Samruk-Energy JSC. Annual Report / 2013
Development of local content share
Mission in area of development of local content
Within the framework of implementation of state program on development of Local Content Share (further LCS) the Company as the operator on modernization of existing and commissioning of new generating capacities should ensure planned development of local content share, as well as participation of Domestic Goods Producers (further DGP) in implementation of production and long-range projects in power energy industry, creation of new productions.
In order to fulfill the mission of development of local content share and ensure participation of DGP in implementation of projects in all dialogue areas, the Company offers, and carries out in its activities, a number of subsequent actions to fulfill the state program.
Vision in area of local content share
The Company visualizes itself as a leader for local producers in energy industry, in a part of presence and development of DGP in power energy segment of the country economy, including within the framework of creation of foundations and implementation of green economy strategy, development of RES, increase of resource and energy efficiency of production.
IN 2012 THE COMPANY CONCLUDED AGREEMENTS IN AMOUNT OF
168
BILLION TENGE
Ways and procedures of development of local content share
In order to fulfill the mission of development of local content share and ensure participation of DGP in implementation of projects in all dialogue areas, the Company offers, and carries out in its activities, a number of subsequent actions to fulfill the state program on support of DGP and development of LCS, execute program instructions of Samruk-Kazyna NWF:
- Transfer of advanced technologies
- Establishment of joint enterprises with leading holders of right for purpose of obtaining access to know-how, advanced technologies and production capacities;
- Increase of localization of DGP share;
- Creation of necessary conditions for soft-term financing of DGP activities in banking sector;
- Co-funding by the government of DGP projects within the framework of the state-private partnership, in development institutes and real economy sector.
IN 2013 THE COMPANY CONCLUDED AGREEMENTS IN AMOUNT OF
299
BILLION TENGE
IN 2012
9
LONG-TERM AGREEMENTS HAVE BEEN CONCLUDED
Expected results
Implementation of the given set of actions will allow to increase competitive ability of DGP, involve domestic business on more integrated and systematic basis into electric power industry, create new work places and productions, increase innovation capacity and efficiency in the sector in whole.
Thus, conditions for organization of new productions, increase of production localization share, producing of components for equipment delivered shall be created. Conditions for transfer of technologies from the leading world holders of right and development of the segment for servicing of delivered equipment shall be received. New work places and conditions, necessary for improvement of local personnel qualification in part of operations, service and repair of equipment delivered and manufactured, created as a result of above said actions shall bring separate positive effect. Issues on guaranteed sale of products shall be solved – conclusion of long-term agreements with DGP.
INFORMATION ON NUMBER OF AGREEMENTS CONCLUDED WITH LOCAL GOODS PRODUCERS IN 2012-2013 PERIOD.
In 2012 the Company concluded agreements on goods, total – 3,918 agreements in amount of 168 billion tenge, including with DGP – 237 agreements in amount of 37 billion tenge.
In 2013 the Company concluded agreements on goods, total – 4,672 in amount of 299 billion tenge, including with DGP – 388 in amount of 69 billion tenge.
Comparing 2012 and 2013, we observe positive dynamics in agreements concluded with domestic goods producers – there is growth by 32 billion tenge.
INFORMATION ON NUMBER OF LONG-TERM AGREEMENTS CONCLUDED IN 2012-2013 PERIOD.
In 2012, nine long-term agreements with domestic goods producers have been concluded in amount of 230.7 mln tenge total, including: 4 agreements with Kentauski Transformer Plant JSC to deliver disconnect switches and circuit breakers, 4 agreement with Nur-Stroy LTD LLP to deliver reinforced-concrete poles and add-on devices to poles, 1 agreement with Atamkuldan LLP to deliver add-on devices to poles.
In 2013, four long-term agreements with domestic goods producers have been concluded in amount of 8.3 mln tenge total, including: 4 agreements with Atyrau production and training enterprise for Deaf People Community (male set), Anttec LLP (outfit for battery assembler), Tarazkozhobuv LLP (delivery of leather shoes), DOC Co. LTD LLP (delivery of print toners (cartridges)).
Information on local content share in purchases made in 2011-2013, thousands tenge*
| Actual 2011 | Total amount of agreements concluded | МС amount | % МС |
|---|---|---|---|
| goods |
98,422,538
|
68,941,280
|
70
|
| work |
32,233,294
|
18,096,885
|
56
|
| services |
88,057,006
|
86,717,086
|
98
|
| total |
218,712,838
|
173,755,251
|
79
|
| Actual 2012 | Total amount of agreements concluded | МС amount | % МС |
|---|---|---|---|
| goods |
175,949,669
|
112,421,300
|
64
|
| work |
66,287,021
|
26,184,573
|
40
|
| services |
98,087,186
|
94,582,504
|
96
|
| total |
340,323,876
|
233,188,377
|
69
|
* Note: data of Samruk-Kazyna Contract LLP
IN 2013
4
LONG-TERM AGREEMENTS HAVE BEEN CONCLUDED
| Actual 2013 | Total amount of agreements concluded | МС amount | % МС |
|---|---|---|---|
| goods |
166,114,048
|
123,164,229
|
74
|
| work |
127,069,408
|
57,398,008
|
45
|
| services |
80,782,171
|
78,555,575
|
97
|
| total |
373,965,627
|
259,117,812
|
69
|
In 2013, the local content share in monetary value has increased; it is conditioned by the fact that the Company is oriented to purchasing of goods, work and services from domestic suppliers. Majority of goods producers obtain and submit CT-KZ certificates for products generated.
