Industry & Retail
From The Report: Mongolia 2013
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Although it may never compete with neighbours with well-established manufacturing sectors and economies of scale, Mongolia has the potential to meet domestic needs and produce goods, such as meat and cashmere for export. The move into mass production faces a host of constraints: Mongolia has a small domestic market, poor infrastructure, a growing minerals sector competing for labour and capital, and its neighbours, China and Korea, are world leaders in low-cost mass production. At the same time, Mongolia is an open economy, with low tariffs and limited non-tariff barriers, and as such, goods can easily enter from abroad. Nevertheless, Mongolia has the potential to develop a strong and healthy industrial sector: domestic demand is climbing, quality is improving and interest rates have, over the long term, been falling. If the programme to improve cashmere manufacturing and the investments to raise the quality of meat production pan out, exports of manufactured goods could become a meaningful economic contributor.

This chapter contains an interview with B. Chuluunbatar, President and CEO, Monnis Group.

Articles from this Chapter

Overview

Adding value: Efforts to re-establish manufacturing through domestic processing
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The structural conditions for Mongolian manufacturing remain challenging for 2013, despite potential in a few niche segments such as food processing for local markets and cashmere products for exports. The move into mass production, however, faces the same perennial constraints: Mongolia has a small domestic market, poor infrastructure, a growing minerals sector competing for labour and capital, and its neighbours, China and Korea, are world leaders in low-cost mass production. At the same…

Interview

OBG talks to B. Chuluunbatar, President & CEO, Monnis Group
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Interview: B. Chuluunbatar Which ongoing specific legislative reforms will help improve the investment climate in Mongolia for both the domestic and foreign private sectors? B. CHULUUNBATAR: Because of increasing foreign investment, there has been a growing demand for an updated legal framework that better reflects the current economic situation. For example, the corporate tax law, which was drafted five to six years ago, is not very relevant since everything – starting with the size of the businesses…

Analysis

A complex solution: Hopes are being pinned on Sainshand to diversify the economy
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Progress at the Sainshand Industrial Complex should see Mongolia get more from its national assets. Most of the country’s resources are currently exported unprocessed, and the vast majority of the profits go elsewhere. At Sainshand, value will be added to raw materials so that Mongolia can realise gains currently being earned in other countries. "We are exporting raw materials," said B. Tsogtgerel, deputy minister at the Ministry of Industry and Agriculture. "We want to stop that." AMBITIOUS:…

Analysis

Branding cashmere: Initiatives well under way to catch up with regional and global players
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As Mongolia works to shore up its industries – investing in production facilities lacking in capital and working to improve sourcing methods – it is also paying attention to the far end of the value chain: marketing. Under the Sovietmodel, products did not have to be sold, as the state ordered almost everything. After the collapse, it was an aspect of business largely ignored. The country has plenty of commodities, so there has been little incentive to invest in anything beyond basic sales.…

Overview

Mass market: Consumers revel in the influx of high-end retail, but room for growth remains
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Sales staff at the Montblanc shop in Central Tower say that business is brisk in $600 pens. While this is an interesting isolated trend, what is happening everywhere outside the luxury shops on Sukhbaatar Square is the real story for Mongolia. For in the space of a few short years, habits have changed and the country suddenly has a consumer culture. After six decades under socialism and two decades trying to get over the crash that followed, Mongolians are finally shopping. They are not buying…