State of the Nation Address

NADLoC: how is production developed and maintained in Kazakhstan

Nur-Sultan19 October , 13:35

Delivering the annual State-of-the-Nation Address, President of Kazakhstan Nursultan Nazarbayev called on domestic producers to engage in the development of consumer goods in order to realize the export potential and saturate the domestic market with domestic goods. It should be noted that the State is engaged in the development and support of domestic production on a regular and systemic basis; appropriate programs have been adopted to develop the industry, support small and medium-sized businesses, and corresponding state institutions have been created. But in the opinion of Deputy Chairman of the Board of “National Agency for the Development of Local Content “NADLoC” JSC Ruslan Dzhamenkov, at the same time, these measures are mainly aimed at meeting the needs of large customers in the face of subsoil users, national and holding companies, state bodies, backbone enterprises. How does the National Agency contribute to the development of local content? Read in the exclusive material of the Information Agency.

“The development of domestic production is carried out by monitoring of the local content, procurement of goods, works and services of subsoil users and backbone enterprises, because each subsoil use contract has a local content obligation ranging from 0 to 100%, depending on the specifics of the contracts”, R. Dzhamenkov said.

According to the speaker, however, the lion’s share of consumption accounts for the domestic consumption of the population, where imported products predominate.

“Our State has chosen a market development path that, through healthy competition, contributes to the improving of the quality of consumption, does not apply measures restricting the free choice of citizens to use modern, high-quality, fashionable, safe, inexpensive products. However, imports do not always mean quality. In addition, consuming imported products, we, as a population, slow down the development of our domestic production and the economy as a whole”, the Deputy Chairman continued.

Based on this, the National Agency takes initiatives to popularize and promote domestic products.

“We systematically organize a platform for domestic producers and consumers in the form of fairs. Thus, “NADLoC”, on the one hand, provides the opportunity for producers of consumer goods to declare themselves and their products to a potential consumer. On the other hand, it gives the consumer the opportunity to get acquainted with the products of national consumption of domestic producers”, the speaker said.

According to the Deputy Chairman of the National Agency, 983 domestic enterprises of light industry supplied the domestic market for goods by only 20%, while goods worth 396 billion tenge were imported to the country. For 8 months of 2018, Kazakhstani light industrialists produced clothes amounting to 57.7 billion tenge, which is 1.6% in nominal terms (index of actual volume) higher than the figures for the same period last year.

“The index of actual volume of light industry products in January-August 2018, compared with the same period last year, shows an increase of 101.6%. The greatest success is demonstrated by the production of textile products, where the increase was 102.1% (29.579 million tenge), the production of clothing 99.8% (22.090 million tenge), as well as the production of leather and related products, there is an increase of 102. 3% (6008 million tenge)”, he noted.

The city of Shymkent became a leader in the production of products in the first 8 months of 2018, where light industry products worth 13 billion tenge were produced. The second in the list of domestic producers is Almaty region, where they produced goods for 7.2 billion tenge. Such large companies as “Glasman” LLP, “Arlan 777” LLP, “TF Azhar” LLP (production of outerwear), “Mediateks-N” LLP (headwear production), “Texti Market” LLP (production of knitwear) etc. operate in the region. The city of Almaty closes the top three. The southern capital produced goods worth 6 billion tenge. Large enterprises for the production of workwear operate in Almaty, they include the republican state enterprise “Kazvoentorgsnabsbyt” under the Ministry of Defense of Kazakhstan, a branch of “Demeu-Arna” LLP, a joint Kazakh-Swiss venture “Max Protec”, “Tekhnoavia-Kazakhstan” LLP, as well as outerwear manufacturers and footwear, for example, “Kazlegprom-Almaty” LLP.

Speaking about segmentation in the light industry products, R. Dzhamenkov noted that the maximum increase in production was observed in the manufacture of knitwear, where growth was 29%. Then, there are textiles, except for clothes - a 24.9% increase, of which bed linen is 32.7%. Nextly, the products made of cattle hides or horse hides, the increase here was 24.6%. Cotton products close the quartet of leaders - 19%.

“Nowadays, if we compare our products with foreign counterparts, we can say with confidence that Kazakhstan’s products are becoming competitive not only in terms of price, but also in quality”, he summarized.

A similar situation exists in the food industry. Products worth 207.9 billion tenge were imported in 2017. The most purchased items are drinks, canned fish.

“As the Head of State noted, “the nation health is the main priority of the State. Kazakhstanis should consume high-quality products and medical preparations”. Considering the naturalness of food products produced in Kazakhstan, it can be said with confidence that the Kazakh citizens are provided with opportunities for the correct and healthy lifestyle and nutrition, and every Kazakhstani person can count on the safety of domestic food”, Deputy Chairman R. Dzhamenkov said.

The development and promotion of domestically produced goods is also carried out by the organization of agricultural fairs, where the population purchases high-quality and natural domestic products at prices below market prices by 10–15%.

“At the level of local executive bodies in almost all regions, work on supporting enterprises of consumer goods is carried out in the form of seasonal agricultural fairs. In the capital, agricultural fairs are held on a weekly basis, where more than 40 food industry enterprises represent a large assortment of meat, dairy, fruit and vegetable, sausage, fish products and other consumer goods”, he said.

In the framework of the development of local content among the subjects of monitoring and support of domestic manufacturers of light industry for the second year, the Agency also conducts the Exchange of subcontracts.

“The organization of the Exchange makes it possible to efficiently ensure the search for future partners, allows presenting the potential of a domestic producer to large customers, build effective production chains and most importantly establish long-term and stable relationships”, the speaker stated.

Also, in order to support domestic manufacturers, the Agency, jointly with Kazpost JSC, is planning to conduct seminars on e-commerce training: “Creating and developing Internet sales”. The purpose of the seminars is the development and promotion of Kazakhstani goods through online stores. The pilot project of these seminars will be held in the cities of Astana and Almaty.

“I think that the events held by our Agency have a feasible influence on the domestic production, which contributes to an increase in the local content”, R. Dzhamenkov concluded.

It should be noted that the Address of the President of Kazakhstan “Growing welfare of Kazakh citizens: increase in income and quality of life” was presented on October 5, 2018 and it is a consistent continuation of the step-by-step development of the state and serves as the right vector for all citizens of the country.

Saltanat Sarina