Kazakhstan’s prosecutor general orders national companies to buy Qarmet pipes

Kazakhstan’s Prosecutor General’s Office has ordered national companies to prioritize domestically produced pipes after discovering that state-owned firms continued to purchase imported alternatives despite the existence of a local manufacturing plant.

The directive led quasi-public sector companies to increase purchases from Qarmet Tubular Products Aktau, a subsidiary of Qarmet, owned by entrepreneur Andrey Lavrentyev. This shift significantly boosted the plant’s utilization rate.

«The Prosecutor General’s Office has taken steps to revive underutilized enterprises, boost domestic production and reduce reliance on imports. For example, measures were implemented to restart operations at the Qarmet Tubular Products Aktau pipe plant, which was operating at just 19% capacity. Despite the availability of domestic manufacturers, quasi-public companies were purchasing foreign-made pipes at inflated prices through inefficient intermediaries,» the agency stated.

Following a prosecutorial oversight order, the government and national companies collaborated to integrate the Aktau plant’s products into Kazakhstan’s infrastructure projects. This effort resulted in new contracts worth nearly $16 million and a 14% increase in the plant’s workforce.

«The plant has now reached full capacity, and its profits have increased 2.5 times. We are now addressing similar challenges at other underutilized and idle enterprises,» the Prosecutor General’s Office added.

The supervisory body emphasized its commitment to protecting businesses and investors facing procurement restrictions, raw material shortages, market access difficulties and other barriers. This initiative also aligns with the government’s import substitution strategy, which aims to integrate unused resources into economic circulation and create favorable conditions for domestic production growth.

The Prosecutor General’s Office underscored that the sustainable operation of industrial facilities is crucial for economic progress, job creation, stable tax revenues and GDP growth, all of which contribute to improving living standards in Kazakhstan’s regions.

Zaure Zaurbekova, Deputy CEO of Qarmet, announced in 2024 that the company is planning a large-scale investment program totaling $3.5 billion through 2028, with funding expected from Chinese, international and second-tier Kazakhstani banks. Additionally, Qarmet will receive 550 million cubic meters of natural gas annually from QazaqGaz, the national gas company, via the Saryarka gas pipeline. However, the Karaganda Metallurgical Plant alone, one of the company’s key facilities, requires 2.3 billion cubic meters per year, Qarmet CEO Vadim Bassin noted at the time.