Samsung wants to substitute Russia as the regional distribution hub

Samsung, a tech giant from South Korea, is weighing the idea of relocating its logistical hub in the CIS region to Kazakhstan, according to Bashtay Omerbek, head of the export promotion department under the Ministry of Trade and Integration.

Before the war in Ukraine, the company used to rely on Russia in the distribution of its smartphones and other devices across CIS counties. However, when Russia started its invasion of Ukraine, many well-known tech companies stopped supplying their products to Russia. The government of Russia responded by legalizing gray imports in the country.

«Now we are negotiating with Samsung about the distribution of smartphones. This means that Kazakhstan may serve as the regional hub instead of Russia for the distribution of Samsung smartphones in Central Asian states. We can turn into an entry point for Central Asia and the CIS,» he said.

The official also noted that many Russian businesses have actively recently relocated from Russia to Kazakhstan.

«Russian businesses are actively migrating to our country. They produce different things here, although the final destination for the vast majority of their products is Russia itself. However, Kazakhstan has also benefited from this situation by getting more taxes,» Omerbek stated.

Earlier this year the government planned to reach the bar of $22.4 billion in exports of processed goods. Now, this forecast is even more optimistic.

«Over the first seven months this year, we exported $14.3 billion worth of processed goods. Given that we have accumulated loads of goods during the pandemic, we can now increase our exports. In 2022 we can earn $23-24 billion by exporting goods. This is four billion more than last year ($19.8 billion),» he said.

Over the first six months, Kazakhstan exported 200,000 smartphones for $79.9 million. This is a sharp increase compared to just 611 devices ($40,600) over the same period last year.