Local content in KMG procurement achieves 78% as of 1st half of the year 2019
This is KMG Procurement Managing Director Yessen Kairzhan has stated in his speech at the Machinery Builders Forum in Nur-Sultan. This indicator is much higher than the Kazakh oil and gas sector average. Local content share in procurement was increased, in particular, thanks to implementation of category-based procurement management system, which is an important integral part of KMG Group's business process modernization program.
"Category management, where several KMG Group companies pool, within procurement strategies, their needs for goods and services of the same type, has proved effective. Now we have similar procurement strategies pending for 67 more categories of goods, works and services qualified. Currently, 16 of them are under implementation and we are in progress with drafting of 17 other procurement strategies," said Yessen Kairzhan.
An example of pilot Production and Drilling Pipes procurement category strategy was given during the forum. Based on the said strategy KMG signed contracts for long-term supply of tubing with local manufacturers KSP Steel and Kaskor-Mashzavod with total value of the contracts over 40 billion tenge. Last year KMG procured all of the tubing, sucker rods and transformers for oil production from local manufacturers.
It should be noted that cooperation with domestic manufacturers is a priority task for KMG. A local import substitution office has been established to develop and support new manufacturers.