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35 bln tenge to Support Kazakh Engineering Industry in 2015

Friday 10 April 2015

ASTANA (Interfax-Kazakhstan) – In an effort to support domestic engineering 35 bln tenge will be allocated from the National Fund in 2015, Kazakh First Vice-Minister of National Economy Marat Kusainov.

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Hydraulic press fabricated by Almatinskij zavod tyazhelogo mashinostroeniya (AZTM)

“Out of 35 bln tenge – 20 bln tenge will go to automotive industry, 10 bln tenge to production of helicopters and 5 bln tenge production to rail cars”, he said at a briefing in Monday in Astana.

He stressed that the support of the domestic machine builders will help substitute foreign imports with domestic products and sustain production volumes.

At the moment, the machine building segment in Kazakhstan produces only 0.6% of gross value added (GVA). The same indicator is equal to 2.9% in Russia. However, this is relatively small compared to the countries leading in the production of machinery products. Thus, in Germany it accounts for 8.1% of GVA, in Japan – 7.2%. It is noteworthy that in Belarus the figure is comparable to the German or Japanese, reaching 7.1%.

Such a state of affairs stems from the fact that after the disintegration of the Soviet Union, which was accompanied by a breakdown of economic relations, Kazakhstan experienced a sharp decline in production volumes. Machine building was in a deplorable state, the signs of recovery in the industry appeared only in the early 2000’s.

GVA dynamics of machine building in Kazakhstan was characterized with a high growth rate in the years of 2006–2007, declined indicators in the years of 2008–2009 and with renewed positive trends in 2010. As a result, in 2010, the real value of GVA manufacturing machinery and equipment surpassed the figures of 2006 by 55%, electrical equipment, electronic and optical equipment – by 24% and transport equipment – at 117%.

In 2011, Kazakhstan’s machine-building continued growth in production volumes. Thus, the physical volume of production from machinery activities compared to the year of 2010 increased by 17%. The leaders here were the manufacture of motor vehicles, trailers and semi-trailers – increase of physical volume output by 63% and other vehicles – increase by 29%.

The machine-building structure of Kazakhstan as a whole is dominated by production of products for mining and smelting and gas and oil sectors, which satisfies the domestic demand in these industries.

In the year 2011, the machine-building production (excluding products by activity “repair and installation of machinery and equipment”) in monetary equivalent was KTZ 278.2 bln ($1.9 bln), or 1.7% of the industrial production. Production of machinery and equipment accounted for 27.8% of the entire machine-building production, electrical equipment, electronic and optical equipment 31.3%, and transportation vehicles and equipment 40.9%.

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