Client Background

The client is a well-known domestic building materials manufacturer, specializing in new wall materials and high-performance insulation boards, with an annual output value exceeding 500 million yuan. With the slowdown in the domestic real estate market, the company has turned its attention to the Central Asian market, planning to establish a production base in Kazakhstan to supply the local and Russian markets. However, facing an unfamiliar investment environment, the client has numerous concerns: a lack of understanding of Kazakhstan's foreign investment policies, land acquisition, and tax incentives; unfamiliarity with local labor laws and employment practices; uncertainty about the local supply chain capabilities; and difficulty in predicting the construction period and costs. How to smoothly transition from "product export" to "production capacity establishment" has become the most challenging problem for the company's decision-makers.

LEO Solutions

In response to the strategic needs and practical pain points of its clients, Leo established a dedicated service team for Central Asia, providing full-chain support from site selection to production launch:

Localized production implementation: Choosing the right location and timing

Based on a thorough understanding of Kazakhstan's industrial landscape, the LEO team assisted clients in conducting comprehensive evaluations of multiple candidate regions, including Almaty, Nur-Sultan, and Shymkent. A quantitative comparison was made across dimensions such as logistical convenience, industrial support, labor supply, and policy support, ultimately recommending the Almaty Industrial Park. We accompanied clients throughout the park's site visits, liaising with park management and government investment promotion departments, successfully securing policy support such as land incentives, corporate income tax reductions, and import tariff exemptions for equipment. During the factory construction phase, LEO coordinated with local design institutes, construction companies, and supervision agencies to ensure the project met local regulations. During the production line installation and commissioning phase, we dispatched engineers to provide on-site support, ensuring smooth equipment operation.

Quality Management Export: Enabling "Chinese Quality" to Continue Overseas

The client's core competitiveness lies in product quality, making it crucial to replicate their domestic quality control system in Kazakhstan. LEO's quality expert team delved into the client's domestic factory, comprehensively reviewing production processes and key quality control points. Combining GOST standards and local certification requirements, they tailored a quality management system specifically for the client's Kazakhstan factory. Standardized operating procedures were established for each step, from raw material inspection upon arrival and production process control to finished product testing before shipment. Simultaneously, we provided systematic training to the locally recruited quality inspection team to ensure the effective implementation of quality standards.

Technical training: teaching people how to fish, and building a localized team.

Language barriers and cultural differences are another major challenge in establishing production capacity. LEO selected three experienced technical engineers from the client's domestic factory to be stationed at the Kazakhstan factory for three months, providing hands-on training to local operators. The training covered equipment operation, process parameter adjustment, troubleshooting common problems, and safety production regulations, using a combination of theoretical explanation, on-site demonstration, and practical guidance to ensure that each local worker could work independently. After the on-site training ended, LEO also established a remote technical support mechanism to answer technical questions encountered during production at any time.

Logistics support: facilitating the supply of raw materials and the export of products.

After the production base was established, raw material supply and product shipment became the core of daily operations. Leo designed an integrated logistics solution for its clients: domestic consolidation + cross-border transportation + local delivery. Core raw materials produced in the domestic factory were centralized in a designated warehouse and transported to the Almaty factory via the Alashankou border crossing. Locally sourced auxiliary materials were sourced from suppliers and their delivery was arranged by the Leo team. Finished products, once shipped, were distributed to various parts of Kazakhstan and the Russian market through LEO's Central Asia logistics network. Full-process visible tracking ensured a stable and smooth supply chain.

Results Showcase

With the systematic support of Leo, the client's Kazakhstan factory progressed far faster than expected from decision-making to production:

• Factory construction cycle: From initial site visit to trial production, it took only 10 months, 40% shorter than the industry average.

• Policy support: Successfully applied for 5 years of corporate income tax reduction and exemption, and import equipment tariff exemption, with a total benefit of over 2 million yuan.

• Production costs: down 18% compared to domestic production, mainly due to optimized transportation costs and tariff avoidance.

• Localization rate: Within 6 months of production, the local sourcing rate reached 42%, enjoying additional tax benefits.

• Quality Management: Products passed GOST certification on the first attempt, with a 100% pass rate in local market spot checks.

• Team building: Train 8 local technical backbones and 30 operators, and achieve localization of the management team.

• Market Response: Order delivery time has been reduced from 45 days for domestic exports to 7 days, resulting in a significant increase in customer satisfaction.

• Capacity expansion: The first-year capacity utilization rate reached 75%, and the output value exceeded US$6 million.

Customer testimonials

“From initially just wanting to sell our products to Central Asia, to now truly establishing a factory here, Leo has helped us achieve a qualitative leap. They not only understand policies and the market, but also every detail of manufacturing implementation. It can be said that without Leo, our Central Asia factory could not have been built and put into operation so smoothly.”—— General Manager of the Customer's Factory

Case Insights

This case vividly illustrates the core value of LEO's "Manufacturing Support" service: it's not just about selling products, but also about helping companies "manufacture and improve" overseas. For manufacturing companies, expanding production capacity overseas is a more complex and systematic project than exporting products, involving a series of challenges such as site selection, compliance, construction, recruitment, training, and supply chain restructuring. Leveraging its own manufacturing background and 20 years of experience in the Eurasian market, LEO has become the most reliable "implementation engineer" for companies in the process of establishing production capacity. From "selling products" to "establishing a foothold in Central Asia," LEO has walked alongside its clients every step of the way.