Issues of import substitution and provision of manufacturing enterprises with orders were considered at a meeting of the subcommittee of the furniture and woodworking industry of the Manufacturing Committee of NCE RK.

Note, this is one of the first meetings that "Atameken" holds after two meetings in the Government, to discuss issues of import substitution and to ensure orders of processing enterprises in the framework of the state order and the order of quasi-public sector.

The moderator of the event, Deputy Chairman of the National Chamber of Entrepreneurs Nurzhan Altaev, noted that today the share of furniture products manufactured by Kazakhstani furniture making companies and consumed in the domestic market, does not exceed 30%. Most of the furniture products, alas, are imported into Kazakhstan.

According to Deputy Chairman of the Board of NCE, today the main workload of  enterprises is ensured through state procurement orders and procurement of subcontractors during construction of kindergartens and facilities for educational institutions. "Unfortunately, according to information received by the Chamber, the furniture industry enterprises receive orders for the production of furniture products on left over principle. There is a negative practice, when the state bodies and subcontracting organizations select suppliers of furniture products, who do not even have the production capacity", - said Nurzhan Altaev, adding that such pseudo-entrepreneurs until recent time were using certificates of origin ST-KZ.

Since last year, NCE has taken under strict control the process of issue of these certificates. As a result of the inspection, conducted by "Atameken", more than 40 certificates issued in the different regions were revoked.

Altaev also said that during the inspection of documents and the applicants themselves, who applied for a certificate of CT-KZ, it is necessary to involve experts of sectoral business associations.

According to Deputy Chairman of NCE, the Association of Furniture and Woodworking Industry of Kazakhstan has done huge work in this direction, it has helped NCE to identify those individuals who can’t be attributed to the domestic producers.

However, as it was noted by Nurzhan Altaev, there are some flaw in collaboration. According to him, the Regional Chambers must take under control this work and interact with industry associations in matters of issue of certificates and detection of pseudo-enterprises.

"We understand that CT-KZ is not a panacea for all the problems of domestic manufacturers, as the process itself and the rules, governing its issuance, is imperfect. But in this area we carry out the work, and as one of the tools that will exclude mediators from the market of public procurement and procurement of quasi-state enterprises, is introduction of an institution of an industrial certificate", - said the deputy chairman of the Board of NCE.

By the condition on 1^st of January 2016 more than 7000 schools are functioning in Kazakhstan, more than 8000 kindergartens. Every year, the local executive authorities shall purchase new desks, chairs and other furniture.

On the basis of these data, as well as the settlement of the cost of the furniture production, conducted by the Association of Furniture and Woodworking Industry, today the market capacity is about 15 billion tenge, while the share of domestic production in the total volume of consumption of furniture production, including for schools, kindergartens and secondary special educational institutions is around 28%.

In order to ascertain the causes and sources of the problems that led to the fact that companies of the furniture industry - real manufacturers - do not receive orders, not winning the tenders and competitions, the Chamber conducted a comprehensive analysis of procurement data, generated by the Center for Monitoring and examination of markets.

"The results of the analysis of these data revealed entities , which without having production facilities or equipment, received multi-million dollar orders for furniture production. In addition, these companies, which didn’t produce furniture products under the guise of CT-KZ certificates, supplied imported furniture, and sometimes passed orders for the production of furniture products for the real manufacturers to the furniture industry enterprises of Kazakhstan", - said Nurzhan Altaev.

Following the meeting, a number of recommendations was given on how to load the furniture making enterprises. Regional Chambers of Entrepreneurs were given a task together with local authorities to make a table of current and erected kindergartens and regional schools on the basis of which it is necessary to develop a long-term plan for the supply of furniture products, as well as gardening and landscaping of adjacent territories and transfer orders to domestic producers.

It is also proposed to conduct a survey of enterprises and create a register of manufacturers of furniture production and companies, providing landscaping services and producing products for the improvement of the surrounding areas of social facilities. Together with local authorities, the prosecution authorities should organize inspection of objects, which it is assumed are not engaged in furniture production, gardening and landscaping maintenance of kindergartens and schools.

Department of procurement and local content must reflect what adjustments should be introduced to the regulations, in order to optimize processes.

Committee of the manufacturing industry, the Committee of the social sphere and social partnership in cooperation with regional chambers need to make proposals for the diversification of the enterprises for disabled and to ensure their orders.

Department of manufacturing industry should prepare and submit proposals for the road map for the development of the manufacturing, wood-working and furniture industry, for the supply of their products to existing and constructed social facilities.