Project

This investment project (the "Project") plans to produce explosive materials with a capacity of 33 thousand tons per year.

Company

The investor in this project is KAZ EXPLOIT SERVICE LLP.  The company has been allocated a 15-hectare site on which it will build an 800-square-metre explosives warehouse, a 400-square-metre modular mobile building, a 1000-square-metre warehouse for the storage of raw materials, and a 1000-square-metre area for the repair of equipment.

At present the company has invested 2.2 billion tenge of its own funds. 

It is necessary to allocate another 10 hectares of land for the expansion of production and investments in the amount of 1 billion tenge for the automation of the packaging process of finished products and for the design and construction of an assembly plant, for the release of start-up funds.

Market

At the moment, there is a shortage of products in the domestic market of Kazakhstan, for this reason, all manufactured products are sold on the domestic market.

The growing demand for explosives. 

The total volume of the explosives market in Kazakhstan is estimated at USD 350 million per year. The total consumption of explosives is about 500,000 tons per year. With the development of new metal deposits, consumption is expected to grow by 7-10% annually. 

Import substitution. To date, the company produces granulate, patronized explosives, pumped explosives with an emulsion content from 75 to 100%

Possible investments will allow the launch of a plant for the production of non-electric initiation systems in the country, which helps to reduce import dependence on other countries.

Investment attractiveness of the project: 

Investments - 1 035,5 mln. tenge

The NPV of the Project is more than 16 500 mln. tenge

MIRR–more than 100.0%

EBITDA yield–55.9%

Payback period -4.20 years

What is the attractiveness of the project?

• Economic benefits: Explosives are used in various industries such as mining, construction, and defense.
• Technological innovation: The manufacture of explosives requires advanced knowledge in chemistry, physics and engineering. Projects in this area may include the development of new technologies to improve the effectiveness and safety of explosives, which may be of scientific and technical interest.
• High availability of export markets. Our region borders Russia. 
• Relatively high profitability. 
• Relatively low investment requirements.

Investment proposal

The project requires funding of 1 035,5 mln. tenge, including 100% participation of the investor.

The proposed financing structure is indicative, the final structure of financing and participation in the project will be determined by the results of joint negotiations with the investor.