The plant plans to actively export its products to neighboring markets and more actively develop the domestic one. Launched plant is assisted by off-take contracts of national companies (off-take contracts are contracts for the procurement of goods concluded for a period of at least 36 months in accordance with a long-term procurement plan under suspensive delivery conditions). Earlier, the State Development Institute Development Bank of Kazakhstan JSC allocated "long" money for the project.
Informburo.kz spoke with Alageum Electric's Deputy Chairman of the Board for Strategic Issues, Yerkebulan Ilyasov, about the problems that Kazakhstan exporters face abroad.
– Erkebulan Saydullaevich, Asia Trafo plant is positioned as a unique enterprise for the country. What products does this plant produce?
– The Asia Trafo plant is part of the Alageum Electric group of companies. The company has been operating since December last year and produces power transformers, autotransformers and reactors of 110, 220 and 500 kilovolts. The maximum capacity is 630 thousand kilovolt-amperes, the capacity of the plant is the production of 120 transformers per year.
120 people are provided with jobs at the plant, and more than 500 people are fully loaded. We plan to cover the needs of both the domestic market and neighboring countries with our products – about half of the assembled transformers are planned to be exported to neighboring countries: Russia, Uzbekistan and Tajikistan.
– How many transformers have already been released?
– The volume of orders for the plant today is 7 billion tenge. This is until the end of the year. We have already produced two transformers for 110 and 220 kilovolts for the Turkestan region. Two more reactors with a voltage of 500 kilovolts are needed at the production stage for the needs of KEGOK JSC, there is a plan for four more transformers - with a voltage of 110 kilovolts to Nur-Sultan and two transformers for 220 kilovolts to the Kyzylorda region.
For next year, we are already provided with volumes of off-contract contracts from national companies – KEGOC, Kazakhstan Temir Zholy and Samruk-Energy.
– The Asia Trafo project was implemented with the assistance of the Development Bank of Kazakhstan and DBK-Leasing. Why precisely these development institutions?
– We have been c productively сooperating with DBK for a long time. The Bank previously funded the export operation of our plant Kentau Transformer Plant JSC, within the framework of the Nurly Zhol State Program for 1.5 billion tenge. Therefore, when work began on the construction of Asia Trafo, we already knew where to apply for financing. The bank opened a credit line in the amount of 8.6 billion tenge for 12 years at 9.6% percent, and DBK-Leasing issued a loan for the purchase of technological equipment for 5.9 billion. The total cost of the project is 19.1 billion tenge.
– When are you planning to bring the plant to payback?
– According to our business plan, it will take about 7 years, it all depends on the load of the enterprise. We set the average load with a gradual increase, but with a higher load, we will return to payback faster.
- You spoke about plans to enter your foreign markets with your products. Are there any difficulties for Kazakhstan exporters?
– First of all, this is the lack of a testing laboratory for domestic manufacturers in Kazakhstan. Now we use those that are abroad. The nearest one is in Russia.
If a company wants to enter, for example, the Russian market, then it is a prerequisite for participation in tenders or for sale on the market will be the presence of a certificate of passing tests in the laboratory.
For transformers it is, in particular, not only electrical tests, but also climatic, seismic and acoustic. We have no laboratories for such tests in Kazakhstan.
What is the situation now? It is necessary to bring to Russia a transformer that weighs at least 100 tons – this is transportation to the test base, passing tests, reverse transportation. It is not yet known whether the transformer will withstand the tests or not, and this type of product is "afraid" of transportation, because improper transportation can lead to failure. Each type of product has similar risks.
We can already carry out high-voltage and acceptance tests at our enterprise. But for the organization of other types, a system solution is needed. Together with the Union of Mechanical Engineers of Kazakhstan and the Ministry of Industry and Infrastructure Development, in the Road Map for the Development of Mechanical Engineering, we prescribed that we should consider the possibility of organizing test laboratories within the country. Now this issue needs to be worked out with the relevant ministries.
Once this is done, the products of domestic enterprises, export-oriented, will be able to freely pass the tests, receive the necessary certificates and be sent abroad.
The fact is that certificates are obtained more than once for the entire period of production – some need to be updated every year, some – every three years. That's a lot of money.
Therefore, instead of spending money abroad, it is better to build such a test base in Kazakhstan.
– What are the other export problems besides certification?
– The second question is the availability of cash. Now the manufacturing sector does not have working capital - a big cash gap.
How does it work? For example, for the release of the transformer, I buy raw materials from the supplier-transformer steel, an advance payment is made for two months. Another month or two is the production of steel and its delivery, then about two months-the production of the transformer. This is followed by transportation to the customer and installation, which may take a month. Only after that we receive money for products.
According to the rules of public procurement in Russia, payment is made two months after the delivery of the product, in Kyrgyzstan it only takes six to nine months.
In other words, the cash gap can last at least six months. As a result, it is easier for Kazakhstani enterprises to supply to the domestic market and receive money faster than to send something for export.
We believe that in order to solve this problem, exporters need to provide subsidies for part of their costs. It is good that now the Government already gives subsidies for transport costs.
– Last year, your company launched the Asia Trafo factory. What are the future plans of Alageum Electric?
– Back in 2015, we launched the Ural Transformer Plant, which covers demand in the European part of Russia. Now we look at the Siberian market and plan to build a plant in Petropavlovsk to produce transformers for a voltage of 6-10 kilovolts.
Also, we are currently working with partners from Austria and Turkey on the organization in Kazakhstan of the production of copper and aluminum wire rods with a redistribution of wire for windings of power transformers. Now it is delivered from abroad.
The analysis showed that in transformers about 30% of the prime cost is made up of copper and aluminum wires. With the organization of the production of copper and aluminum wires, we will be able to reduce our own costs and increase local content. In addition, we will be able to export some of these products for export.
