliminates pollution and wastes in production," said ENKI

General Director Smailov.

"Because of high quality of our products, in addition to the domestic and Central Asian markets, we have ventured into the Russian markets aggressively. the ENKI products have won recognition in Russia and Europe in terms of quality and textured performance,” said Smailov.

“We have been exporting to the Omsk region at least five percent of the total production and going to expand it to 10 percent, or at least supplying 5-6 million bricks. We are also expanding the markets further, to the Tyumen region. Last year we have opened two dealership networks in Omsk and Tyumen, ENKI-Omsk and ENKI-Tyumen," he added.

Customs issues

Joining the Customs Union in the region was a big plus for ENKI as to the issue of transporting the goods to the Russian Federation in terms of smooth supplies. Now no problem in transportation by railway or overland haulers. No waiting for transshipment and delivery, and hauling through highway or railway is much easier than the past.

"Earlier,” said Smailov, “going to the nearby markets was difficult as cross border trade was not friendly enough. Transportation and delivery were troublesome causing wastage of time and money. We had a long wait for haulage, transshipment and delivery in places, because of trade barriers and absence of cooperation between the two countries' transportation and traffic systems. In railway transportation, there were frequent faults and wagon delays. Now, without any problems, our bricks can go all across Russia,” explained Smailov.

"At the moment, VAT is an important issue to us as it is a hurdle in competition against the bricks of Russia and other countries inside Russia. Everyone who comes to border markets is immediately faced with the problem of higher value added tax (VAT), which is 18 percent, compared to 12 percent in Kazakhstan,” he said.

"It turns out that in the Russian market we are less profitable, because payable on higher VAT. This leads to higher prices for our products automatically and of course on effort of its competitiveness. We expect the issue of leveling rates only a matter of time. This within Eurasian Union should definitely be resolved," he argued.

Flagship status

The ENKI TOO brick industry is the flagship brick manufacturer in Kazakhstan. It is the only company in the country for the production of large format building brick. It offers builders more than 20 kinds of products, which are considered one of the best bricks in the former Soviet Union. The bricks are with smooth and grooved front surface with sharp, rounded and shaped corners. ENKI can produce more than 40 kinds of various shaped bricks with different colours and flexibility of switching to production of various other relevant products.

In the manufacture of heavy clay products with modern technologies and equipment, rigidly enforced processes and product quality, the plant has vast sources of raw clay whose quality is confirmed by laboratory studies and analysis of companies in Spain, Germany and the Russian Institute of Building Materials VNIISTROM them P Budnikova. The plant now utilizes more than 90 percent of its installed capacity and producing 55 million pieces of high quality bricks a year.

For its quality and production efficiency, it was awarded "Gold Medal SEIN, Paris, France (2013); Medal for leader of Kazakhstan 2013, forum enterprises-economic leaders, Russia, Ukraine, Kazakhstan and Belarus; "The European Grand Prix for quality ", Geneva, Switzerland (2013); International award for best Enterprise with the rank of Top Manager of the Year, Oxford, UK.

The company is expecting to increase the output of bricks by utilizing full production capacity to export more bricks to Russia, raising sales in Russian markets to 10 percent or more from the current five percent of the total. It will exploit the export opportunity in the Russian markets as well as in the neighbouring countries, particularly in the Russian Federation, according to Smailov.

The company said it has successfully developed and expanded the range of consumers in Northern Kazakhstan and the Urals and Western Siberia, because of the economic feasibility of the export sales of ceramic bricks up to 1,000 km. Besides supplying the bricks to the whole home province of Akmola, the delivery shipments go to Aktobe, Atyrau, East Kazakhstan; Karaganda, Kustanais'ka, Kyzyl-Orda, Pavlodar, North Kazakhstan, South Kazakhstan, and Omsk, Kurgan, Tyumen, Chelyabinsk Oblast and Altai Krai in the Russian Federation.

Last year, the ENKI launched a new optional equipment, fine grinding rollers WFZH8120D (equipment supplier HANDLE, Germany) to manufacture 50 tons per hour. The equipments are used for fine grinding of ceramic raw materials to the fraction of not more than 0.8mm and can improve the texture and quality of the products to give it more attractive appearance. Due to full automation, other equipments in operation also help give the bricks a distinctive superb look.

Kazakhstan is the largest economy among the five Central Asian countries. It has the region’s second largest population of nearly 19 million people, after Uzbekistan’s more than 30 million. The country has the biggest capacity to help provide housing to the people, but it is deficit in the basic building materials like bricks.

Domestic brick manufacturers, with some 41 major brick plants with total production capacity of producing about 500 million pieces of bricks per year, meet some 58 percent of the country’s brick requirements, while the remaining 42 percent is met by imports.

Among the brick plants 15 are silicate brick plants with a total production capacity of some 350 million pieces of bricks per year while the two facing brick plants have a total production capacity of some 60 million pieces a year. One of the facing brick plant is located in Almaty region and the other one in the Northern Kazakhstan.

Silicate brick is being produced mainly in Northern and Eastern Kazakhstan, where silicate’s main deposits are located.

Brick manufacturing was never well planned in the country in the past as a result Kazakhstan was largely dependent on the imports from the neighbouring bordering countries under former Soviet Union. During the Soviet period, the brick plants were localized mostly in the northern and eastern parts of Kazakhstan. Brick plants started coming up in the oil and gas rich western Kazakhstan from the last decade as some new brick manufacturers launched brick production there. In that area, the construction of a bricks plant with the capacity of 30 million bricks per year is expected to be completed in the third quarter of 2015 as well.

Still the area is dependent on supplies of bricks from the northern and eastern parts of the country. Naturally, the area’s demand was catered by the imports, particularly, due to higher cost of transportation from the eastern and northern provinces where most of the country’s urbanized areas, the main consumers of bricks, are localized.

Besides, the country’s largest city and flourishing commercial centre, Almaty, in the south-east, was the most attractive growth centre for the brick manufacturers. Almaty city with a rising population of over two million and its adjacent urbanized areas, accounting for some 15 percent of the total population, or about a quarter of the nation’s urban and semi-urban dwellers alone, created a demand for consuming about two thirds of the total bricks produced in the country.

Like the western provinces, the southern provinces are also now attracting brick manufacturers under the government initiative to spread the brick manufacturing all over the country for a balanced urbanization and housing growth. Recently, a new brick factory, KSM-Kurylys LLP, was launched in Baizak district of Zhambyl region in the area.

In Kazakhstan, most of the ceramic brick production is concentrated in the regions in the north, the east and the south-east. Sources in the industry said, 35 percent of the ceramic brick plants are located in Almaty region in the south-east. An equal amount of 35 percent of the ceramic bricks are produced in the north, including Akmola region, where the country’s capital city, Astana, is located. 15 percent of the plants are in the east, 10 percent in south and five percent in the western regions, according to the production capacity.