Funding facility with up to US$ 16 million will help company increase retail and production
In a boost to the local economy the EBRD is extending new financing to Gobi JSC, a leading cashmere garments maker in Mongolia. The funding facility, with a volume of up to US$ 16 million, will support the crucial sector and contribute to a more resilient and sustainable economy.
Cashmere is a key export commodity for Mongolia, second only to products from the mining industry. Developing a sustainable cashmere industry and value chains is one of the EBRD’s strategic priorities in Mongolia, where the Bank supports diversification from the mining sector.
Gobi JSC is the largest vertically integrated cashmere and camel wool processor and garments manufacturer in Mongolia. The EBRD financing will support the opening of a new flagship store in the Ulaanbaatar Galleria, a new shopping mall in the country’s capital. It will also finance a capacity increase and the modernisation of sewing equipment. Gobi JSC will increase purchases of raw cashmere from herders in remote areas to expand production of garments.
The company, a long-standing client of the Bank, will obtain a total of US$ 16 million in EBRD financing: a US$ 12 million six-year loan and a US$ 4 million working capital facility for up to three years. The working capital facility will provide Gobi JSC with more flexibility, allowing the company to access funds as necessary for seasonal purchases of raw material.
From goat to coat: Mongolian cashmere from Gobi JSC
A catwalk show in South Korea demonstrates the fashion credentials of the Mongolian garment manufacturer. The EBRD financed new equipment and arranged for expert advice (thank you donors from Japan!) .
Irina Kravchenko, EBRD Head of Mongolia, said: “We are proud to support Gobi JSC’s expansion. The company shows that Mongolia can produce not only raw cashmere for foreign garments manufacturers, but that it can itself make desirable, quality clothes. We are also working with other stakeholders in the cashmere industry to improve sustainability and quality standards.”
Baatarsaikhan Tsagaach, CEO of Gobi JSC, added: “Firstly, we would like to express our appreciation to the EBRD team for contributing to the development of the manufacturing sector in Mongolia, specifically the cashmere industry. We are pleased that Gobi JSC has been successfully cooperating with the EBRD since 2009. In this period we have become the largest cashmere producer in Mongolia and the face of Mongolian cashmere on the international arena. We believe that the long-standing relationship with the EBRD is one of the important factors that contributed to our success.”
Mongolia produces about 50 per cent of the global supply of raw cashmere, which is a reliable source of income for nomadic herders, bolstering a traditional lifestyle threatened by rapid urbanisation. The EBRD is planning a technical cooperation (TC) project, with additional contribution from Gobi JSC, aimed at developing a sustainable cashmere supply. With this TC the suppliers and cashmere goat herders in remote areas will get educated and trained on how to increase the quality and sustainability of the fibre.