On September 22, 2021, at 10:00 a.m. Nur-Sultan time, a live broadcast with the Chairman of the Board Mukhtar Zhumagazinovich Kereybaev . During the online conference, a Report on the activities of the National Company "Kazakhstan Engineering" was presented to the population of the Republic of Kazakhstan. The full text of the speech is attached.

Salamatsyzdar ma kurmetti otandastar, uzhymdastar, arіptester men asa құrmetti BAҚ okilderі!

Bүgin halyk aldyndagy zhyl saiyngy esep beru ayasynda, men sizderdi "Kazakhstan engineering" ҰK" shareholder қogamynyn қyzmetinіn өtken zhyl nәtezhelerimen, sondai-ak zhan and zhosparlar turaly aitatyn bolamyn.

As the Head of State noted in his annual Address, today the state is faced with the task of rebooting the military-industrial complex and the Military Doctrine. Being the largest military-industrial holding in the country, Kazakhstan Engineering does a lot of work in terms of strengthening the defense capability, realizing the tasks set by the top leadership of the country.

About company

JSC “National Company “Kazakhstan Engineering” was founded in 2003 and implements the state policy in the field of production of defense, civil and dual-use products. Since 2018, the State has been the sole shareholder of the Company; The Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan has the rights to own and use the state block of shares.

At the moment, the Company's group includes 17 operating enterprises, which employs about 5,000 people.

The enterprises of the national company produce a wide range of both military and civilian products: these are weapons and equipment of the ground forces and naval forces, aviation, air defense systems and equipment, special-purpose equipment and property, IT technologies, logistics and technical support for troops, radio electronics and communications, as well as equipment for the oil and gas, energy, medical and railway industries. In general, each enterprise of the Company has unique experience and competencies that allow Kazakhstan Engineering to successfully solve the tasks that the state sets for us.

Current situation. Fulfillment of targets.

In 2020, despite the coronavirus crisis, the Company's revenues exceeded the previous year by 14%, amounting to almost 100 billion tenge.

In 2020, for the first time in the last five years, it was possible to reach a net profit of 464 million tenge and pay dividends to the state for 325 million tenge. At the end of 2021, it is planned to increase the indicator of income from sales to 101 billion tenge, and net income to 1.65 billion tenge.

According to the results of activities for 6 months of 2021, income from the sale of products and services was formed in the amount of 23,107 million tenge with a plan of 11,728 million tenge. The volume of concluded contracts (taking into account rolling contracts) is 99.1 billion tenge, which is 98.1% of the plan.

Completed projects

"Kazakhstan Engineering" has rich experience in the implementation of investment projects. Since 2011, the Company has implemented ten investment projects worth 19 billion tenge.

For example:

• "Creation of production of helicopters on the territory of the Republic of Kazakhstan" LLP "Eurocopter Kazakhstan Engineering" in the amount of 2.3 billion tenge;
• "Modernization of the production of Semey Engineering JSC to ensure the modernization and overhaul of armored vehicles" in the amount of 2.8 billion tenge;
• Creation of a center for the production of electronic-optical devices in the territory of the Republic of Kazakhstan (Kazakhstan ASELSAN Engineering LLP) in the amount of 7.9 billion tenge;
• Organization of production of computer equipment at the Kirov Plant
• Production of complex block modules for providing water supply to remote small villages with a population of less than 200 people.

Reference:

• "Development of foundry production on gasified models at Tynys JSC"
• Production of ceramic composite armor plates (JSC Tynys)
• Production of printed circuit boards of the 5th accuracy class with a wastewater treatment system and mechanical control equipment (JSC "Plant named after S.M. Kirov")
• Establishment of production for the manufacture of power boiler equipment at PZTM JSC
• Modernization of the machining production of oil industry products at Munaimash JSC
• Kirov Plant JSC: "Organization of production of multilayer printed circuit boards"
• Development of offshore shipbuilding at JSC "Ural Plant "Zenit" to master the production of new class ships with a dry weight of up to 600 tons and other large-sized products
• JSC "PZTM": "Technological modernization of JSC "PZTM" (funds of the Republic of Belarus)
• Semey Engineering JSC: "Creation of a center for engineering and maintenance, repair and modernization of military and civilian heavy equipment"
• LLP "Steel manufacturing": "Kazakhstan Cartridge Plant"

