Replace imported goods with domestic ones

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The businessman suggested to make mandatory the conclusion of long-term contracts with domestic manufacturers

General Director of LLP “KARLSKRONA LC AB” Ualikhan Akhmetov made proposals yesterday at an enlarged meeting of the Presidium of the National Chamber of Entrepreneurs of Kazakhstan "Atameken" on import substitution in Kazakhstan. According to him, it is necessary to establish long-term contracts, including off-take contracts and to approve a plan of long-term procurements.

"Long-term contracts are very popular and developed in the US. For example, upon provision of a long-term contract to a manufacturer, the manufacture not only increases the proportion of local content in his production but also improves the quality of products, reduces the costs, and develops cluster production", - said the businessman.

Akhmetov designated the functions of NCE, the Government and the customers that are required for the development of the proposed directions. Thus, according to him, NCE needs to analyze the manufacturing industry and to identify their needs in the medium and long term, both at the domestic and foreign markets. "The industry itself should be analyzed as well as particular types of goods, works, services, taking into account the need for modernization, retrofitting, education of specialists, etc.", - he added.

According to the entrepreneur, it is also important to maintain the current state support measures - grants, loans, subsidies, leases, grants for education, various forms of non-financial support.

"The customer ("Samruk-Kazyna", subsoil users, system, town-forming enterprises, etc.) needs to conduct an analysis of import-substitution of goods, works and services with their needs in quantity and total volume; the formation of the list of import substitution for goods, works and services, and its publication, indication of necessary certificates and other required documents for customers to purchase goods, works and services", - he added.

Akhmetov stressed that entrepreneurs, initiating the establishment of import-substitution of goods, works and services, according to the list will sign off-take contracts, and will be secured with the right to extend these contracts under certain conditions: an increase in production capacity; increase of the share of local content, including the annual during the duration of total a long-term contract; joint ventures, modernization of existing facilities to establish other components; purchase of raw materials and components from domestic producers; creation of clusters of small enterprises (import substitution); the introduction of new innovative technologies in the production cycle; the establishment of export production, etc.

"Work in the proposed direction will allow the business to be confident in the future, not to be afraid to invest in the modernization of the business or the opening of new production facilities", - he said.

"In connection with it is offered to review the option of conclusion of long-term contracts as a mandatory mechanism for the procurement, including off-take contracts with the possibility of their extension for domestic producers of goods, works and services as one of the mechanisms for import substitution", - said the businessman.