QazCem head: Uzbek government’s secret decision hits Kazakh cement

A ’’secret decision’’ adopted by the Uzbek government has dealt a serious blow to Kazakh cement producers. This was stated by Erbol Akimbaev, head of QazCem, the Association of Cement and Concrete Producers of Kazakhstan, in an interview with Forbes Kazakhstan.

’’Traditionally, the largest importing country has been the Russian Federation. Previously, Iran ranked second. Now it is Uzbekistan. I have nothing against Uzbekistan, but the issue here is about ensuring fair play,’’ Akimbaev said in response to a question about cement imports.

He also noted that Kazakhstan had long been the largest supplier of cement to Uzbekistan, but the situation has now changed.

’’We are calling for a review of the customs regulations. Let me remind you that since 2018, Kazakhstan has been the largest exporter of cement to Uzbekistan. However, Uzbekistan has built several cement plants of its own, even exceeding capacity limits. Now they have a surplus of production, and therefore, they are trying in every possible way to protect their domestic market,’’ Akimbaev explained.

He also mentioned that the Uzbek government had recently introduced a resolution concerning the declaration of Kazakh cement.

’’In July of this year, the Cabinet of Ministers of Uzbekistan adopted a resolution that directly affects cement supplies from Kazakhstan. The document states that the price of cement imported from Kazakhstan cannot be declared below $300 per ton, while in fact, we export it for only $30. Do you understand? This means they made it mandatory to declare Kazakh cement at $300 and pay taxes based on that amount. But in reality, we sell the product for $30, so the taxes should logically be lower,’’ Akimbaev explained.

Responding to a journalist’s question regarding the legality of this decision, Akimbaev described it as ’’a very sensitive issue.’’

’’This is a very delicate matter. We cannot assess whether another country’s legal documents are lawful or unlawful. If the resolution has been enacted, customs officers are obliged to enforce it. But then, what happens to all the statements about boosting mutual trade? Look, after this decision was introduced, for the first time in seven years, our exports to Uzbekistan dropped to zero. In August, we didn’t send a single ton of cement to Uzbekistan! Because at the artificially fixed price, no one is buying our product. If Uzbekistan continues this approach, Kazakhstan, in turn, has every right to take reciprocal measures,’’ he said.

According to the official, it is impossible to find the Uzbek government’s resolution in open sources.

’’There is only a photo taken from the phone screen of an Uzbek customs officer. It’s like a ‘state secret under seven seals.’ Why? Because if they make this decision public, it will immediately cause a major stir,’’ he said.

Erbol Akimbaev stated that, following the Uzbek government’s decision, Kazakhstan has found itself in a ’’dead end.’’

’’To be honest, we are now in a deadlock. We are discussing the issue with the Ministry of Industry, the Ministry of Trade, and Kazakhstan’s Industry and Export Center QazIndustry, but so far, the results are minimal. Therefore, if Kazakhstan were to introduce retaliatory measures against the neighboring country’s actions right now, it would help reduce the aggressive flow of imports coming from Uzbekistan and at least allow us to maintain our current production levels,’’ he said.

According to the presidential resolution ’’On measures to further regulate the foreign economic activity of the Republic of Uzbekistan and improve the customs-tariff regulation system,’’ a 30 percent customs duty has been imposed on cement imports to Uzbekistan.