100 billion tenge of insurance support, opening of foreign representative offices and other tasks of KazakhExport for 2018

To increase the volume of non-primary exports by half by 2025 — this task has been set before Export Insurance Company KazakhExport JSC. Chairman of the Board of Export Insurance Company KazakhExport JSC, Ruslan Iskakov, told how the work is organized, what projects have already been implemented and what is planned for export development in an exclusive interview to Primeminister.kz.

— Ruslan Viktorovich, it will soon be one year since JSC Export Credit Insurance Corporation KazExportGarant has been transformed into the national company KazakhExport in order to provide assistance to companies for export development within the framework of a “single window.” Tell us about the performance of KazakhExport for the first year? What goals did the company set for itself? What did you achieve?

— Last year, we clearly outlined the perimeter of our mandate, that is, whom we support and what we do. It was decided that we are engaged in providing financial, insurance tools, so that the company, clearly understood in what direction to develop. We determined who we are working with, i.e., they are exporters of processed goods, non-raw materials, manufacturing enterprises and exporters of services. To date, we focus on manufacturing enterprises, processing industries. Secondly, we adapted our product line already to the needs of exporters, i.e., different companies that are at the different stages of the export cycle, some are just trying the market, starting to understand with whom they want to work, with which countries, what they want to export. And the other companies — on the contrary — have found a buyer, they have a full-fledged sales and have no problems finding new customers, but they are already facing new challenges to develop their export potential: the development of their new product groups, the launch of a new line to new markets, accordingly, these enterprises have very different needs.

In 2017, we developed our product line in order to be useful to exporters at any stage of the export cycle, especially since exporters migrate, so to say, from one stage to another, over a period of time. In general, most of the work in 2017 was methodological work, but nevertheless, the support of the exporters themselves did not stop, and we were engaged in the whole year round the regions, met with exporters in the regions, districts, etc. , in order to clearly explain to management, owners of enterprises, what we can do for them, what tools they can use in their practice, how they can implement these tools in their marketing policies, their financial strategy, etc.

At the end of 2017, more than 40 enterprises took advantage of our support.

— The national export strategy sets an ambitious goal — to increase the volume of non-primary exports by half by 2025. What will you advise the business to enhance the development of exports?

— Yes, indeed, the President set the task, to increase the export of processed goods and services twice by 2025, the interim indicator by one and a half times by 2022.

At the end of 2017, processed exports increased by more than 22%. There is positive dynamics, it largely depends of course on metals prices, but nevertheless, there is positive dynamics in the export of final products, too. Particularly, there is a good dynamics in the food industry. Our enterprises that produce food products, for them today, great opportunities have been opened in the Russian Federation. Business today needs more active, more aggressive look at these markets. We are ready to support, and this year a number of certain initiatives will be implemented, which will be directed, among other things, to stimulating the sale of our goods, including to the Russian Federation.

— At an extended Government meeting on February 9, the Head of State noted the important role of KazakhExport in attracting transnational companies to the processing sector. What kind of work has already been started in this direction by your company? Will the work of the national company be reoriented taking into account the recent instructions of the Head of State?

— We are in close cooperation with Kazakh Invest, because they are the first entity that transnational companies meet in Kazakhstan. Of course, when international players come to Kazakhstan, a potential market territory is very important for them. And when our potential investors see that, in addition to Kazakhstan, they can successfully trade from here not only to Central Asia, but also see a certain potential for trade in China, especially in the western regions, and even more huge potential in Russia, where, due to sanctions, many European and American enterprises cannot enter. They are interested in this market, they do not want to lose it, so Kazakhstan is very interesting for them from this point of view. And, of course, it is very important for them to understand at the entrance if they create businesses here, how they will trade in neighboring markets, what support tools they can use here, that's why we always participate in all major events organized by Kazakh Invest, we inform investors that we can offer, what tools can be used, because to us, no matter who is a shareholder of the company: Kazakhstani or foreign investor, for us they are all equally interesting and priority. The main criterion for us is the production of commodities with high added value, so that it is non-raw goods, processed goods or the export of services.

— In August last year, when the National Export Strategy was adopted, the Minister of National Economy Timur Suleimenov announced that the representative offices of the national company KazakhExport will be opened in all regions of our country. What work is being done in this direction? If they are open everywhere, how can a business enter these departments in the regions?

— We conducted a comprehensive analysis of how to build work with the regions. So, except that we visit regions regularly, we meet directlywith exporters, of course, we need someone so to say on the ground.

