Head of the Association of Kazakhstan Automotive Business: “When the ROP was introduced, the price tags for new cars did not change”
Author: Anatoly Ivanov, http://informburo.kz/interview/glava-associacii-kazahstanskogo-avtobiznesa-kogda-byl-vvedyon-rop-cenniki-na-novye-avtomobili-ne-pomenyalis.html
Photo by Anatoly Ivanov
President of AKAB, Chairman of the Board of Directors of Allur Auto Andrey Lavrentiev
Exclusive interview with the President of the Association of Kazakhstan Automotive Business, Chairman of the Board of Directors of AllurGroup Andrey Lavrentyev to the informburo.kz portal.
It was assumed that during our meeting with the president of AKAB, chairman of the board of directors of the AllurGroup company Andrey Lavrentiev, we would only discuss the topic introduction of in Kazakhstan, expanded obligations of car manufacturers and importers. In fact, it turned out that, perhaps for the first time, almost all the problems inherent in the automotive industry of Kazakhstan were considered without any cuts.
– Andrey Sergeevich, the first question that arises when mentioning the recycling fee is related to possible dissatisfaction on the part of the countries that are members of the WTO. We all remember how many complaints appeared from the European Union and the United States against Russia when they decided to introduce a recycling fee. Did they also pay attention to our “bad behavior” in Europe and America?
“No one has made any claims against us.” I'll explain why. People are used to saying “recycling fee,” but in fact, we, unlike Russia, have a completely different legal form. In the Russian version, the form and recycling fee are clearly a discriminatory measure. This was proven during numerous disputes in the United States and European countries at a time when relations with Russia were still unspoiled by Crimea.
– Are we talking about the period 2010-2011?
- Absolutely right. The Russians were then called to a discussion panel, where they lost. First of all, because the Ministry of Industry and Trade introduced fees that clearly corresponded to the reduced customs duties one to one. At the same time, Russian manufacturers did not pay them. For this reason, four comments were made on the introduction of this tax by Russia. In theory, we, as a state that has joined the WTO, have the right to introduce any tax within the country that we consider necessary. But here it is important to remember that it should not be discriminatory in relation to either any product or its own producers. That is, we want there to be a 100 percent tax or excise tax on a car - it doesn’t matter whether it’s new or old - we’ll introduce it. But for everyone. Second: in Russia the new tax was called a “recycling fee,” which is actually an environmental norm. And it was not introduced by the Ministry of Environment of the Russian Federation, but, as I noted earlier, by the Ministry of Industry and Trade. Moreover, this was done in relation only to those items and goods that are produced in Russia. But don’t imported bottles, tractors or combines produce dirt and cannot be disposed of?
– From an environmental point of view, almost everything pollutes the environment.
- Exactly. Everything gives dirt. But in Russia they clearly responded to the reduction in customs duties with this fee. Kazakhstan took a different path, adopting a fundamentally different concept. The government of the country, together with business representatives, analyzed all the regulatory documents, including those of the WTO member countries: what measures were taken there, what could be done, what mistakes were made. Therefore, our concept is absolutely clear to all WTO participants and officers. Within its framework, the so-called extended obligations of manufacturers and importers (ERO) were developed. – Auth.), primarily to improve the environmental situation in the country.
– Throughout the country, and not just in cities?
– Absolutely right, because, to put it mildly, things are terrible with the environment: starting with heptyl and ending with standard household waste. And in principle there is no industry for their disposal in the country. Accordingly, creating it with state money is a costly business, so they wanted to give it to a public-private partnership, to business, so that we could have some kind of recycling system for goods that are going out of use. I emphasize, any goods.
– Like in the United States or Germany? There, waste disposal is a very serious business with multi-billion dollar revenues.
- Yes. We are talking about 3,5 thousand items of goods with HS codes (commodity nomenclature for foreign economic activity. – Auth.) that exist in the world. And each of these positions is subject to disposal. Here the questions arise: how should they be disposed of, how quickly, which sectors of the economy are currently ready to dispose of their goods, and which ministry should be responsible for this. As a result, we came up with the concept of a “green economy”, which allows us to attract modern processing technologies to Kazakhstan. It is based on a completely normal and understandable principle: every resident of Kazakhstan has the right to breathe clean air and drink clean water. As part of this concept, the Government of the country developed legislation that was quite extensive in scope, the implementation of which was initially entrusted to the Ministry of Environment and Water Resources. After its abolition, the corresponding division of the Ministry of Energy is responsible for the “green economy”.