We, being customers, do have big interest in production of new domestic products, especially in area of energy, as well as, we continue to conclude long-term agreements with domestic goods manufacturers. It will allow ensuring stable demand for their products, and respectively, will create conditions for long-term investments into production.
In its turn, investment projects, capacity expansion projects, production modernization, implemented by Samruk-Energy Group of Companies, as well as current capital costs should become the impetus for domestic producers in part of widening of list of products manufactured.
Investment projects, capacity expansion projects, production modernization, implemented by Samruk-Energy Group of Companies, as well as current capital costs should become the impetus for domestic producers in part of widening of list of products manufactured.
INFORMATION ON AGREEMENTS WITH DOMESTIC GOODS PRODUCERS:
- Kentau Transformer Plant JSC: delivery of goods: disconnect switchers, circuit breakers, circuit breakers gear and transformers in amount of 630 mln tenge.
- AZTM JSC: delivery of goods: beater, spare parts, reducing gears, blanks made from rolled metal products in amount of 182.6 mln tenge.
- Aziya Avto JSC: delivery of auto vehicles in amount of 245.7 mln tenge.
- Kazenergocable JSC: delivery of cable products in amount of 188.8 mln tenge.
- Korund JSC: delivery of goods: spare parts to mechanical equipment, tank lips, half-coupling sets and heat-exchange apparatuses in amount of 436.1 mln tenge.
- Semey May JSC: delivery of timber sleepers in amount of 126.7 mln tenge.
- KazcentreElectroprovod LLP: delivery of cable and conductor materials, box joints, lockers in amount of 251 mln tenge.
- Nur-Stroy Ltd LLP: delivery of goods: reinforced-concrete poles, add-on units to poles in amount of 252.8 mln tenge.
- ArkStoneGroup LLP: delivery of working clothes in amount of 51.7 mln tenge.
- High Industrial Lubricants & Liquids Corporation (HILL) LLP: delivery of goods: oil and lubricant in amount of 126 mln tenge.
- KazElectroMash LLP: delivery of cable and conductor materials in amount of 354 mln tenge.
- TRIBO LLP: delivery of goods: composite shoe and break shoe in amount of 30.7 mln tenge.
- DiDeCo LLP: delivery of goods: form sets, logs, posters, signs, etc in amount of 22.2 mln tenge.
- InvestStyleGroup LLP: delivery of goods: spare parts and components for heating equipment in amount of 189.4 mln tenge.
- Elnazar LLP: delivery of goods: working clothes in amount of 56.8 mln tenge.
- KazProfBezopasnost LLP: delivery of goods: working clothes and other components to ensure safety in amount of 56.6 mln tenge.
- Stal Engineereing LLP: delivery of goods: rectifier valves, valves, rectifier unit, stop valves in amount of 76.5 mln tenge.
PROCUREMENT MANAGEMENT:
a) determination of demand in material resources:
Demand in material resources is determined based on Plan of the Company development, put together according to requisitions from structural subdivision of the Company based on service and production necessity.
b) selection of supplier:
Selection of supplier is determined per results of tender conducted, request for quotation and from a single source according to Purchase Rules of the Fund.
c) execution of purchase:
Procurement in the Company is carried out in accordance with Rules of purchasing of goods, work and services of Samruk-Kazyna NWF and by organizations in which fifty and more percent of voting shares (participating interest) directly or indirectly belong to Samruk-Kazyna JSC based on right of ownership or trust management approved by Resolution # 80 of May 26, 2012 of Board of Directors of Samruk-Kazyna JSC.
Indirect economic impact
Management and Board of Directors of the Company set a goal – to create a stable company. The term stable means efficient use of resources both – of Samruk-Energy Group of Companies and public resources.
For this purpose, at separate enterprises integrated management systems are implemented, technical re-equipment of stations is carried out, requirements toward personnel and supplies are getting stronger. Herewith, big attention is paid to economic aspects, since projects in area of corporate social responsibility, improvement of environmental situation and the company growth is financed from Samruk-Energy Group’s own operating income.
In accordance with the above, all aspects of sustainable development are analyzed by management in terms of economic efficiency. For example, productivity of labor (organization of labor), raw materials used (environmental impact) and other aspects are considered at planning of activities of Samruk-Energy Group of Companies.
Sustainable development philosophy and efficiency are present in such aspects as charity, which it would seem should not be considered from economic science standpoint. Nevertheless, quality effect and size of changes to be made are taken into account when determining priority social projects.
As a result, the Company completed the Year 2013 with high profit figure (more detailed information is shown in financial reporting statements and in report from management as to results of financial and production activities, placed in internet site of the Company).