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How to support domestic producers?

- Akmola Region
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Regional Chamber intends to establish a construction consortium, the composition of which will include construction and installation, project companies

According to experts of the Chamber, it will have a positive impact on the share of domestic producers at the domestic market.

Experts of RCE analyzed the public procurement portal and selective monitoring of participation of state institutions in it. In particular, at the Department of construction the amount of executed contracts has reached about 1.3 million tenge, and the local content amounted to 59%. Basically, prevails presentation of services and works on construction and reconstruction of social facilities.

But the town’s Akimat gives preference to local producers. The total amount of performance of the contracts – is about 1.9 ml. tenge, the Kazakh content equals 99.69%. When monitoring 11 largest lots the total amount of the share of Kazakh content was 100%.

Meanwhile, in the subordinate enterprises of LLP "Kokshetau Zhylu", Kazakh content was only 1.38%. They mostly purchase goods - spare parts for equipment, machinery and vehicles, fuel and electricity.

Monitoring of 8 lots showed that the share of domestic manufacturers to local suppliers by the number was 25%, the sum - 76% (due to a large lot on electricity supply). The remaining suppliers are from Astana, Almaty, Kyzylorda, Shymkent, the largest share of procurement is fuel supply (supplier LLP “PETROSUN” in Almaty).

"On the whole, based on our monitoring of 44 items, the amount of executed contracts exceeded 3.6 million tenge (40%), local content amounted to 81%. This indicator shows the specifics of the region, aimed at the construction and the food sector. Supply of equipment, medical goods, spare parts for cars, machinery, fuel, is made from other regions", - says the expert of RCE Daurenbek Zhusupov.

Recently at the site of RCE was held a meeting of the working committee, at which were considered procurement plans of quasi-public sector. In particular, the total stake of JSC "811 repair plant KI" (town of Yereimentau) - the largest enterprise to provide services for freight car overhaul, tracked vehicles - only 3%. This figure, according to Daurenbek Zhusupov, due to the fact that 97% of purchases account for specific goods (spare parts for cars). The share of LLP "Semizbay-U” (uranium mining) in the goods - 29.1%, of the data and services lack thereof on the portal.

Following the meeting, it was recommended that companies send to the Chamber a list of purchased goods and services for 2017 for distribution to small and medium-sized businesses. In addition, in support of the domestic manufacturer the enterprises of quasi-public sector should increase the share of purchases for the following product groups: food, clothing, shoes, furniture, batteries, plastic pipe and other products produced in Kazakhstan.

"Domestic producers can’t always compete with the imported product at a price that, accordingly, impact on their share of the procurement. One of the most effective methods to address the problem of increasing the share of local manufacturers is to provide customers with technical specifications of purchased products and their delivery, of course, taking into account local producers. In turn, they should actively defend interests while fulfilling the obligation to provide relevant information on its products. And, of course, this work will be effective in the committed involvement of public bodies", - said Daurenbek Zhusupov.


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