The EBRD is providing a new loan of US$ 5 million to wool and garment company Gobi JSC for partial financing of an equipment modernisation programme that will improve the quality of the group’s products and increase its production capacity.
The proceeds of the EBRD financing will be used to purchase new equipment in such areas as spinning, knitting, linking, weaving and finishing.
Established in 1981, Gobi is a fully integrated processor with capabilities ranging from primary processing to manufacturing of cashmere and camel wool knitwear and woven products. Gobi is majority owned by the Tavan Bogd Group of Mongolia and by HS Securities of Japan and is listed on the Mongolian Stock Exchange.
During the past two years Gobi has been restructured under new ownership and management following its privatisation. Gobi’s Board of Directors and executive management team comprise experienced Mongolian and Japanese entrepreneurs and managers with a proven track-record and knowledge in the sectors where the group is active.
This latest loan is a follow-up financing to a loan provided by the EBRD to Gobi in 2009.
“We are happy that the EBRD has confirmed its commitment to support our company and the Mongolian cashmere sector by providing a follow-up loan to us and we are confident that this collaboration will help Gobi become an even more successful company”, stated Mr. Baatarsaikhan Tsagaach, Chief Executive Officer of Gobi JSC.
“The EBRD is pleased to support Gobi JSC, the largest integrated cashmere and camel wool processor in Mongolia, in their on-going expansion. This new investment confirms and strengthens EBRD’s commitment to Mongolia’s private SME sector. We anticipate that with the help of EBRD’s financing, the company will be able to increase its knitting and linking capacity and also improve its product quality and productivity.” said Philip ter Woort, Head of the EBRD’s Resident Office in Mongolia.
The project will enhance Gobi’s competitiveness on both local and international markets. Cashmere processing is the second largest currency earner for the country after mining and is an important traditional sector where Mongolia can genuinely compete at international level and achieve diversification away from the resource economy.
Since the beginning of its operations in Mongolia in 2006, the EBRD has committed through debt and equity investments more than US$ 465 million to the Mongolian private sector through 41 projects in sectors ranging from banking to manufacturing and from mining to agribusiness.