Expanding Competitive Procurement
In 2024, the total procurement plan of the KMG Group amounted to KZT 1,219 billion (excluding VAT). KMG’s procurement priorities include reducing single-source purchases and increasing the share of competitive tenders, thereby promoting fair competition and sustainable development goals.
Competitive procurement methods include open tenders, price quotation requests, e-store purchases, and commodity exchanges. In 2024, the volume of contracts from competitive procurement reached KZT 593 billion, accounting for 51 % of the total procurement plan.
Single-source purchases are applied only when competitive procedures are objectively not feasible. This approach minimizes the risks of limited competition and enhances procurement transparency.
Volume of Competitive Procurement (excluding VAT), KZT billion17
|
Year |
Goods |
Works and Services |
Total |
|||
|---|---|---|---|---|---|---|
|
Amount |
Share, % |
Amount |
Share, % |
Amount |
Share, % |
|
|
2022 |
237 |
23 |
275 |
26 |
512 |
49 |
|
2023 |
302 |
25 |
320 |
26 |
622 |
51 |
|
2024 |
258 |
22 |
335 |
29 |
593 |
51 |
17 Competitive procurement methods include tendering, request for quotations, electronic marketplace, and commodity exchanges.
Import Substitution
KMG actively promotes import substitution in procurement, guided by the requirements of the Law of the Republic of Kazakhstan “On Procurement of Certain Entities of the Quasi-Public Sector” dated June 8, 2021. A Program to Support the Establishment of New Production Facilities is being implemented, which provides for the conclusion of offtake contracts.
The main goal of the Program is to support private entrepreneurs launching new production facilities and implementing technological upgrades to manufacture products in demand by companies within the Samruk-Kazyna Fund. Offtake contracts enable companies to receive guaranteed orders for products that will be manufactured within the territory of the Republic of Kazakhstan.
In 2024, KMG’s subsidiaries and dependent entities signed 137 offtake contracts totaling KZT 58.7 billion (including VAT), contributing to the development of domestic production and reduction of import dependency.
VOLUME OF KMG OFFTAKE CONTRACTS
|
Year |
Number of Contracts |
Amount, million KZT |
|---|---|---|
|
2022 |
56 |
791 |
|
2023 |
64 |
1 687 |
|
2024 |
137 |
58 688 |
IMPORTED GOODS IN PROCUREMENT
|
Year |
Amount, billion KZT |
Share of Goods Supplied Without Certificate of Kazakh Origin (CT-KZ)18, % |
|---|---|---|
|
2022 |
90 |
23 |
|
2023 |
158 |
28 |
|
2024 |
112 |
22 |
18 The share of goods supplied without a certificate of Kazakhstani origin represents the share of imported goods delivered during the reporting period.
TOTAL VOLUME OF SUPPLIED GOODS, WORKS AND SERVICES (GWS), INCLUDING LONG-TERM PROCUREMENT CONTRACTS, AND SHARE OF LOCAL CONTENT IN GWS PROCUREMENT
|
Year |
Goods |
Works and Services |
Total |
|||
|---|---|---|---|---|---|---|
|
Total amount, billion KZT |
Local Content Share, % |
Total amount, billion KZT |
Local Content Share, % |
Total amount, billion KZT |
Local Content Share, % |
|
|
2022 |
410 |
58 |
1,290 |
90 |
1,700 |
82 |
|
2023 |
606 |
50 |
1,580 |
88 |
2,186 |
77 |
|
2024 |
503 |
55 |
1,550 |
89 |
2,053 |
81 |
Sustainable Development Principles in Engagement with Counterparties
KMG builds relationships with counterparties based on the principles of sustainable development, which include legality and transparency of business processes, compliance with contractual obligations, and zero tolerance for corruption. When selecting suppliers, KMG evaluates a combination of key factors: optimal price–quality ratio, delivery terms, and the business reputation of the counterparty.
In turn, KMG places reciprocal obligations on its partners, requiring them to:
- Comply with applicable legislation
- Ensure fair treatment of employees
- Prohibit the use of child labor
- Provide safe working conditions
- Adhere to environmental standards
- Uphold ethical business practices
These requirements form an integral part of contracts concluded by KMG with counterparties. Their inclusion helps protect labor rights, ensure decent working conditions for citizens of the Republic of Kazakhstan, and strengthen environmental safety.
KMG is confident that the implementation of these measures will help reduce cases of misconduct among partner companies and increase the level of responsibility of participants in procurement processes.