– Did this happen after the optimization of the Government in August 2014?
- That's right. Please note that in our country this is not the Ministry of Industry, as in Russia. So, this “extended responsibility” means that any manufacturer within the country, any importer, both an individual and a legal entity, must pay a so-called fee, which is actually an environmental tax. All money received will go to a non-state fund, which is determined by the state, as is actually customary throughout the world. This private foundation takes on the responsibility of not only collecting the incoming money, but also building a recycling industry in the country. The first who were ready for the new situation, who were already knocking on the doors of the Government, were the automobile industry, automobile dealers and distributors.
– Is it really only the automotive industry?
– Yes, we are objectively ready for this. We literally fought for this. When the Government collected information on all the most polluting objects, cars came out on top. Theoretically, it would be possible to oblige all our citizens to pay a recycling tax of at least $100, as has been done in some countries. But then social discontent would arise. Everyone understands this. Therefore, we came to the following formula: gentlemen, importers, you use the market of our country, gentlemen, producers, you also have a number of preferences, so let’s together make sure that, thanks to your money, we have an industry that will cleanse our entire country. Most importantly, according to this concept, the consumer does not have to pay more for goods. For this reason, the Government waited until the moment when WTO duties were reduced. I will say more, based on the results of 2014, 165 thousand people who bought new cars then had no idea about the amount of customs duties, excises and taxes. They came to the car dealership and asked how much this conventional bread cost. Bread costs 100 tenge. How much is included in this price for the operation of the combine, the sowing campaign, and so on, is absolutely not interesting to them as buyers.
- It’s clear that he is primarily interested in the final price...
- This is true. To be honest, we have been achieving this for a long time. But the Government asked us to wait. And they were right: when customs duties were reduced in connection with joining the WTO and “extended obligations” were introduced, the price tags for new cars did not change. That is, despite the fact that there was a fuss in the press, objectively speaking, the cars did not become more expensive. As, for example, a Kazakh car cost around 10 thousand dollars, that’s how it costs. In fact, the average person does not consider how much the customs duty has decreased with the simultaneous appearance of “extended liability” or the ROP has increased with a decrease in excise taxes on the import of equipment. It doesn’t make much difference to him when he receives a product at the price he’s used to. Moreover, now the cars have even become cheaper due to the fact that we have managed to somewhat curb the appetites of distributors and importers and do at least some small-scale localization at our automobile factories, and so on.
– Can you tell us a little more about localization? What is its current percentage?
– There are nuances here. If we talk about commercial equipment, then we already have over 40%. It's a little easier with her. AllurGroup production sites have mastered not only welding and painting, but also booths, bodies, concrete mixers, and so on, completely localized in the country.
– Do you make it yourself from your own materials?
– Automobile factories themselves do not directly produce bodies or concrete mixers, but enterprises have appeared in Kazakhstan that have established their production. For example, today fire trucks are made in Uralsk, which we supply to customers. As for passenger cars, there are some nuances here. The process of painting and welding them is quite complicated. If in commercial vehicles, due to their small volumes, we make them a slipway, that is, people work with welding machines, and in some places we also have conductors, then in the case of passenger cars we cannot do without robots. The requirements are completely different. The same painting is no longer just a box, where we paint one cabin in half an hour, these are special cameras with a very high quality of body painting.
Photo by Anatoly Ivanov
Toyota assembly in Kostanay
So far, we have only one plant in our country that has completely switched to welding and painting. This is a plant in Kostanay. There is also a plant in Ust-Kamenogorsk, where a similar line will be installed over the next year or two, when they begin implementing a large project with AvtoVAZ. In general, for passenger cars, localization has already reached 33% on average for all manufacturers, but by 2018 we expect to increase it by another 20%. Theoretically, this can be done at the expense of Russia, whose components are quite suitable for us, but the Government has quite strictly set the task of ensuring an increase in localization exclusively at the expense of Kazakh manufacturers.
– And do you think this task is feasible?
– Last year I was only concerned with this issue. Conducted four roadshows around the country in order to find someone who could at least do something for the production of passenger cars.
- And what is the result? Have you found any?
- How to say. Two Kazakh companies, Zhersu and Kainar, produce batteries. Auto glass, however, for now for commercial vehicles, is made in Karaganda. There, in Karaganda, the SanTekhMontazh company began producing mini-stamps for bumpers. We managed to agree with the Kazakhstan Engineering company to start producing wires. Although all this together gives an additional 5,5% of localization.
– It’s not too thick somehow, don’t you think?
