Machine building is an integral part of the industrialization of the economy and the most important sector of the state. The industry has significant potential for expanding production and increasing exports. Today, the state is improving mechanisms to support domestic producers. In an interview with PrimeMinister.kz, Chair of the Board of the Union of Mechanical Engineers of Kazakhstan Meiram Pshembayev spoke in more detail about measures to support the industry.

As Pshembayev noted, the state supports the machine-building industry. Today there are about 100 government support measures. The results of the support are obvious — today's dynamic development of mechanical engineering, an increase in production volumes, the development of new types of products, the emergence of new types of industry, the possibility of building new cars and modernizing existing enterprises.

“One of the major support measures was the development of a state program for industrial and innovative development of our country in 2010. This has become the foundation and potential for the development of our industry, including mechanical engineering. Today the state is implementing Second State Program of Industrial and Innovative Development. We have started the implementation of the third industrial program,” said the chair of the Union of Mechanical Engineers of Kazakhstan in an interview.

In addition, other support measures are in force: the Roadmap for the development of mechanical engineering, the Roadmap for the modernization of enterprises. Due to such programs, many existing enterprises have been modernized and today they have the opportunity to produce competitive products and work for export.

State support is carried out by providing financial support. These are soft loans, leasing, grants, cost recovery.

Within the framework of measures aimed at increasing labor productivity, JSC QazIndustry reimburses costs in the amount of 40% in the following areas:

• improvement of technological processes, the maximum amount of compensation is 60 million tenge;
• increasing the efficiency of production organization; maximum compensation amount is 60 million tenge.

Development Bank of Kazakhstan JSC provides services for lending to current activities, intermediate and mezzanine financing, financing leasing transactions, as well as providing guarantees.

JSC Damu Entrepreneurship Development Fund provides support in the form of lending, subsidies and loan guarantees.

One of the important aspects of increasing the competitiveness of enterprises is the provision of affordable domestic raw materials, materials and components.

According to Pshembayev, machine-building enterprises are largely dependent on the import of raw materials, which imposes certain risks on the production of products.

“Today, domestic machine builders are forced to buy raw materials mainly from abroad. Every year we purchase up to 240 thousand tons of cast iron and castings for the production of machinery, 467 thousand tons of forgings and billets, alloyed and unalloyed steel. Raw materials are very important in the formation of a competitive price, especially for export and ensuring domestic demand,” said Pshembayev.

This issue was especially noted in the September Address of the President of the country. In order to implement the specified order of the President of the country, it is proposed to create basic production facilities. There are a number of enterprises in Kazakhstan that have experience in the production of cast and forged blanks, and are also interested in its development and modernization.

To resolve this issue, it is advisable to provide targeted measures of state support in the form of long, cheap money through the established Industrial Development Fund or temporary entry into the capital of Kazyna Capital Management.

The implementation of these projects will strengthen the basis of mechanical engineering for the development of types of final products, reduce dependence on imports and increase the competitiveness of manufactured products, and in the future go to export.

Pshembayev noted that there are also measures of state support provided for by the Tax Code. This year, changes have been made, conditions have been created for exemption from VAT, customs duties for enterprises that will increase their localization in the automotive industry, agricultural machinery.

“In order to increase the localization of local content, more spare parts, components and assemblies must be produced in our country. For this, the issue goes along the chain — the purchase of equipment, raw materials, the exemption of equipment and machine tools when imported to Kazakhstan from VAT and customs duties. This chain has started working, and we hope that all these measures, which are being taken by the state together with business, will help build up and intensify the processes of modernization of our enterprises. The next step will be to increase export and quality of products,” Pshembayev said.