Chinggis Bond to finance leather factory upgrades



A Government meeting has recently concluded to review the financing of a leather factory complex to be established in Darkhan-Uul Province, as well as projects to upgrade the technologies and infrastructure of existing leather factories.

Ministers from related sectors were also instructed to use buyers’ investments to reform technologies or develop the infrastructure needed to support domestic manufacturers, along with soft loans and industry organization assistance.

The Minister of Industry and Agriculture of Mongolia, Kh.Battulga, reported that Mongolia has the potential to earn an income of one trillion MNT from leather industry sales.

He said, “Our country is capable of introducing technology from Italy, Spain and Turkey, the countries that are leading in the technology sector, by 2016 and producing leather products domestically.”

According to calculations, 80 percent of raw material of leather will be produced as end product and the remaining 20 percent will be exported as semi-processed leather. Nearly 24,700 jobs could be created by these investments in the leather goods industry. Nationwide, there are 35 leather processing factories and over 170 leather product manufacturing factories.

Out of all leathers prepared in Mongolia, only 25.8 percent (10.3 million) of raw leathers is processed domestically. The remaining percentage of raw leather is exported to China, which many analysts consider a great loss for Mongolia.

For now, domestic manufacturers will continue to face the challenges of insufficient profits, and limited distribution networks, which leaves them no other option but to halt operations for five to six months as they struggle to store raw material.

Short URL: http://ubpost.mongolnews.mn/?p=4788

Posted by on Jul 14 2013. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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