- The problem is that most of the companies with which we negotiated say: give us money - we will start making it, bring it to us, do certification for us, bring this, provide that. Clearly, this approach does not suit us.
– Yes, it looks like it’s a long shot for us to reach the localization level of Toyota or Nissan...
- Alas, that is still the case. That’s why we turned to PWC (the international consulting and audit company PricewaterhouseCoopers) for help. – Auth.) and China Manufacturers Corporation, which in China is engaged in the creation and financing of industrial zones. As a result of joint work, we came to the conclusion that if the Kazakh automakers themselves do not address this problem, then no localization will appear within the country. So now we have a new approach. Just three weeks ago, on February 24, we opened an industrial zone with an area of 60 hectares in Kostanay, which was attached directly to our plant, and concluded a memorandum with the regional akimat and the Ministry of Industry and Development. To develop this zone, we invite Chinese investors to set up the production of spare parts and enter into a firm contract with them to purchase their products for 10 years. Moreover, since they will produce much more of the auto parts we need, this is somewhere around 30%, we gave them the entire Kazakhstan market of spare parts for used cars. We allowed them to choose our most popular obsolete car models, for example, the Toyota Camry, for which the production of spare parts no longer requires licensing and there is no pressing question as to whether the part in it is original or a duplicate.
- Even so?
- Yes. At the same time, we promised them that we would not allow the emergence of parallel imports of spare parts and would give additional preferences in the form of investment contracts for a period of 5 to 10 years. In return, with their own money, or with the money of the China Manufacturers Corporation, which finances such projects, they create production facilities in our country and themselves develop the distribution of their goods in the country. This, by the way, is the only way today to increase localization in car production in our country. Believe me.
– Well, with the help of the Chinese, Kazakhstan will increase its car production capacity on its territory. But we also have certain obligations within the EAEU with Russia and Belarus, where cars are also produced. How was the issue resolved with them regarding the introduction of the same “extended obligations” in our country?
– There are two aspects here - legislative and moral, which take place in the relations between our countries. As for the legislation, according to the signed agreements, we are obliged to notify our partners about the introduction of new taxes. At the same time, none of the EAEU partners can introduce restrictions in relation to the country that has implemented tax changes. As expected, Kazakhstan notified everyone in advance that from 2016 it will introduce the principle of expanded obligations of manufacturers and importers for the collection, processing and disposal of waste. True, so far according to four HS codes: cars, motor oil, tires and batteries. Moreover, they warned that within five years, as our industries are ready, we will introduce ROP for all codes and product groups without exception based on the complexity of pollution and cleaning. That is, we have fully completed the formal part.
– Have we introduced ROP since January 27?
- Absolutely right. On this day, a Government resolution was signed directly regulating the introduction of these norms. As for the moral part of introducing the EPR, we received similar messages from both Russia and Belarus even earlier, according to which they obliged us to pay their openly discriminatory taxes. Before this, the Russian Federation assured us that no taxes would be introduced for Kazakhstan as part of restrictive measures to support its market. And then they told us: well, excuse me, gentlemen, such is life.
– I would like to clarify, when did this happen?
– This happened in 2012. Although, since the end of 2010, we have had intensive negotiations with Russia, during which we convinced the Russian side not to delay, for example, our cars, since we have investment plans, including to increase cooperation with Russian manufacturers. However, we were simply presented with a fact. In this regard, I cannot say that we took revenge on both the Russian Federation and the Republic of Belarus - we simply followed exactly the same pragmatic path as required by contractual relations. Moreover, from a moral point of view, all Russian and Belarusian enterprises were offered what no one offered us on their part: to place their production sites at existing enterprises of the Republic of Kazakhstan for the money of Kazakh investors.
Head of the Association of Kazakhstan Automotive Business: Hand over your old car for recycling and buy a new one at a discounted price
– Andrey Sergeevich, to whom exactly were the proposals sent, can you say?
– For example, we sent a letter to the management of the Ulyanovsk Automobile Plant. In it, we noted that they can offset their expenses under “extended obligations” in Kazakhstan. They will not be able to avoid the new tax, since these fees are mandatory for all manufacturers, but our state can provide them with a number of preferences that will one way or another help offset the costs of EPR. For example, a preferential financing system. This is the most requested product we have today. There is a waiting list for the next 3-4 months. Because getting 4% in tenge for leasing or a loan is the most unique conditions that can only exist during a crisis. This is despite the fact that all other lending in our country has now stopped. In addition, we noted that if they begin to produce goods in Kazakhstan, they will be able to participate on a priority basis in all tenders held by state and national companies, as well as receive long-term contracts.