For today in regions the infrastructure big enough which covers practically all sectors, all segments of business, in different branches is created. I.e., for example, our colleagues from the Damu Fund have branches in all regions and their service centers for entrepreneurs, of course, can provide consulting services, provide information, and we started this work last year. Atameken NCE has the similar infrastructure on the scale of coverage. With the NCE we are also in close cooperation, and this year we will conduct training for consultants of both the Damu Foundation and the Atameken NCE so that their people who are in direct contact with entrepreneurs today can give a full consultation , including our products. And then we will organize communication for the exporter directly with our employees, which will be assigned to each region, will be located in the central office and will be able to work.

In principle, today such a communication channel is built and already works, and it works quite efficiently, because if we look at our client base, we have customers, enterprises that are serviced and receive support in each region. And the difficulty is that their counterparts — their managers of our company is thousands of kilometers away, constitute barriers. Today, the world of digital technology, it allows all these distances to be reduced in time scales to seconds.

The second direction we are doing in the framework of the Digital Baiterek project is creating a single window. In general, this project is part of the larger project of the Atameken NCE. What does it give? An entrepreneur within a single portal can see all the tools for supporting all development institutions not only of the Baiterek holding company, and in a separate section of exporters, a number of services have already been implemented on this portal, i.e. he will be able to use the necessary service through this portal. Today there is no need to go to the PSC even in your city, you can use the service without leaving your office and today it already works. We will continue to develop this infrastructure in order to become even closer to the entrepreneur.

— Tell us about the most vivid examples of projects that have been implemented.

— For example, in Almaty region there is a large factory for the production of automobile batteries and the geography of exports is very wide, i.е., it is not only the CIS countries and not only Russia, but also far abroad.

In Shymkent, we have a client, whom we found in an interesting way. While on a business trip in the Russian Federation, our employee in the store saw bed linen produced in Kazakhstan, photographed the label and through the contacts found this entrepreneur. We talked about our tools and he shared his problems. He says: "I produce bed linen, I worked with IKEA for a year and signed a contract. IKEA buys everything I produce from me, but I do not have enough working capital." We offered him a tool, pre-export financing, now his sales growth is very impressive. For us it was also interesting, that the entrepreneur independently worked with such a large company, provided a quality product, but there were internal problems. Such interesting stories arise in different regions.

— As far as is known, the opening of several foreign missions was planned. In which countries do they already exist or is this work still in the stage of formation?

— In the second half of the year we will open the first wave of representative offices in accordance with the export strategy of Kazakhstan, where the markets are distributed according to priorities. Of course, the first wave will still be Western China, these are the regions nearest to our borders, most likely it will be Urumqi. In order, first, to overcome language barriers, which, among other things, our entrepreneurs face. And working with China is quite difficult, from the point of view of understanding, gathering information, etc. Therefore, there is always a person in the place who knows the domestic market, knows the business community, who will talk daily with local entrepreneurs, talk about what opportunities are available, at the same time give feedback, i.e. our entrepreneurs about what we can offer or what is expected of us.

The second direction is the Russian Federation. We will have three representative offices in the border regions: the Siberian, the Urals and the Volga region. We see from our portfolio a lot of contracts of our entrepreneurs with Russian buyers in these regions, and the potential is very large.

We tried to negotiate direct with one of the retail chains of Tatarstan, they were surprised by the potential we really have. We organized a meeting in Kazakhstan with 40 food and light industry enterprises. For them it was a discovery. Now about 10 enterprises ship their goods. And we will develop relations in this direction, offer our tools in order to stimulate sales both with this trade network, and with others in other regions.

And, of course, Central Asia and the Caucasus are priority markets.

In 2019, a representative office in Iran will also be opened.

— 2018 has started, work has already been carried out for two months, but what are the main tasks for the current year you set for the national company, and what will be done by the end of the year?

— The main objective or main indicator is the amount of support that we provide to exporters. If we compare the figures that were in 2014, the volume of support was provided in the amount of 5.5 billion tenge per year, in 2017 we provided more than 40 billion tenge, then this year we must provide about 100 billion tenge of insurance support. This is a key indicator.

The second is system work. First, we need to transfer our head office from Almaty to Astana in order to be closer to Baiterek Holding, because we have a lot of tools that we implement together, for example, with DBK (Development Bank of Kazakhstan), a number of exporters use our joint products. Secondly, we have a new program started in 2017 with the agrarian-credit corporation, and two deals have already been implemented there. Now a whole plan of projects has been formed in those industries that we intersect, i.e. this is a manufacturing industry where raw materials are processed.

Thirdly, there will be opening of representative offices abroad. This is quite a large and laborious work.

Well, fourthly, this is the digitalization work that we are doing, including in conjunction with the Baiterek holding company, i.e. the development of a “single window,” a digital portal, so that our exporters can use the services through the Internet without leaving the office.


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