Mongolia’s economy is growing at a fast pace, and the country is now faced with new challenges: to diversify its economy and improve living standards. The European Bank for Reconstruction and Development (EBRD) continues to support businesses outside the dominant mining sector of the country, particularly the manufacturing and retail sectors which account for a third of the Bank’s deals in Mongolia.
The EBRD is extending a loan to a leading local manufacturer and retailer of home furniture and distributor of kitchen appliances in Mongolia, under the brand name Kitchenall.
The growing Mongolian middle class is eager to invest in comfortable homes; residential construction is on the rise, and the sales of Kitchenall kitchen cabinets grew by one fifth in 2012. The EBRD loan will finance a major expansion of the company’s manufacturing capacity, including a new and modern production facility, warehouse and office space.
New automated equipment will also allow the company to make a wider range of furniture. The company’s plan is to expand into the production of children’s furniture, bedroom sets and office furniture that will be more standardised – and therefore more affordable
“Mongolia is a very important country for us. We are already working with a large number of medium-sized companies in the manufacturing and services sector, and by supporting Kitchenall we are continuing to demonstrate our commitment to support viable local companies with long term financing,” said Frederic Lucenet, Director of the Manufacturing and Services team of EBRD.
“Apart from the loan, the EBRD is offering us expert support”, says Ganbat Samdan , the CEO of Kitchenall. “The EBRD’s Enterprise Growth Programme helped us to engage experienced international industry consultants; we have learned best practice from German, Italian and Greek furniture makers and will continue working together on the construction of our new factory”.
Since the beginning of its operations in Mongolia in 2006, the EBRD has committed over €700 million to various sectors of its economy, all of it in the private sector. The EBRD’s Enterprise Growth Programme in Mongolia is supported by the government of Japan and by other donors.