- And they agreed?
– They thought and agreed! UAZ decided to start producing its cars here. An agreement has been reached between our partners from the Virage company and GAZ to assemble the GAZelle Next light-duty vehicles. Asia Auto is negotiating with AvtoVAZ to begin large-scale production of all their popular models in our country. I must say, this is our biggest victory! Because if we talk about money, last year Russian cars were sold on the Kazakhstan market only by our official dealers in the amount of more than $2 billion. I emphasize that we are talking only about purely Russian brands. More than 35 units of the Lada alone were sold. And if these cars are produced within the country without the welding and painting process, but only through logistics at the level of established assembly plants within the country, then from 000 to 5 thousand people will get jobs.
– All this, of course, is good, but their brands will still be cheaper on the Russian market. Therefore, I would like to clarify. If a person buys the same Lada or UAZ Patriot in Moscow, Omsk or Saratov, will he have to pay a recycling fee when importing it into Kazakhstan?
- Undoubtedly! And it doesn’t matter whether he is an individual or a legal entity. There are, however, nuances here. If you are an individual, then by purchasing a car in the Russian Federation, you are exempt from value added tax. But here it should be taken into account that if you sell a car purchased in Russia within a year after import, you will pay both a recycling fee and VAT. We brought two cars - pay for both. It's like real estate law. The new rules came into force in May last year. Before them, any person could import at least 10 cars into the country and, without obtaining the status of an individual entrepreneur and paying taxes, calmly sell them on the market. This shop is now closed.
– By the way, are the cars produced at factories in Ust-Kamenogorsk and Kostanay exported to Russia?
- No.
– They don’t allow you into their market?
– It’s not about the export ban. You see, they compensate their enterprises for the recycling fee. Here we must also add hidden subsidies for labor, for maintaining Euro environmental standards, for research and development work. All this together is a kind of barrier for us, since the difference in the cost of the final product is quite significant.
– So our cars are significantly more expensive?
- Yes, sure. But it’s more expensive if we take our cars to Russia. Because as soon as we cross the border with the Russian Federation, we immediately pay their recycling fee. For this reason, we were forced to review our entire production line of cars, which we considered unique, hoping to organize their production taking into account the needs of the Russian market, and eventually review and completely close them.
– Which cars had to stop production?
- Almost everyone! This applies to the SsangYong car line, which we intended to introduce to the Russian market. In particular, we had special hopes for the SsangYong Nomad. We expected to supply Geely car models to Russia. But Russia did not take our interests into account. In this regard, we had to reconsider both our prospects and the model range of cars. We also negotiated directly with car manufacturers, without involving their Russian distributors, who treated us dishonestly, to put it mildly. As a result, we agreed on the principles for separating the models.
- And what does it mean?
– This means that parallel models will not be produced in Russia, Belarus and Kazakhstan. For example, we now have agreements with Peugeot-Citroën. We have agreed that the Peugeot-408 model will be produced in Kaluga and delivered to us. The production of one of the most popular on the market, Peugeot-301, is only in Kazakhstan. In addition, the Peugeot-Citroën concern will buy the 301st model from us in accordance with the Take-or-Pay contract (a norm for constructing contracts for the supply of certain types of goods to large buyers. - Ed.). To do this, we invest our money in welding and painting equipment and allocate capacities. They finance the supply of a line of mechanical engineering kits for us. The Peugeot-Citroën concern takes back the export cars we produce and distributes them in Russia. That is, we relieve ourselves of all issues regarding the payment of the recycling fee and the creation of dealership centers. We are very happy with this!
– But we don’t take Citroën cars from them?
- No, we’ll just take it! We are currently developing a project to produce the third generation Citroën Elysee model. This will be a sedan, not a hatchback. Moreover, they help us with localization, since the President of the Peugeot-Citroën Corporation, Carlos Tavares, during a meeting in Paris with Nursultan Nazarbayev, promised to bring this figure to 70% by 2020. By the way, a similar story happened with Iveco cars. We have never thought about exporting them. But due to the changes that have taken place, Iveco Russia has become interested in our Iveco Daily commercial vehicles and Iveco 682 heavy trucks, having concluded contracts with us, according to which it purchases these models only in Kazakhstan.
“Aren’t these some kind of memorandums, by any chance?”
– I emphasize that these are firm contracts signed by the Minister of Investment and Development and the Akim of the Kostanay region!
