How does Atameken offer to developindustry in Atyrau region?

Atameken National Chamber of Entrepreneurs held a screening of Atyrau region to accelerate economic development of the region. The results showed that the region has great potential for growth in terms of import substitution of goods.

According to studies conducted by experts of the National Chamber, in 2018, the volume of imports to Atyrau region amounted to 1.1 trillion tenge for 2,800 types of goods.

For example, by types of goods: products belonging to the category of machineryand equipment were imported for 535 billion tenge, metals and products from them – for 300 billion tenge. The import of the products of chemical and related industries was worth 60 billion tenge, means of land, air and sea transportation – 43 billion tenge.

The import in the engineering industry in 2018 exceeded 250 billion tenge. Spare parts for engines, generators and electric generator units alone were imported from Italy for almost 132 billion tenge. Pipe fittings, boilers, tanks or similar containers were imported from South Korea for 24.7 billion tenge, and panels, consoles, switchboards and bases for electrical equipment were imported from Indonesia for 24.6 billion tenge.

Chemical industry products were imported from Germany, Italy, the USA, South Korea and Russia for 15 billion tenge. Reaction initiators and accelerators, as well as catalysts of German production alone were imported for 3 billion tenge.

Having analyzed the statistics, experts of Atameken NCE concluded that the potential for import substitution in engineering and mining industry for 115 commodity items today is 95.7 billion tenge.

In particular, entrepreneurs of the region can be engaged in the production of parts of steam boilers and superheated boilers, the total cost of which is estimated at 349.6 million tenge. Fittings made of ferrous metals alone can be produced for 958 million tenge, and they will be in demand. Wires of iron or non-alloy steel, uncoated, polished or unpolished can be produced for 517 million tenge.

In addition, the study showed that Atyrau region has 539 potential niches for business in the amount of 27.3 billion tenge. In particular, it is creation of production of pre-engineered building systems, which were imported for 2.7 billion tenge, production of building constructions for greenhouses – 4.6 billion tenge, production of welded precision tubes of stainless steel and special alloys – 20 billion tenge.

At the same time, up to 8 thousand new jobs will be created, and the share of small and medium-sized businesses in GDP can be increased from the current (2019) 28% to 35% by 2025.

To date, the workload of manufacturing enterprises in the region remains extremely low.

Out of 46,611 enterprises of the region, only 1,128 enterprises are engaged in the manufacturing industry. At the same time, the share of participation of entrepreneurs in the procurement of state and quasi-state organizations through,,, is only 5%.

The screening showed that the volume of mechanical engineering production in the industry is 0.5% or 34.9 billion tenge, the volume of production in the manufacturing industry is 6% or 584.8 billion tenge.

According to the results of the research, experts of Atameken NCE made a number of proposals.

In particular, it is necessary to amend the Law “On special economic and industrial zones”, as well as the Tax and Customs Codes. It is necessary to exempt domestic producers from VAT on imported raw materials, equipment and components intended for the production of goods in order to localize production for the needs of operators. For example, for residents of the private industrial zone and Atyrau oilfield services technopark.

It is necessary to make public the information on procurement plans for large oil and gas projects to apply the practice of early tenders, so that domestic producers can plan their production. Now information on operators’ planned procurements is closed.

It is necessary to open a competence center in Atyrau city on the basis of the APEC PetroTechnic college – a center for the development of skills for industrial jobs, engineers and technicians for the contractors (General Electric, Honeywell, Siemens, Schneider Electric, Rosen, Schlumberger, Cameron, Rockwell Automation, Yokogawa, Emerson).

In addition, in the design of new projects, for example, in the implementation of the project for the development of the Kalamkas-Sea field of NCOC, it is necessary to provide in the terms of referencefor the participation of Kazakhstani companies.

It is first and foremost about the participation of domestic enterprises in tenders of such major oil and gas operators as Tengizchevroil LLP (TCO), Karachaganak Petroleum Operating B. V. (KPO) and North Caspian Operating Company (NCOC), which are the main customers of goods, works and services. In accordance with the Production Sharing Agreement (PSA), these companies use internal procurement rules, which significantly complicates the participation of Kazakhstani producers.