Current projects

At the moment, active work is underway on 13 promising projects, of which eight are in the military sphere, five are in the field of civil production, in particular:

• production of aviation target complexes;
• assembly and production of the Zhuldyz heavy attack drone (together with Turkish partners);
• production of modern AK-12, AK-15 assault rifles (together with Kalashnikov Concern JSC);
• production of a route medical rescue station for the Ministry of Emergency Situations of the Republic of Kazakhstan;
• production of light aircraft "Baikal" (together with Russian partners);

It should be noted that most of the projects have good export prospects and, more importantly, involve obtaining advanced technologies for their subsequent development.

It is also considering the involvement of the Company in the implementation of such large infrastructure projects as the construction of a warehouse for the Ministry of Defense of the Republic of Kazakhstan and a shipyard on the coast of the Caspian Sea.

Thus, NC Kazakhstan Engineering JSC adheres to its Development Strategy, the main goal of which is to establish the Company as a center of competence not only for its subsidiaries, but for the entire Kazakhstani defense industry.

Development priorities

In the long term, our main development priorities are entering the international markets for military and civilian products of the Company's enterprises.

Work is being carried out in the following areas:

• high-tech production
• pricing
• organization of a full cycle for the provision of goods - the transition from production to production with after-sales service. An example, complex block modules for water treatment at JSC Research Institute Gidropribor. In addition to installation, we will carry out work on further service.
• Export orientation: at the moment, our production facilities have sufficient potential for a long-term and successful entry into foreign markets.

The presence of engineering and technical personnel, scientific base, research and testing laboratories, carried out transformations within the framework of investment projects facilitates the task of overcoming competition, but at the same time does not cancel additional efforts to enter foreign markets

The Company plans to develop international marketing. The Company plans to develop a highly professional marketing service, and a system of after-sales service will be established in subsidiaries.

In addition to focusing on foreign markets, a high role is given to the development of the domestic market. As a national company, we are developing cooperation with other private sector companies, strengthening non-state cooperation and marketing of goods.

In the context of the state of emergency associated with the spread of coronavirus in 2020, the Company's enterprises were mobilized for nationwide measures aimed at eliminating the spread of COVID-19. Thanks to the efforts of the teams of the Tynys and Kazakhstan Aselsan Engineering factories, it was possible to establish the production of ventilators necessary for the healthcare system in a short time. Part of the production was sent to the partner countries of Kazakhstan, which were in dire need of this equipment.

"Plant named after S.M. Kirov” has rapidly mastered the production of computer technology, thereby contributing to the provision of a continuous educational process for schoolchildren and students in new conditions for Kazakhstani education.

Example: JSC "Plant im. CM. Kirov is a domestic manufacturer of computer equipment under its own brand ZIK Computers. In 2020, the plant produced and sold more than 48.5 thousand units of computer equipment (personal computers - more than 2.4 thousand, laptops - more than 39.3 thousand, tablets - more than 6.8 thousand units).

A direct LDP (local device partner) agreement has been concluded with Microsoft Corporation, which allows the production of products with pre-installed software. The long-term cooperation agreement signed with CHINA GREAT WALL TECHNOLOGY GROUP CO., LTD (China) ensures the supply of components for the production of a full line of computer equipment (server, computer, laptop, tablet, monoblock).

The company works in the system of MIIR RK. Since 2018, the State has been the sole shareholder of the Company; The Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan has the rights to own and use the state block of shares.

Since, first of all, Kazakhstan Engineering is an industrial enterprise, to a greater extent the defense industry, but the industry, and taking into account the tasks set for the diversification of production and the development of exports, we focus on the development of Industrial potential. Being in the structure of the Ministry of Investment and Development of the Republic of Kazakhstan, the Company has direct access to support tools and opportunities to make proposals for improving the regulatory legal acts, which in turn allows us to realize our potential.

Nazarlaryңyzga rakhmet.