– That is, our automakers have no problems with the sale of commercial vehicles on the Russian market? Accordingly, and unlike passenger cars, there is no decline in sales?
- Not visible. For example, Hyundai commercial vehicle models gained access to the Western Siberian market. This year we will begin exporting them to Russia. Due to the high localization of their production here, they turned out to be competitive there.
– And then the products of the Chinese automobile industry will appear there and...
- It's OK. Because some Chinese car models will be produced here.
- In Kazakhstan?
– Yes, we have chosen the path of rapprochement with Chinese automakers. I'll explain why. In fact, today China is the leader in the number of cars assembled and sold on the market annually.
– I’ve read that about 20 million new passenger cars alone are sold there a year...
– Their numbers are actually gigantic. And they will very soon make themselves known loudly. Already, the build quality of their cars is quite high. They work with leading design studios, such as Giugaro. And receiving European certificates says a lot.
– Are you talking about Geely products?
– And about Geely, and about Changan, and about Chery, and about Lifan, and about JAC, that is, about those Chinese companies that are aimed at foreign markets, since they no longer have enough domestic ones. Their volumes are simply amazing! We say that Toyota produced about 8 million cars last year. We call her a leader. Meanwhile, only SAIC (Shanghai Automobile Corporation. - Ed.) during the same period produced 11 million cars of various models.
Photo by Anatoly Ivanov
Toyota assembly in Kostanay
– Yeah, who really is the leader then?
– The fact of the matter is that we know practically nothing about China! But their cars are no worse than AvtoVAZ products. I think that very soon we will see a real expansion of the Chinese automobile industry into world markets. In theory, in 5 years, Chinese car manufacturers will repeat what the Japanese did in the 60s and 70s of the last century, and the Koreans did in the late 90s and early 2000s. That is, the Chinese can become the main low-cost automobile carriers in the world. That's why we decided to look for Chinese companies as our strategic partners. In addition, automobile corporations have become leaders in the development of electric vehicles.
– We must assume that not everyone will like the idea of closer cooperation with China.
– There is such a thing, because we had and still have a certain phobia towards China. They say that they need our land, that they dream of taking over our agriculture, that they want to marry our girls.
“But such conversations do not appear out of nowhere. Is not it?
- Fair point. But because of these fears, we don’t go into the forest - we’re afraid of wolves. And in that forest, besides wolves, there are many other things, including useful ones! There are berries, there are mushrooms, there is firewood. We don’t know about this, because there are wolves there! In fact, they don't need our land. In any case, in the auto industry we have no phobias towards the Chinese. Since our auto industry is just beginning, we need to learn from someone. Why not from our eastern neighbor? And then, they are ready to finance our joint ventures.
– Does that mean Europe doesn’t finance it?
– You know, sometimes strange things happen here: we financed the construction of the Peugeot line with money... from Chinese investors. We asked them: do you want to produce JAC cars in Kazakhstan? They immediately answered: very much!
– Why JAC?
– In China itself they believe that cars of this brand have great export potential. In addition, the company itself, which owns the JAC brand, easily contacts us. Although it should be clarified here that the CMC Corporation (China Manufactures Corporation. – Ed.) itself selects the brands that it considers the most promising for promotion to world markets. In China, as in its time in the USSR, there is a State Planning Committee, where they look at whether a model has a certificate and the attitude towards it on the part of European consumers. Even the psychological perception in Europe of the car itself and even its badge is taken into account. At the same time, they offer us the right to choose cooperation with various automobile companies. True, there were cases when, despite our interest in some brands, they did not recommend them to us. When making a decision, the state-owned company China Manufactures Corporation is obliged to take into account all risks, since it finances the project itself and even receives certificates. That is, the desire of the Chinese to work is incredible. I think it all comes down to the fact that China needs a wicket.
– A gateway to Europe through Kazakhstan?
- Certainly! Moreover, with access to both the European and Russian markets. And it benefits us. First, we learn. Secondly, they finance us, and resources are very difficult to find in the current financial and economic crisis. Thirdly, they train staff and give us licenses. Fourthly, they announced their participation in the creation of a Kazakh brand of electric vehicles. It is important to understand here that today's Chinese industry is not Abibas sneakers or clothes with a Plaid tag. The whole world is already reckoning with her. Take, for example, the Shanghai Auto Show. Since last year, this has been the largest automobile exhibition both in terms of area and the number of innovations presented. And Detroit used to be number one. Well done Chinese! That’s why we are looking in their direction, because we believe that, given the crisis and subsequent turbulence, the low-cost segment will very soon take a leading position in the sales markets. After all, even now, when we purchase a new car, we don’t throw grandiose fuss about it, as we did just 20 years ago when buying some Zhiguli. People's attitude towards cars has changed a lot.
