Kazakhstan plans to increase engineering exports by almost 3 times

Kazakhstan plans to increase engineering exports by almost 3 times

Measures for the further development of mechanical engineering industry considered at the Government session chaired by Prime Minister of Kazakhstan Alikhan Smailov.

According to the Minister of Industry and Infrastructural Development Marat Karabayev, today the share of mechanical engineering in the structure of Kazakhstan's economy occupies 1.5%, and in the manufacturing industry is 13%. In the industry currently operates about 3.8 thousand enterprises, the number of employees is more than 118 thousand people.

In general, machine building is one of the most dynamically developing sectors of the manufacturing industry: if over the past 5 years the average growth rate of the manufacturing industry was 4.5%, machine building showed growth of 17.6%.

According to the Minister, within the framework of further strengthening of the industry, great emphasis is placed on new projects. Thus, by 2028 it is planned to implement 151 projects worth 1.7 trillion tenge with the creation of more than 24 thousand new jobs. Among them are enterprises in the fields of railroad, agricultural, electrical, oil and gas, mining and metallurgical engineering, as well as automobile manufacturing. In particular, 29 projects worth 217 billion tenge are expected to be launched in 2023, creating 3.5 thousand jobs.

Minister of Energy Almassadam Satkaliyev reported that in order to increase the share of Kazakhstan content in the goods of large oil and gas projects was created International Center for the development of oil and gas engineering. As part of its work identified 7 commodity groups of demanded products worth about $400 million, which in the future will be able to supply domestic manufacturers (plants). For this purpose, mechanisms of support for local manufacturers have been introduced at large oil and gas projects, including "Early Tender", "Trial Order" and "Contract in exchange for investment".

Deputy Chairman of the Board of the Union of Machine Builders of Kazakhstan Yerkanat Makanov also spoke at the meeting.

Prime Minister emphasized that over the past 5 years the share of the machine-building industry in the economy of Kazakhstan has increased by 1.5 times, and the volume of production has increased by 3 times and exceeded 3 trillion tenge. Only last year the industry attracted more than $470 million of foreign investment. At the same time, there is great potential for its further development.

"There are significant opportunities for exporting our products. For example, the total volume of imports of machine-building products of the Eurasian Economic Union countries for 2021 amounted to $141 billion. We can increase our share in this market," Alikhan Smailov said.

As noted by the Head of Government, a pressing issue is the high level of wear and tear of equipment. On average, this indicator in the machine building industry is about 40%. The state of fixed assets requires significant modernization and reconstruction.

In this regard, Alikhan Smailov noted the need to provide affordable financing, primarily for small and medium-sized businesses. Including through the Industry Development Fund.

According to the Prime Minister, there is a great potential for development in oil and gas machine building. Now the volume of production in this sector is about $160 million. At the same time, the volume of imports exceeds $1.6 billion.

"The difference, as we see, is tenfold. It needs to be reduced. To assist in the creation of new domestic industries, the International Center for Oil and Gas Machine Building was opened in 2020 together with major subsoil users. Given the existing potential and high interest of local manufacturers, work in this direction should be intensified," Alikhan Smailov emphasized.

Head of the Government also touched upon agricultural machine building. According to him, at the moment the depreciation of the country's agricultural machinery fleet is about 76%. Last year domestic enterprises produced over 15 thousand units of agricultural machinery. However, this is not enough.

"Agrarians need new equipment! Therefore, the pace of production must be increased. For this purpose we have all the necessary tools and opportunities," Prime Minister said.

At the same time, the importance of industrial cooperation development was emphasized. Today, joint ventures with such major world leaders of machine building as General Motors, Alstom, General Electric, Daewoo Bus, Hyundai, etc. are successfully operating in the republic.

A striking example of industrial cooperation is the plant for the production of vehicles and buses in Sarani, Karaganda Region, which was launched in 2020. Its capacity is 1,200 vehicles per year. 11.9 billion tenge has been invested in the enterprise, and about 1,000 people will work at its site once it reaches full capacity.

"This work should be continued, Alikhan Smailov emphasized.

He reminded that for the further development of the machine-building industry on the instructions of the Head of State the corresponding five-year Comprehensive Plan is being developed. Its implementation will make it possible to increase production in the sphere of mechanical engineering more than 2 times, increase exports almost 3 times, investments in fixed assets 1.5 times, as well as to double labor productivity.

"Thanks to the support of the state, domestic enterprises will be able to contribute to the socio-economic development of the country by creating permanent jobs, opening new and modernizing existing production facilities,", Prime Minister said.

In conclusion, Head of the Government instructed to coordinate the Comprehensive Plan for the development of mechanical engineering as soon as possible, to increase the efficiency of the International Center for Oil and Gas Engineering, as well as to work out the issue of reducing the rate of investment subsidies from 25% to 15% for imported agricultural machinery, the analogues of which are produced in Kazakhstan.

Source: Official Information Source of the Prime Minister of the Republic of Kazakhstan

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