EBRD and EU support fruit juice producer in Mongolia

By Volker Ahlemeyer


US$ 16.9 million loans enable Mongolian business to compete with international brand

Mongolia has some of the harshest winters on earth. Its wildlife has adapted well to temperatures that can plummet below -40C – with cashmere goats, sheep and yak growing their well-renown dense layers of fur.

But for humans, this is a different story: it’s a climate where an extra vitamin boost can be vital to get through the long cold season.

This is Vitafit’s business: the family-owned company produces various fruit juices and dairy products – with success. It has expanded its product range significantly over the last ten years and is the only Mongolian producer able to compete with the global brands dominating the sector.

The EBRD has been a long-time partner supporting Vitafit’s growth. Several loans totalling US$ 16.9 million helped the company to modernise its equipment and build a new warehouse.

This meant that Vitafit could increase its capacity and at the same time offer new, high-quality products to Mongolian consumers.

Going global

“The EBRD’s support came at critical stages in our development when our business was ready to expand further,” said Bolorsaikhan Sodnom, Vitafit’s CEO. “The investments helped us not only to remain locally competitive, but they also allowed us to explore new opportunities for our goods on foreign markets.”

Vitafit’s Goy brand, for example, has developed a loyal following, not only in Mongolia, but increasingly across Asia. The seabuckthorn, blackcurrant and cranberry juice are now exported across Japan, South Korea and China.

“We also introduced some new dairy drinks and desserts in Mongolia to offer a more diverse range of products to our local customers,” he added.

This includes a new flavourful milk drink, various fruit yogurts and Pororo sirok, an icy curd with different fillings. The latter dessert has become particularly successful and a favourite among both youngsters and adults.

Strong local links

In the dairy sector, the company also sets new standards in Mongolia when it comes to obtaining raw milk and improving links between producers and suppliers.

Its representatives travel with specialised trucks to collect raw milk from herders, ensuring that the product travels in a sterile environment. They then deliver it to rural collection points for sterilisation.

This helps farmers to be less dependent on traders. It increases the milk quality, as it cuts down on inadequate transportation and reduces collection time for a perishable product, while ensuring at the same time better prices for the farmers.

The EBRD also matched the company with an expert consultant to help it establish a concrete vision for its business, good organisational structure, proper corporate governance and improved human resources and reward system.

“Our investment in Vitafit is a good‎ example of the EBRD’s continued efforts to support diversification of the Mongolian economy, which is one of the main Bank’s strategic objectives in the country,” explained Irina Kravchenko, Head of the EBRD’s Ulaanbaatar office.

“We support a full range of companies and projects to achieve this goal across the country – from wind farms to cashmere producers, electronics and engineering businesses to ice-cream makers.”

In total, the EBRD provides €52.7 million in investments to help develop small and medium-sized enterprises in Mongolia and the EU supports this project with €9.3 million in funding.

The two partners aim to provide these businesses with access to finance and know-how, while building a business environment conducive to investments in this vital market segment.

“This is an example of how the European Union and the EBRD carry out joint activities to support job creation and economic diversification in Mongolia. It is also an example of how we support SMEs in strengthening their corporate governance and Human Resources management. This benefits the company and its employees,” said Marco Ferri, Chargé d’Affaires of the European Union Delegation to Mongolia.