President presented with pressing issues of cashmere industry

On February 25, President of Mongolia got au fait with manufacturing process of “Evseg” clothing line by Cashmere Holding LLC, and was presented with opinions that might be helpful to wool and cashmere industry development, if realized.

Cashmere Holding LLC was established in 1981 basing on remains of a socialist-time factory. The company employed more than a thousand people for its 30 years of operation, established contracts with over 40 small manufacturers and private business. Each year, knitwear, textile fabrics, ready-made garments and stitched materials worth about MNT 30 billion are produced in the factory. The company sells its products to Russia, Italy, Switzerland, Germany, UK, Japan and Kazakhstan, and pays not less than MNT 2.5 billion of taxes on annual basis.

Nevertheless, the clothing line faces the problems, one of which is the issue of VAT, that are common among cashmere companies, comment the workers.

Leaders of the factory also offered some recommendations that might become an impetus to promoting cashmere industry. The recommendations covered some important issues such as promoting Mongolian cashmere products on global markets, investing in the marketing, establishing an investment bank, facilitating tax exemption for some equipment and involving cashmere workers who have regular income in apartment loans.

The cashmere factory leaders suggested that granting privilege in accessing loans for supply of equipment to those companies, annual sales revenues of which exceeded USD 1.0 million for three years in a row, can be a great incentive for the industry.

After legging the fatory and hearing the opinions, the head of state said “I am familiar with the challenges in cashmere production. The cashmere industry has overcome the difficult times without any external support or investment. That is the reason why I decided to come here today. As the President of Mongolia, I have been exchanging views with the Bank of Mongolia and the Cabinet about promoting growth of “renewable” industry such as cashmere production which comes from livestock, rather than promoting only mining exploitations. During the time I was the Minister for Agriculture, Mongolia supplied 6,000 tons of cashmere. The number went up to 10 thousand. It means Mongolians and Mongolian herders have been producing 60 percent of the total world consumption of cashmere. Increasing such a major industry’s sales revenue and number of workers are a necessity. With proper policy support, the Mongolian cashmere industry is estimated to make USD 800 million of revenue per annum. If we could achieve USD 1.0 billion of annual revenue from cashmere industry, we might not even need mining. Cashmere is a resource that can equal, or exceed in some terms, gold and copper. The prior solution must be a registration of supply of raw materials. Your opinions are valuable in promoting the industry.”