Alageum Electric on its way to become monopolist in Kazakhstan

According to a draft edict by the country’s government, Alageum Electric will be taken off the national regime associated with government procurement. This means that the company is going to have no foreign competitors in the market.

The national regime allows goods and services of foreign origin to take part in government procurement along with domestic goods and products. No one foreign company will be able to participate in government procurement in Kazakhstan if it’s outside of the national regime.

The Ministry of Industry and Construction that initiated the draft law believes that Alageum Electric can fulfill the demand for electricity transformers if it boosts its production capacity by 58%. In 2023, the demand for transformers was estimated at $107.9 million. About $30.9 million was spent to buy transformers from foreign producers.

«As of the year-end of 2023, only 47% of the Alageum Electric capacity was used. Every year, the company produces about 20,000 electricity transformers for $136.7 million. The domestic market accounted for $79.5 million out of that sum,» the draft document says.

The ministry also noted that Alageum Electriс possesses enough manufacturing and technological capacities and labor resources to produce high-quality products (transformers) in large amounts.

The draft edict is going to be available for public consideration until January 22, 2024.

Before the Russian invasion of Ukraine, Alageum Electric used to export its 110-kilowatt transformers to Ukraine. In 2022, the company did not export any of them to Ukraine due to a twofold increase in delivery costs bypassing Russia.