BAKU, Azerbaijan, May 16
By Nargiz Sadikhova - Trend:
Kazakhstan’s Azia Auto car-assembling plant is hoping to resume negotiations on agreement with Kazakhstan’s Ministry of Industry and Infrastructural Development after quarantine is lifted in the country, CEO of the Azia Auto Yerzhan Mandiyev said, Trend reports with reference to the company.
The agreement in question envisaged carrying technological operations on welding, painting and assembling vehicles and increasing localization.
On May 13, 2020, CEO of the Azia Auto Yerzhan Mandiyev said that operations of Kazakhstan’s Azia Auto car-assembling plant may be suspended as a result of termination of the current industrial assembly agreement with Kazakhstan’s Ministry of Industry and infrastructural Development by the latter.
However, the ministry later said that the agreement was terminated due to the plant not carrying out taken liabilities within the agreement.
In Mandiyev’s words, Azia Auto Kazakhstan and its Azia Auto plant had to increase the localization level to 50 percent by the end of 2019, as well as to establish body paint and assembly workshops.
“Establishment of these workshops depends on how quickly the market recovers after a coronavirus-related crisis. According to our optimistic forecasts, recovery will occur within 1.5-2 years. We hope that we will implement the project and fulfill the obligations within the agreement within next 1.5 years,” Mandiyev said.
He added that after quarantine is lifted, the company is planning to resume negotiations with the ministry and expressed hope that the parties will be able to come to certain agreements.
He also explained why the company was not able to carry out liabilities in 2019.
“In 2015, the devaluation of the tenge and the subsequent drop in the car market by four times prevented the production of workshops and increased the level of localization. After this, the restoration was slow, and in 2018, when the manufacturers were ready to finance the creation of the workshops, the bank with which our company used to work was closed. At the moment, the company is in the process of solving the issue with funding,” he said.
Mandiev added that funding for setting up the assembly workshop amounts to $74 million of company’s funds as of now.
“Moreover, 45-50 percent of the construction work has already been completed. Allocation of another $90 million of company’s funds and investments is planned before the end of project’s implementation,” he said.
Azia Auto JSC was set up and passed its first state registration on December 20, 2002. Its parent enterprise is the car-assembly plant in the capital of the East Kazakhstan region’s Ust-Kamenogorsk.
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