IFC Invests $2 million in Mongolia’s Leading Dairy Processor to Support Rural Economy
IFC, a member of the World Bank Group, said today it invested $2 million in Suu JSC, Mongolia’s leading dairy processor, helping expand economic opportunities in Mongolia’s rural areas, while diversifying the country’s natural resource-led economy and improving food safety.IFC’s investment consists of an eight-year, $2 million loan to help Suu increase production capacity and tighten quality controls. Suu will improve food safety by installing new equipment to test milk quality, and by implementing an environmental and safety management system that will set the standard for Mongolia’s dairy industry.
“IFC provides not only long-term financing, but also a stamp of approval for our socially responsible operations,” said D. Ganbaatar, Chairman of Suu JSC. “We are committed to working with IFC to improve our food safety standards, quality control as well as our corporate governance practices.”
IFC’s investment will help Suu extend its network of raw milk herder-suppliers to about 4,000 from the current 2,500 herders, thus contributing to their economic sustainability. The company buys raw milk through 19 milk collection stations in rural Mongolia and sells products through more than 100 distributors.
France’s Société de Promotion et de Participation pour la Coopération Economique (Proparco) and the Belgium Investment Company for Developing Countries (BIO) are also providing $2 million each.
“Supporting Mongolia’s small and medium enterprises to generate employment and diversify its natural resources-led economy is a top priority for IFC as we expand our programs in the country, both in investment and advisory services,” said Hyun-Chan Cho, IFC’s Country Manager for China and Mongolia. “IFC’s partnership with Suu is important as we helped mobilize the financing from our long-term partners, BIO and Proparco. We look forward to working with Suu and our two partners to support herders in Mongolia’s rural areas and improve food safety.”
Revitalizing Mongolia’s traditionally important dairy industry, which collapsed during the country’s transition to a market economy in 1990, will largely depend on the success of dairy processors such as Suu and their capacity to increase production of quality milk through a well-functioning supply chain at prices that compete with imports.
Nomadic herding and traditional dairy pasturing are an important part of Mongolia’s economy. Livestock contributes more than 20 percent to the country’s gross domestic product and represents 40 percent of all employment in the country.