Kazakh government allocates $300 million to develop machinery manufacturing

ASTANA – Kazakhstan has allocated 110 billion tenge (US$303.54 million) over the past three years to develop machinery manufacturing, said First Vice Minister for Investment and Development Roman Sklyar at a press conference dedicated to the opening of the Machine Builders of Kazakhstan’s sixth forum.

“These funds are not irrevocable; the budget spends them on a return basis,” he said.

One of the most prominent examples of returnable money is the programme of preferential car loans and lease financing, he added. The programme, which received 40 billion tenge (US$110.38 million) and credited 61 billion tenge (US$168.33 million) to its consumers, increased demand for Kazakh products.

The government funds projects through Baiterek National Holding to create or modernise production facilities. The country provides concessional lending to both the enterprises and their consumers.

National support is not only limited to funds, but also comes in the form of amendments and additions to the entrepreneurial, tax and customs codes.

“As we know, mechanical engineering is one of the most complex and differentiated industries. Perhaps, therefore, mechanical engineering is most sensitive to state regulation measures,” said Sklyar.

In addition, state officials and representatives of development and business institutions will discuss a new draft of the Comprehensive Machinery Development Plan for 2019-2030.

According to Meiram Pshembayev, chairman of the Union of Machine Manufacturers of Kazakhstan, machine manufacturing industry production volumes increased by 17.2 percent in the first quarter of 2018. The union expects to produce one trillion tenge (US$2.76 billion) in products this year.

Kazakhstan exported locomotives for the first time last year to Azerbaijan, Kyrgyzstan, Tajikistan, Turkmenistan and Ukraine. The country also produced batteries, pipeline shut-off valves and electrical equipment and exported 1,500 vehicles.

The overall increase in the manufacturing industry, however, is offset by a decline in agricultural machinery production. Local manufacturers are dependent on foreign supplies of certain spare parts and Kazakhstan spends $1 million annually to buy technical steel from Russia whereas the country needs to produce 100,000 tonnes of it domestically.