“SAMRUK-ENERGY” JSC | Integrated ANNUAL REPORT

Procurement management

Procurement procedures at “Samruk-Energy” JSC group of companies are conducted in line with the Rules for Procurement of goods, works and services by “SWF “Samruk-Kazyna” JSC and organizations, fifty or more percent of voting stock (equity stake) of which are directly or indirectly belong to “Samruk-Kazyna” JSC on the right of ownership or trust management, approved by the Decision of the Board of Directors of “Samruk-Kazyna” JSC on January 28, 2016 (Minutes No. 126).

Procurements of goods, works, and services are based on principles:

  1. publicity and  transparency of  the  procurement process
  2. efficient spending of money used for procurements
  3. the purchase of high-quality goods, works, services
  4. increasing the share of local content in the goods, works, services purchased by the Holding company
  5. providing all potential suppliers with equal opportunities to participate in the procurement process, subject to the support of organizations of persons with disabilities (individuals with disabilities engaged in  entrepreneurial activities), organizations of  persons with disabilities (individuals with disabilities engaged in entrepreneurial activities) of the Holding company, domestic producers, domestic entrepreneurs
  6. fair competition among potential suppliers
  7. facilitating procurement between the  organizations that are part of the holding company in order to develop intercompany cooperation
  8. control over and responsibility for decisions made
  9. reducing the  participation of  intermediaries in the procurement process
  10. effective implementation of  investment strategic projects

The Сompany implemented “Category Procurement Management” project in line with the principles of procurement as part of “Samruk-Energy” JSC Business Transformation Program.  The Project provides for the optimization of procurement activities.

The “Category Procurement Management” project’s concept is to combine materials with similar technical and other properties, which were purchased into a category. Managing a category involves finding additional value, increasing the economic effect, estimating the total cost of ownership and reducing costs across the supply chain. Changes made enable to reduce purchase prices, improve the quality of goods, works and services purchased, develop local producers by selecting a potential supplier based on the total cost of ownership, which helps determine the optimal approach to the purchase of goods, works, services, based on maximizing the benefits in the long-term or short-term outlook. Moreover, the choice based on the total cost of ownership allows evaluating not only the value of purchase, but also the operating and disposal expenses, which allows selecting the most up-to-date and cost-effective solutions.

Procurement category strategies were developed in 2018 for “Protective Clothing”, “Maintenance and repair of special-purpose equipment”, “Personal protective clothing” and “Coal transportation” categories. These strategies include conclusions that were made in reliance on the analysis of past expenditures, future needs, supply market and business requirements.

As part of transformations of procurement activities, the Company pays attention to human resources as well. The work on improving the procurement system has commenced in 2018, which, among others things, involves certification of procurement specialists of the Fund and legal entities where the Fund holds directly or indirectly fifty or more percent of voting shares (equity stake) on the right of ownership or trust management. Executives, deputy heads in charge of procurements of “Samruk-Energy” JSC group successfully obtained certification in 2018.

In compliance with procurement principles, the Company continues focusing on developing the share of local content in the procurement of goods, works and services.

Information on the share of local content, mln. tenge *

 

actual 2016

actual 2017

actual 2018

The total amount of actually supplied GWS

% LC

The total amount of actually supplied GWS

% LC

The total amount of actually supplied GWS

% LC

goods

118,986.63

92

122,783.06

75

152,323.77

83

W/S

183,028.05

70

149,580.49

80

153,420.06

88

* Note: “Samruk-Kazyna Contract” LLP data

Moreover, the Company pays attention to social responsibility.

In 2018, the Company concluded agreements with disabled people organizations, including the Public Association “Association of disabled people Vostok”, “Mamai-Astana” LLP, “Hermes 21 Century” LLP, “Megapolis-ASTANA” IE, “Koktem-2016” LLP, “Delta inc” LLP “Ahmanova D.H.” IE,”BAYAZIT Life” LLP”, "Ar-Rohim association of disabled people” Public Association, “Taraz Educational and Production Enterprise” of Kazakh Society of the Deaf”, “GrandCorp” LLP, ABENOV IE, “Kolganat-Karaganda” LLP.

The Company concluded agreements for the amount of 114.8 mln. tenge with disabled people organizations in 2016.

The Company concluded agreements for the amount of 383.3 mln. tenge with disabled people organizations in 2017.

The Company concluded agreements for the amount of 369.3 mln. tenge with disabled people organizations in 2018.