Offtake contracts for 58 billion tenge signed by subsoil users and domestic commodity producers at Astana forum

Prime Minister of Kazakhstan Alikhan Smailov took part in the Kazakhstan-Produced Content 2.0 international forum held in Astana. During the large-scale event subsoil users and domestic producers signed agreements and off-take contracts for 58 billion tenge. 

Within the framework of the forum with the participation of foreign investors and more than 2 thousand delegates from all regions of the country, the possibilities of expanding the localization of goods, works and services for the needs of sectors of the real economy of the Republic of Kazakhstan, as well as the prospects for further development of subsoil use, coal industry, transport and energy are discussed. 

On the eve of the plenary session of the forum, the Head of Government got acquainted with the digital exhibition "Prospects and opportunities of domestic commodity producers on localization of production". It presents the best samples of products of Kazakhstan machine building, furniture and woodworking industry, construction materials, goods of chemical industry, advanced solutions in the field of engineering communications, etc. In total, more than 100 companies operating in various branches of the manufacturing industry are represented at the exhibition.

In his speech at the plenary session, Prime Minister noted that the economy of Kazakhstan has adapted to the external conditions of recent years and entered the trajectory of sustainable growth. In particular, for 10 months of the current year it amounted to 4.9%, positive dynamics is observed in all major industries. 

"Thanks to the actions of the Government and the National Bank, inflation has slowed down to 10.8%, i.e. 2 times. We have a task to further reduce it. Within the framework of the relevant Package of Measures, one of the main directions is to increase domestic production," Alikhan Smailov said. 

According to him, development and support of entrepreneurship is one of the main directions of the Government's work. Therefore, problematic issues of business are regularly discussed together with the Atameken National Chamber.

"In general, the share of SMEs has increased to 36.4% of GDP. The number of employed in this sector has increased by 14% and amounted to 4.3 million people," Prime Minister noted.

At the same time, the work on creation of favorable conditions for doing business continues in the republic. For example, a new regulatory policy is being implemented to reduce unnecessary requirements. Already excluded 9 thousand irrelevant requirements, another thousand will be excluded by the end of the year. 

"Thanks to the automated risk management system, from January 1, inspections will be assigned without human factor. This, among other things, will halve the number of inspections," Alikhan Smailov emphasized. 

At the same time, as part of further improvement of tax administration, work on its digitalization is underway. To stimulate SMEs, a retail tax regime at the rate of 4% has been introduced since this year. At the same time, with the introduction of a single payment from the payroll of micro and small businesses, the total financial burden has been reduced to 20%.

In addition, in order to stimulate investment activity on the part of big business, new projects are exempted from MET for 5 years.

"From 2025, the new Tax Code, which is under public discussion, will start working. In it, new projects of the manufacturing sector will be exempted from taxes for 3 years," the Prime Minister voiced. 

Alikhan Smailov also emphasized the importance of the issue of business financing. According to him, development institutions play a special role here. Thus, Baiterek Holding has provided financial support for 2.2 trillion tenge since the beginning of the year. Including the Development Bank of Kazakhstan allocated 314 billion tenge, the Industrial Development Fund financed projects worth 195 billion tenge. Projects for another 300 billion tenge are in the works. Damu Fund has issued loans worth 115 billion tenge. At the same time, at the expense of subsidies and loan guarantees, banks issued loans worth 930 billion tenge.

"The Head of State has set a clear task to increase the treasury maintenance within three years up to 60%. The potential and resources for this are available. First of all, it requires reducing import dependence," Alikhan Smailov said. 

As an example, he cited the oil and gas industry, where the lion's share of purchases falls on the three largest consortiums. And this is 75% of purchases of the entire energy industry.

"Since the beginning of the year, their volume amounted to 3.5 trillion tenge, of which 1.9 trillion tenge is the share of local content. At the same time, only 9% is accounted for goods," the Prime Minister noted.

Touching upon other industries, he added that in the mining sector the share of purchased goods is only 15%, in machine building 13.5%, in pharmaceuticals 20%.

"Therefore, we believe that it is necessary to organize, together with the Atameken National Chamber, a systematic work to establish business contacts between manufacturers and large entrepreneurs. This would allow to develop SME belt around our large backbone enterprises," Alikhan Smailov said. 

He recalled that the Government held meetings with medium-sized businesses from all regions of the republic, during which industrial sectors with real prospects for organizing local production were presented.

"Support measures in the investment legislation are provided for this purpose. Therefore, we urge business representatives to take active actions to localize production," the Prime Minister voiced. 

According to him, large enterprises should adopt their own programs for the development of local content. The main tool in them should be the conclusion of long-term offteik-contracts. Head of the Government also emphasized the issues of strengthening human resources.

"We must nurture our own personnel, which will replace foreign specialists. In this regard, our large enterprises should take patronage over educational institutions with subsequent employment of graduates," he emphasized. 

In conclusion, Alikhan Smailov emphasized that the development of Kazakhstani content is one of the most urgent issues. For these purposes, financial resources are allocated and state support measures are provided.

"Business should use all available opportunities. The Government on its part is ready to take into account all your proposals and ideas," the Prime Minister concluded. 

Within the framework of the forum a solemn ceremony of signing contracts aimed at the development of the domestic manufacturing industry also took place. Offtake contracts, long-term agreements and memorandums totaling 58 billion tenge were signed between major subsoil users represented by ERG, Kazakhmys, Kazzinc, KAZ Minerals and Kazakh manufacturers.

#Alikhan Smailov #The Prime Minister of the Republic of Kazakhstan #Industry #Investments #SME

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