Mongolian Cashmere Industry Overview

Mongolian Cashmere Industry Overview

Mongolian Government Policy on Cashmere

Major challenges and investment opportunities REQUIRED FUNDING 1. Raw material funding for local manufacturers About 85% or 6000tn of raw cashmere exported to other countries unprocessed. ≈ U$300 million 2. Capacity increase ≈ U$145 million 3. Factory building 7000 m2 of more factory space required for production and machinery installation ≈ U$35 million 4. Workforce and foreign market Domestic market - U$ 212 million, U$1.6 billion foreign market required after capacity increase Current industry workforce - 6000. 7000 skilled and trained workforce required after increasing processing capacity

Government support programs for the Mongolian cashmere industry Year Government programs Amount Implementation % Purpose 2011 Gov.resolution №30 ₮ 100 billion 100% working capital financing 2013 Gov.resolution №126 U$ 68 million 55% technical and technological modernization 2014 Gov.resolution №87 ₮ 250 billion 9% cashmere production and export Gov.resolution №165 ₮ 40 billion = cashmere production Cashmere project financing model Commercial Bank Mongolian cashmere companies Mongolian Government Secured loan Government funding - collateral (real estate, land) - credit history, image - additional cost (bank margin)

Cashmere industry investment opportunities № Amount Required financing 1 U$145 million Cashmere processing machinery and equipment 2 U$ 300 million Working capital financing 3 U$ 35 million Factory building and infrastructure Mongolian government jointly with Mongolian cashmere industry invite your cooperation through FDI, mezzanine financing, Concession agreements, JV, purchase order financing etc.,