– Andrey Sergeevich, let’s still return to our main topic. Did all Kazakh dealers and distributors of automobile brands react positively to the introduction of “extended liability”? There is information that there were many dissatisfied...
– Actually, everyone, with the exception of the “grays”. This is because this program provides a motivation system for both producers and consumers. It's all about the cycle of finance. For example, we took one and a half thousand dollars from the importer to create a recycling industry in the country. At this moment, a certain person hands over his old car for recycling. In return, he receives a certificate that will allow him to purchase a new car at a good discounted price. Thus, it turns out that even if the importer paid the ROP, and his cars are of high quality and he imports a lot of them to Kazakhstan, then the person who scrapped his car will come to him for a new one.
– Okay, but why then is the recycling fee in Kazakhstan higher than in Russia and Belarus? There is also incentives for buyers.
- Will explain. In Russia, recycling fees replace customs duties. We have a different approach, which is based on the needs of the market, on the required amount of money to launch a recycling system. Moreover, our rates are temporary. As the industry develops, the base rate should decrease. You see, in order for Kazakhstan to perform well at EXPO 2017, our industry must be formed. We must start recycling the car by at least 70-80%. What does it mean? This means recycling batteries, rubber, plastic products and metals. We are not talking about acid or oil yet. It is necessary to ensure that they are at least not poured onto the ground, but burned out. For now, it turns out that our slogan is “Future Energy”, but in reality...
– We don’t have shredder factories. Right?
- No one!
– There is only one car dump in Almaty – on Ryskulov Avenue...
“And we saw for sure what condition she was in.” Therefore, the amount was calculated that would allow the wheel of the recycling industry to spin. That is, the money actually received should be enough for them to return, stimulating people to recycle their old cars. This is the first part. The second part will go directly to creating the industry. By the way, the state will not take a single tiyn of money for itself.
– What about the presence of a monopolist in the form of Operator ROP LLP?
– This is easily explained. Initially, within the framework of the “extended obligations” program, it was proposed to transfer the created recycling industry either to a competitive environment, or to limit it to 6 operators in the regions of the country. But the Government soon came to the conclusion that there should be no room for liberalism when launching such a large-scale project. If we want to create a recycling industry in the country in a short period of time with specific resources, then we only need one operator, from whom we can subsequently hold ourselves accountable for the work done.
– Is this a private company?
– Yes, it’s private, but it was appointed by the Government based on the results of a tender. And they weren't the only ones. Several operators participated in the tender. Yes, this company received a monopoly, but a monopoly for a specific result and a specific strategic plan for localization as a percentage. And there will be serious demand for this.
– What if they can’t handle it? What will happen then?
– I still think that this company will cope, because they will not be completely independent. In accordance with the adopted concept, a huge number of companies and processors that already exist in the country will be involved in the creation of the recycling industry. These are both subcontractors and mini-operators participating in the overall process. That is, it cannot be said that Operator ROP LLP monopolized everything without exception, receiving money from recycling fees. The operator, for example, will not be able to cross out any recycling companies at its discretion, taking their money.
– How many factories should appear in the country?
– According to the concept, there will be 4 shredder plants in Kazakhstan: in Almaty, Astana, as well as in the west and north of the country. There it is created so that everything can be processed into smaller purified fractions and transport metal and plastic to the center. Our base center is the Karaganda Metallurgical Plant, which will process the resulting materials and produce metal sheets at the output. By the way, even the purchase of equipment for obtaining automotive metal sheets is included in the costs of the “extended obligations” system. Accordingly, the operator has the task of not only recycling old cars, but also obtaining finished products from recycled materials. Let it be some kind of fittings, but the main thing is the organization of the production of metal sheets for our automobile production. Additional investments for Karmet require only 17-18 million dollars. In general, the EPR operator will finance any enterprise that will create a finished product from recycled materials. And we are not just talking about products for cars. Let it be some kind of buckets, paths or lids for jars. Do not burn, bury or pour out, but do specific things, as is written in the fundamental document adopted at the legislative level called “Strategy for Extended Obligations of Manufacturers and Importers.”
- I see. Thanks. Now we all can only watch how the recycling industry will be formed in the country.
“And she will appear, I have no doubt about it.”