High-Nutrient Organic Milk and Dairy Products Processing

Lined up milk bottles

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High-Nutrient Organic Milk and Dairy Products Processing
High-Nutrient Organic Milk and Dairy Products Processing
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SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Food and Agriculture
Business Model Description

Invest in B2B/B2C milk processing plants focused on goat and camel milk and dairy products (i.e., formula milk, milk products for kids, powdered milk, cheese, butter, ice cream), sourced from nomadic herder families and cooperatives. Examples of companies active in this space are:

Suu JSC, established in 1958, is one of the first milk producers in Mongolia. It has been producing and delivering over 70 different types of dairy products. It represents 30 percent of the total market. Suu JSC has received USD 4.8 mn loan from EBRD and XacBank LLC for the expansion of its production capacity and renewal of its transport fleet.

APU Dairy has a production capacity of 150 tons of milk and dairy products per day and 45 mn litres of milk products per year. APU Dairy contributes 30 percent to the total milk and dairy processing market. The shareholding in the group company, APU JSC comprises Shunkhlai Holding LLC at 56 percent, Heineken Asia Pacific Pte Ltd at 25 percent, and Steppe Beverage KFT at 13.4 percent.

Milko LLC, established by Teso Corporation in 2009, operates to produce and trade milk and milk products, including high nutritious goat and camel milk products. Its powdered milk factory has an annual production capacity of 4000-7000 tons to cater to the domestic market. It also exports its products to China, Kazakhstan and Japan. Milko received USD 7.5 mn loan from ADB. (16)

Mongolian Artisan Cheesemakers Union LLC (MACU), formed in 2015, operates to develop, produce, sell and distribute fine cheeses made in Mongolia. It brings a new approach to the commercial utilization of Mongolia's nomadic pastoral milk resources, wherein 6 small cheesemakers have joined to produce over 15 products. It also built a small model cheese plant on the outskirts of the capital city.

Expected Impact

Increase production and export of milk and dairy products, thereby growing the workforce and improving nutrition levels in the country.

How is this information gathered?
Updated: 8 Jul, 2023 Date of Production: 9 Jul, 2023
Mongolia
Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in ROI)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 50 million - USD 100 million
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2) Decent Work and Economic Growth (SDG 8)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Gender Equality (SDG 5) Reduced Inequalities (SDG 10)

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Sector Sources
  • (1) United Nations Mongolia. (2022). United Nations Sustainable Development Cooperation Framework 2023-2027. https://mongolia.un.org/sites/default/files/2022-07/SF%20Eng%20last%20version7-14.pdf (2) Food and Agriculture Organization (FAO). (2022). Food Security and Nutrition Around the World in 2022. https://www.fao.org/3/ca9692en/online/ca9692en.html (3) United Nations Children's Fund (UNICEF). (2017). Nutrition Status of the Population of Mongolia - Fifth National Nutrition Survey Report. https://www.unicef.org/mongolia/media/1116/file/NNS_V_undsen_tailan_EN.pdf (4) The Government of Mongolia. (2020). Vision 2050 - Mongolia's Long Term Development Plan. https://legalinfo.mn/mn/detail/15406 (5) The Government of Mongolia. (2020). Five-Year Development Guidelines 2021-2025. https://legalinfo.mn/mn/detail/15584 (6) National Statistics Office of Mongolia (NSO). (2022). Mongolian Statistical Information Service. Employment. https://www.1212.mn/mn/statistic/statcate/573055/table-view/DT_NSO_0400_035V7 (7) Mongolian Marketing Consulting Group & Swiss Agency for Development and Cooperation. (2017). Herder households income, P-76. https://www.slideshare.net/GreengoldMongolia/socio-economic-baseline-study-of-h-hs-reportmgl-103926582 (8) National Statistics Office of Mongolia (NSO). (2022). Gross Domestic Production.https://www.1212.mn/mn/statistic/statcate/573052/table-view/DT_NSO_0500_001V1 (9) International Finance Corporation (IFC). (2018). Mongolia Investment Reform. https://www.ifc.org/wps/wcm/connect/8fbd4a65-c979-4cbc-858f-ca27677d30e7/Mongolia+Investment+Reform+Map+2018.pdf?MOD=AJPERES&CVID=mnSnUQT (10) Food and Agriculture Organization (FAO). (2016). Story on Mongolian milk for health and wealth. https://www.fao.org/mongolia/programmes-and-projects/success-stories/milk-for-health/en/ (11) The Parliament of Mongolia. (2022) National movement on ensuring food supply and security. https://lawforum.parliament.mn/project/185/ (12) Food and Agriculture Organization (FAO). (2019) Support to Income Creation in Mongolia (SECIM): Improving Local Dairy Processing Through Promoting Women. https://www.fao.org/3/ca8770en/ca8770en.pdf (13) Ministry of Food, Agriculture and Light Industry (MOFALI). Milk production. https://mofa.gov.mn/branch/huns/616fa74f73bc4a5fc70f2227 (14) Rapid capacity needs survey conducted by the Public Sector Consultant on Mongolia SDG Investor Map.
IOA Sources
  • (15) European Bank for Reconstruction and Development (EBRD). (2021). EBRD and XacBank support Mongolia’s dairy producer Suu Milk. https://www.ebrd.com/news/2021/ebrd-and-xacbank-support-mongolias-dairy-producer-suu-milk.html (16) Asian Development Bank. (2019). https://www.adb.org/sites/default/files/project-documents/53306/53306-001-rrp-en.pdf (17) Suu JSC. (2022). Financial and Operational Report 2022. https://www.mse.mn/issuers/activityreport/135_20220503002539report.pdf (18) National Stastics Office (NSO). (2022). Livestock statistics.https://www.1212.mn/tables.aspx?tbl_id=DT_NSO_1001_021V1&BAG_select_all=0&BAGSingleSelect=_0&TYPE_OF_LIVESTOCK_select_all=1&TYPE_OF_LIVESTOCKSingleSelect=&YearY_select_all=0&YearYSingleSelect=_2021&viewtype=table (19) National Development Agency of Mongolia. (2021). Invest in Mongolia. Agribusiness https://investmongolia.gov.mn/agribusiness/ (20) European Bank for Reconstruction and Development (EBRD). (2021). https://www.ebrd.com/news/2017/ebrd-highlights-opportunities-in-mongolias-dairy-sector.html (21) National Committee on Gender Equality. (2018). Gender policy in food, agriculture and light industry. (22) National Committee on Gender Equality. (2021). Gender assessment on male and female young herders livelihood. https://www.ncge.gov.mn/research (23) Mongolian Agency for Standardization and Metrology (MASM). MNS CAC RCP 57: Code of Hygienic Practice for Milk and Milk Products. https://estandard.gov.mn/standard?tech_id=25&per_page=2 (24) Mongolian Agency for Standardization and Metrology (MASM). Mongolian National Standard. MNS 6891:2020 for Responsible Nomads Code of Practices for sustainable nomadic livestock (25) National Statistics Office (NSO). (2021). Indicators for Food Security Statistics 2020 https://www2.1212.mn/BookLibraryDownload.ashx?url=Food_security_eng.pdf&ln=Mn (26) State Bank of Mongolia. Herder Loan. https://www.statebank.mn/product/766 (27) The Parliament of Mongolia. Law on Value-Added Tax (VAT). https://legalinfo.mn/mn/detail/11227 (28) The Parliament of Mongolia. Law on Investment. https://legalinfo.mn/mn/detail/9491