ADB provides US$7.5 million loan to leading private dairy company in Mangolia

This is ADB’s first private sector loan in Mongolia denominated in local currency.

In a first, the Asian Development Bank (ADB) is going to provide $7.5 million to a private dairy company in Mangolia for its expansion in local currency. The company – Milko LLC (Milko), a member of the leading dairy company Teso group (Teso), has planned to use the investment for its expansion in rural areas of the country. 

“Investing in agricultural value chains can yield solid economic and development impacts,” said ADB Country Director for Mongolia Mr. Pavit Ramachandran. “This project is good news for rural households, as one-third of Mongolia’s population lives in rural areas and their livelihoods oftentimes depend on animal husbandry and milk production,” he added.  

The fund is to be used by Milko for developing its raw milk sourcing and processing capacity, adding more value in the domestic market and further integrating the dairy value chain. Presently, about half of Milko’s raw milk is sourced directly from smallholder milk suppliers and herders from Milko’s milk collection centers. The experts believe that direct sourcing of milks benefits herders and communities with extra income besides providing the beneficiary company with a sustainable and reliable source of raw material. It is also estimated that the investment will increase Milko’s export opportunities in international markets particularly in neighboring countries such as People’s Republic of China and Kazakhstan.

“This loan agreement underpins the mutual aims of Teso and ADB to support rural livelihoods especially for women and to further spur dairy processing and exports by a Mongolian company,” said the President of Teso Mr. Tsogtgerel Odon.