"Kazakhstan Center for Industry and Export "QazIndustry" JSC within the framework of assistance to domestic suppliers in concluding long-term contracts and offtake contracts on April 4, 7 and 13, 2022 held meetings with Kazakhmys Corporation, "ArcelorMittal Temirtau" JSC and Kazzinc LLP to discuss the import substitution program.

During the meetings, the most common barriers to concluding long-term contracts with domestic manufacturers were identified and the possibilities of concluding offtake contracts with domestic manufacturers were discussed.

Enterprises have identified the following barriers when concluding offtake contracts.

- The issue of pricing in the conclusion of long-term contracts.

Subsoil users report that due to fluctuations in the cost of production in the domestic market, it is often impractical to conclude contracts for more than 12 calendar months.

- High risk when investing in new production.

This barrier implies that the conclusion of an offtake contract and investments in new production do not guarantee high quality products and may interfere with the company's business processes. In order to ensure a stable production process, goods are imported or purchased from local large suppliers that meet international standards.

- Not being able to provide technical specifications to domestic suppliers.

Due to the fact that foreign suppliers of goods do not provide detailed technical specifications at the conclusion of the contract, subsoil users are not able to evaluate and compare with the products of local suppliers properly.

Also, on April 14, 2022, meetings were held with the KAZ Minerals and ERG group of companies, where subsoil users also noted that non-compliance with international quality standards and technical requirements of products manufactured by domestic manufacturers is the main barrier to concluding long-term contracts. In addition, according to subsoil users, the design capacity of domestic producers does not always cover the needs of companies.