Price setting network of 'white gold' broadens
Within the framework of the “Promoting Sheep Wool Value Chains Project”, a partnership project between the Mongolian National Chamber of Commerce and Industry (MNCCI) and the Association of German Chambers of Commerce and Industry (DIHK), organizational team led by M.Oyunchimeg CEO of MNCCI, and Project Manager Rolf Speit, paid a working visit to Arkhangai Aimag.
The “Promoting Sheep Wool Value Chains Project” aims to provide support for herders and national manufacturers on processing raw wool into final products. Within the framework of the project, complex works on increasing Mongolia’s sheep wool value, such as training the staff, providing required technologies, workplace and taking care of sales are being implemented.
During their visit, the delegates observed the construction of a scouring facility in Khotont Soum, the upcoming project for a wastewater treatment plant and its current issues. Furthermore, the delegates met with MNCCI’s branch in Arkhangai Aimag and exchanged views with the training attendees and the sub-cluster team.
The main purpose of the visit was to open a sheep shearing and scouring facility in Erdenebulgan Soum, Arkhangai Aimag, officially hand over its ownership to the citizens, and give guidance for operating the facility.
Waterwaste facility isn’t a need for one company
The first stop was “Nekheesgui edlel” JSC’s scoundering facility in Khotont Soum, Arkhangai Aimag. The facility was moved 4 years ago from the capital in order to build an Agricultural Park in the steppe. However, due to unresolved issues concerning the wastewater treatment plant, the facility was unable to start operations.
B.Ganbat, CEO of the Company and Head of Mongolian Wool and Cashmere Association said “As the head of Mongolian Wool and Cashmere Association, I moved my shearing facility to Khotont Soum to be an example for other manufacturers engaged in similar activities, lessen the burdens of the wastewater facility that is providing the needs of one-third of Ulaanbaatar city's population, increase workplaces in rural areas, and get closer to the raw materials. Furthermore, we appealed to other manufacturers to cooperate in establishing an Agricultural Park. However, we’re facing some financial difficulties in building the wastewater facility. We issued MNT 1.7 billion from the Government bond to move the facility. The action plan of the Government at the time included the construction of the wastewater facility based on agriculture, and the related ministry budgeted the funds. However, the manufacturers that agreed to cooperate haven’t been able to move to the region. This is the reason why the issues concerning the wastewater facility is on hold. We’re facing financial difficulties to build the facility from the company’s fund alone. But in order to operate the facility, we’re seeking investments from China. It is estimated that around MNT 1 billion will be required. Although it isn’t much of a big number, it overburdens a single entity. If the wastewater facility is constructed in Khotont Soum, schools and kindergartens in the area will be connected to a centralized network. Having outdoor toilets in this age isn’t suitable; therefore, we hope local authorities will support our need”.
The Government granted Agricultural Park building permits in Darkhan, Erdenet and Baganuur cities in the last 8 years. These areas are not very suitable for processing wool and cashmere as they are industrial cities.
In order to build an Agricultural Park, three key indicators -- infrastructure, population density and source of raw materials, have to be satisfactory. Although Khotont Soum is 90 kilometers from the capital, it is located by the Ulaanbaatar-Arkhangai auto road route, so infrastructure is resolved. The area has over 1300 households and over 800 of them are herder households with over 260 thousand livestock. If the scoundering facility starts its operations, it will be capable of scoundering at the Aimag level and will not have a shortage of raw materials as Arkhangai Aimag has one-third of Mongolia’s total sheep population. Therefore, it is important for the Government to consider building Agricultural Parks in agriculture-based regions.
Producing eye-catching products with cheap wool
The “Sheep Wool Value chains of Arkhangai Aimag” project started being implemented in Arkhangai in 2015 and held several trainings on wool processing and felt producing for the public. The task team visited MNCCI’s branch in Arkhangai Aimag and met with the sub-cluster team and selection of people who attended the training.
Ch.Munkhbat, Head of the Arkhangai Branch of MNCCI, presented the outcome of the training and the winning woolen products of the competition were made by local people. The number of people who want to attend training on crafting felt products has increased in recent years. Felt products used to be sold only in the traveling season, but the public preference of eco products has grown popular through the trainings. He also reported that the price of wool was MNT 300 per kilogram but has increased to MNT 1000 on the market, showing a profit of MNT 2000 to herders with bonus incentives.
According to the sub-cluster team, the main problem for felt product crafting people is the lack of wool processing machines. Because the available ones use high voltage and ordering one that suits the herders’ condition costs a fortune.
M.Oyunchimeg, CEO of MNCCI, advised the public during the meeting to focus on diversifying the products, creativity and cooperating with others and addressed the importance of attending exhibitions in the region and capital to study the opportunities of reducing the voltage of wool the processing machine and promote products, as well as informing MNCCI’s intention of supporting the public in these matters.
Exemplary shearing and scoundering facility opened
Aside from the series of trainings held within the framework of “Sheep Wool Value chains of Arkhangai Aimag” project to build capacity and instruct the public on how to use sheep shearing devices, the establishment of shearing and scoundering facility in 6th bag of Erdenebulgan Soum, Arkhangai Aimag was an outstanding part of the result. At the opening ceremony, ownership of the facility was officially handed over to local residents. The locals gratefully received the facility and named it the “Bag Center”. The opening ceremony was attended by M.Oyunchimeg, the CEO of MNCCI, Ch.Munkhbat, Head of the Arkhangai Branch of MNCCI and Rolf Speit, project manager, as well as the project team.
In her speech during the opening ceremony of “Bag Center”, CEO of MNCCI Ms. M.Oyunchimeg said, “I am very happy that Sheep Wool Value Chains of Arkhangai Aimag project has shown results and is now opening this facility. Mongolia is a country of agriculture. Processing the raw materials of livestock without waste, selling them on the global market, manufacturing internationally-approved products and diversifying them, are our main goals. I thank DIHK and German people for their support for fulfilling these goals and helping local residents to improve livestock health themselves as well as shearing, storing and processing wools with the right technologies. I wish success to the citizens of Erdenebulgan Soum.
Rolf Speit, Project Manager of Promoting Sheep Wool Value Chains Project, shared his impression “There was nothing else than collapsing ruins on this spot. Now, a complex facility capable of storing, shearing and scouring wool is about to start operations. We are happy that our work is standing in front of us. I am inspired enough to further continue the project and build exemplary facilities in other regions”.
This is considered the first and only complex facility capable of storing, shearing and scouring. The facility enables herders to directly profit from the wool, and improve the health of livestock.
Arkhangai Aimag has a total of 4.6 million livestock and 2.3 million of them are sheep. Following this practice, shearing and scouring facilities could be built in 18 soums.