EBRD helps Mongolia’s Molor Zam increase turnover

By Lucia Sconosciuto

Workers at Molor Zam, Mongolian manufacturer of PVC windows and doors

EU funding helps Mongolia's Molor Zam, a PVC window and door manufacturer, improve its production process.

Good insulation is essential for windows in houses in Mongolia every day of the year. The country registers some of the lowest and highest temperatures on the planet, from +40 °C in the summer to -40 °C in the winter, as well as extreme temperature ranges between day and night.

Gerelmaa Enebish and her family seized this business opportunity when in 2003 they established Molor Zam, a company that produces PVC windows on the outskirts of the Mongolian capital Ulaanbaatar.

Ms Gerelmaa had previously worked in a window manufacturing company as production plant director when she decided she was knowledgeable enough to start her own business.

Back then, PVC windows and doors were a new product on the market so the company started only small-scale production.

Soon enough the benefits of better thermal insulation for lower prices and more durable frames than timber ones helped Ms Gerelmaa’s company build its reputation.

Molor Zam also took advantage of the rapid economic growth that ranked Mongolia as one of the world’s fastest growing economies up to 2012. The population in the capital was quickly increasing and the building sector was booming.

When the demand for high quality vacuum windows and doors started exceeding capacity and the company had to decline orders, Ms Gerelmaa decided to invest into expanding her production facilities.

However, managing the company after this development proved to be quite a challenge. “We had to shift from an intuitively-managed family business to a much larger operation and to regain efficiency in our processes we needed support,” recalled Ms Gerelmaa.

In the relatively small Mongolian SME sector, other firms face a similar lack of know-how.

For example, according to the latest Business Environment and Enterprise Performance Survey (BEEPS V) conducted by the EBRD and the World Bank, companies such as Molor Zam describe inadequate workforce skills as one of the key obstacles to doing business in the country.

“The EBRD’s Advice for Small Businesses (ASB), which in Mongolia is funded by the EU, helps to tackle these weaknesses by matching local SMEs with appropriate consultants who work with business owners and their employees to solve both management and operational problems,” said Baigalmaa Sanjjav, Principal Manager of the ASB team based in Mongolia..

“For example, we introduced Molor Zam to local consultants for process re-engineering to help streamline the production as well as to improve the overall management of the company.”

After analysing the manufacturing process, a local consultant helped increase efficiency by replacing old equipment, optimising the use of the factory space and creating a more rational production sequence, thereby cutting production time.

“Work was so demanding and the equipment so difficult to operate before that our employees wouldn’t stay longer than a year: too tough!” said Ms Gerelmaa.

“Now we retain all our workers. They participate in the work with commitment and contribute ideas to improve.”

The company was also able to develop its first business plan which provided a solid strategy for future growth.

Thanks to the project, they introduced a machine to cut window fittings based on German technology which brought a new, higher quality product.

Mass orders from construction companies are now easy to manage and deliver. With daily production increased from 20 windows a day to 64 higher quality ones, efficiency is paying off.

“Our turnover dramatically increased. We recently completed an order for the prestigious building complex Hunnu micro district,” explained Ms Gerelmaa.

“Next on Molor Zam’s business plan is innovating its branding and marketing strategy to keep ahead of competition.”