On March 4, during the routine meeting of the EEC Council, the Kazakh delegation defended the extension of duty-free importation of raw materials for the manufacturing sector in Kazakhstan, and pushed for the inclusion of tariff benefits for goods required by the electrical engineering industries, QazMonitor reports citing the primeminister.kz.
The following goods will be duty-free for imports into Kazakhstan over the next two years:
Temporary duty-free status for titanium dioxide, replacing the standard 5% customs tariff;
Titanium scrap;
Four specific types of goods essential for booster production;
Sublimation inks.
In addition, the EEC Council decided to establish duty-free importation for bars of optical glass from March 1, 2024, to February 28, 2026.
Why it matters:
Titanium dioxide: In Kazakhstan, this material is essential for the operation of the Ust-Kamenogorsk Titanium and Magnesium Plant (USTMP), one of the world's largest titanium producers. The plant exports its products to aerospace manufacturers in the US, the UK, France, Germany, and other countries. Since titanium dioxide isn’t produced domestically, USTMP purchases it from foreign suppliers. In 2022, the plant doubled its usage of raw materials, and volumes are expected to continue growing as the current utilization of the plant stands at only 32% of its available capacity.
Titanium scrap: The duty-free importation of titanium scrap will enable USTMP to decrease the production costs of finished products and boost volume. In 2022, the plant increased its consumption of titanium scrap by 56% compared to 2018. The plan is to ramp up imports to 600 tons by 2025-2026.
Booster production: Presently, six local enterprises manufacture over 300 types of electrical products. Their combined capacity reaches up to 32,000 products per year, utilizing 64% of the available capacity. The duty-free importation of goods essential for booster production will enhance the competitiveness of domestic manufacturers and boost the output of high value-added product exports.
Sublimation inks: In Kazakhstan, imports of sublimation inks increased from 289.6 tons in 2020 to 394.4 tons in 2022. The output of products utilizing prints is projected to grow by 3% annually. Duty-free importation will enable local businesses to allocate the freed funds towards fixed capital and increase the average wage bill.