High-quality domestic products may go to a foreign market, if we don’t appreciate them at home, according to NCE "Atameken"

The National Chamber of Entrepreneurs "Atameken" held a press breakfast on import substitution with the participation of several speakers from various committees of the organization.

Director of the Industrial and Investment Policy Department Alikhan Erzhanov told reporters that the experts of "Atameken" analyzed nine manufacturing industries - metallurgy, chemistry, construction materials, light industry, food, packaging, furniture, wood industry, and identified 147 products that have the greatest potential for import substitution.

According to him, 101 items out of 147 products are produced in Kazakhstan. "The next stage of the analysis showed that in 2015 the volume of procurement of 147 items by national companies, mining companies and government agencies amounted to 146 billion tenge, where the share of imports was 96.6%". - Added Erzhanov.

An expert of Economic Integration Department Assel Dangilova, in turn, told about measures on import substitution, which are provided in the framework of the Eurasian Economic Union.

"An instrument, which will be very effective in the future - it is subcontracting. Subcontracting imples an organization of interaction. We know that, historically, the industry is much more developed at our neighbors - Russia and Belarus. Therefore, we believe that in the context of import substitution, we can use their resources. For example, to make high value added products in Kazakhstan, but to use some of components, technology or human resources of neighbors", - she noted.

According to Dangilova, it is planned to create within the Union a unified database of the five countries, which will include all potential customers, suppliers, product name. "The lack of information is a very big problem. Often, many actors simply do not know about each other and the product, which is produced", - she said.

The expert also said that there will be organized subcontracting exchanges – the platform, at which will gather representatives of all five countries to discuss cooperation. "In addition, there will be organized consultations for businessmen under the laws of a country of the Union", - added Dangilova.

She noted that "Atameken" proposed to form a network of subcontracting of Kazakhstan on the basis of NCE, as the organization that has all the resources for that - the regional branches, business support centers, etc.

During the casual conversation with the journalists, the Secretary of the Committee of manufacturing industry Tolegen Moldakhmetov spoke about the work on import substitution, in which his division is involved.

For example, in the chemical industry, according to Moldahmetova, NCE found 8 headings for potential import substitution: varnishes, paints, antifreeze, de-icers. "A new company located in Astana addressed to "Atameken" last year, for the production of de-icers, which wants to work directly with the airports. They have had problems on the supply of products to Astana airport. Upon this appeal, we organized a meeting at the site of NCE, during which agreements were reached on the supply of products in the amount of 125 million tenge ", - he said.

The head of the committee also raised the problem of the furniture industry. "The analysis we have come to the conclusion that 70% of all purchased furniture is bought by quasi public sector - national companies. It is difficult for our domestic producers to compete in the B2B market", - stated the expert.

In the light industry, according to Moldakhmetov, as almost all of the purchases are made by the state within the contracts of the defense authorities and procurement of national companies.

"Now NCE is working on a project for school uniforms. The market of school uniforms is about 37.5 billion tenge, on average, one set is 15 thousand tenge. There relevant proposals were sent to the Government in order to form a list of domestic manufacturers of uniforms by high standards. We also offered to carry out a meeting with producers and customers in cooperation and after all these events will be over to arrange a shopping area on the preferential basis for school uniform manufacturers. The Government supported the proposals", - he said.

The expert invited journalists to the first republican forum of school uniforms, which will be held on 5^th of April. According to him, school uniforms made by domestic producers will be exhibited there.

Deputy of the Secretary of the Committee of machine engineering Umirserik Erzhanov, in turn, noted that Kazakhstan has great potential for import substitution in agricultural machinery and the automotive industry. "Today, as you know, we do SKD. National Chamber is working on localization - the creation of its own production in the field. For agricultural machinery - certain types of components, plus attachments, for car industry - components of domestic raw materials ", - he said.

The head of the Committee of food industry Erbol Eseneev drew the attention of the media that often Kazakhstan in pursuit of cheapness prefers to buy imported products while domestic products are much better, as goods are made from environmentally friendly raw materials.

"We have serious concerns that all of our high quality products will sweep the other markets, the same Chinese. It will be more profitable for a manufacturer to sell for export than at the domestic market. Now the situation develops this way. Last supply of vegetable oil in China is proof of this. Our manufacturers sold it at wholesale to the Chinese retailer at 315 tenge per liter. We buy this oil for 300 tenge", - he said.