Interviewed by Kamilla Ormanbetova.

Temirzhan Kairatovich, on March 16, 2022, you wrote in detail about your vision and plans, and promised to openly engage in dialogue, including on social networks. Thank you, this is confirmed not in words, but in deeds. During this period, you posted a lot of useful information and personally answered questions. Have you changed your vision, what are the results of work and future plans?

- Yes, thank you, we will continue to openly cover our activities. There are aspects related to the execution of the state defense order, which, according to the Law, I cannot disclose. Unfortunately, not all colleagues picked up the initiative to run social networks on their own, but our team is rejuvenating, new modern patriotic leaders are coming. We will continue to develop in this direction. During this period, we began to be called - a production holding that manufactures products, including military and dual-use. We are moving away from the stereotype of an exclusively defense holding company. It is a pity that our pages have few readers, because we publish reliable information only here. As recently journalists called me and asked: “Why are you selling the largest defense plant MunaiMash?”. Funny, but very distracting. Many questions can be answered by sending a link to information from a website or social networks. I urge you to believe only official information, and not bloggers and couch experts.

In general, I spoke in detail about the plans and the current situation in an interview dated 10/06/2022, at the link https://ke.kz/ru/press-center/news/2253/ . Will not be repeated. There is a specific vision, goals, we continue to work. At the same time, many questions and problems have not yet been resolved.

I continue to openly criticize the organization of the defense supply process. Having reported in detail on the current situation to the Prime Minister of the Republic of Kazakhstan, I was instructed to present my vision of the methodology that regulates these processes. We assembled a team and developed the concept of a new Law aimed at developing the defense industry. The hypothesis is very simple - the new Law stimulates the development of Kazakhstani industry to produce high-quality products for the needs of law enforcement agencies.

You talked about human capital. What situation?

- The situation is very difficult. There are no specialists. 4300 units in the holding structure. More than 800 vacancies. From cleaners to engineers, there are no personnel. The pride of the holding is the human capital, which I wrote about in my first post, has literally grown old, almost everyone is retired. Modern, young, smart, patriotic, literate, decent - units. But I do not intend to sit and wait for someone to respond to vacancies. We will train our personnel for our specific needs: aviation, shipbuilding, repair and maintenance of equipment, instrumentation and other areas. We are creating a Corporate Fund - we will identify children, schoolchildren and students, train them, pay scholarships, sign contracts for work at our enterprises. We will create conditions for personnel - housing, social package, etc. We can provide an interest-free loan for housing. But for all this, you need to be sure that we will be provided with work, provided with orders. And there is no certainty, because our clients do not give any specifics.

You wanted to organize intra-industry cooperation of all enterprises in the engineering, instrumentation, IT, manufacturing sector, etc. What are the successes in this regard?

- It's incredibly difficult to just put everyone together at the same table. Some openly ignore any calls to develop together, to help each other. But we don't stop trying. There are good examples of cooperation. A few years ago, foreign contractors abandoned all work at our plant in Karaganda and left, and this year the new manager brought in our local engineers from the KLMZ plant to help and we were able to do a lot ourselves. As a result, we received the first Kazakh cartridge of 5.45 x 39 caliber! This is very worthy! Further, now we are developing the production of raw materials. It's a shame, however, when Kazakh raw materials, located nearby, are many times more expensive than imported ones. For example, lead. From other examples: in Semey, small and medium-sized businesses are developing around our tank repair plant, a cluster of manufacturers of spare parts and components for equipment is being formed. Our factories began to communicate with each other. We will transfer this experience to the projects initiated by us to create industrial parks, based on a cluster approach, where small and medium-sized businesses gather around the anchor production, covering the need for raw materials and developing themselves. Together with a number of financial institutions, including private ones, we are actively engaged in a dialogue in order to create favorable conditions for the growth of such enterprises.

Also, there is a very close work with the Union of Mechanical Engineers: I was included in the Board of the Union, where we are moving projects in the mechanical engineering and manufacturing industry not in words, but in deeds. Without unnecessary demagogy, the executive body of the Union works, makes changes to the regulatory legal acts, solves specific business problems, and seeks funding for projects.

What about funding? Have you decided to create a Defense Industry Development Fund?

- As it turned out, no one finances defense production. There are no tools to finance, refinance, develop science, there is no financing for working capital. When a financial institution sees that the Company has a license to manufacture weapons, and besides, the Company is a quasi-public sector entity, all doors are immediately closed.

The big mistake of many "experts" is to believe that quasi-state companies have any advantages. On the contrary, there are some drawbacks - restrictions on types of activities, restrictions on funding, endless checks, a huge social burden, bureaucracy, and much more.

The defense industry development fund is needed, and very urgently. We need cheap long-term money both for turnover and for new projects. As in all industries, you need a base on which to develop your business. This base, in our case, is the created infrastructure, which, of course, cannot be implemented without the help of the state. And we also need funds for science - to create, to try, to make mistakes, and not to stop trying to create our own.

It would be possible to attract private money if there was a specific long-term, understandable, approved need or “off-take” contracts from customers.

- What about increasing localization and local content?

Now there is a new expression - "domestic value". With this, everything is bad everywhere, not only here. There are no metals, no spare parts, in a word - nothing. But, we take and do. The general installation for all our factories is to buy Kazakhstani. If not in Kazakhstan, we collect regional business, we say the needs and offer to master the production. In this regard, private factories have made good progress. They are not constrained in their actions by regulated procurement legislation. I would like everything to be 100% Kazakhstani, from toilet paper to bulletproof steel, but there are neither specialists nor the desire to invest for the sake of such a small market as ours. Unfortunately, there are also corrupt officials who do not want something of their own created in Kazakhstan, because it is personally beneficial for them to buy imported products through various intermediaries.

- Have you been able to attract investments?

Since March 2022, I have held 193 meetings with representatives of 25 countries of the world. He offered everyone to invest in projects, in factories. There are no quick wins in investment matters. We are in constant contact with Kazakh Invest. We also expect investors for some plants as part of privatization. Until 2025, we must sell Zavod 811, PZTM, Tynys, the Kirov Machine-Building Plant and the remaining stake in Munaimash. If you are interested, I can describe in detail for each plant, but I will say briefly - these assets are predominantly civilian, which will be much more efficiently developed in private hands on the open market. For example, 811 Zavod can master all topics on fire trucks and tanks, PZTM on equipment for the oil and gas industry, Tynys - fire extinguishers, pipes, fittings, railway spare parts, wheelchairs and many others,

Let me also remind you that in August 2022 we managed to keep strategic enterprises, in my opinion, for the defense industry, as part of the holding: aircraft repair, tank repair, cartridge factories.

What else would you like to share with readers? What are the plans?

Plans for the near future:

• provide customers with the right goods and services at minimal cost from the state budget (because there are many other important areas that require funding - roads, schools, hospitals, etc.), as well as increase the export of civilian and dual-use products (for example , aviation equipment);
• I note that until August of this year, a ban on exports has been established;
• nurture qualified personnel for the industry;

I also want to present in the form of a table what I promised to focus on and the results: