The processing industry consists of wool, cashmere, leather, wood, metal, textile, and food production. The recession of the processing industry has stopped. The main cause of continued decline over the past decade in industrial production, in
particular for the agricultural raw materials processing industries was a shortage of financial resources. These financial constraints led to the in ability of enterprises to secure raw materials, resulting in an under utilisation of capacity. A number of measures were taken by the Government to support industrial development. Several programs are under implementation. The processing of animal-originated raw materials such as leather, cashmere and wool is playing a dominant role in the processing industry.
particular for the agricultural raw materials processing industries was a shortage of financial resources. These financial constraints led to the in ability of enterprises to secure raw materials, resulting in an under utilisation of capacity. A number of measures were taken by the Government to support industrial development. Several programs are under implementation. The processing of animal-originated raw materials such as leather, cashmere and wool is playing a dominant role in the processing industry.
Mongolia processes about 3.0 tons of cashmere, about 20 tons of sheep wool, around 2.0 tons of camel wool, more than 7.0 million skins in kind and produces more than 30 types of products and supplies to the domestic market as well as exporting de-haired cashmere, scoured wool, processed leather, knitwear, blankets, carpets to more than 40 countries such as USA, European Union, China, Russian Federation, and Japan. One of the biggest companies of the wool and cashmere-processing sector is "Gobi" Shareholding Company. This company manufactures and exports more than 60 percent of the wool and cashmere processing sector. Textile production and its exports have been increased in the last years and it shares more than 10 per cent of total exports.
Favourable trade conditions given to Mongolia from international organisations encourage exports of textile products. As a result, the export of knitted products has been increasing steadily. Around 20 per cent of knitting product exports is cashmere knitted products. The new metallurgical manufacture to produce products of international quality was established in 1995 with an annual production capacity of 140 tons. Although Mongolia is considered a country with scarce timber resources, the Government makes an appropriate effort to efficiently utilise these scant resources. The Gobi Cashmere Company is the largest Mongolian producer of dehaired cashmere, cashmere fabrics and apparel, and other luxury fibres such as camel and yak wool.
Mongolia is the second largest producer of cashmere in the world and Gobi Cashmere owns over 21 per cent of the world's cashmere processing capacity. The Gobi Cashmere Company was established in 1981 with investment provided by the Government of Japan. Currently, 74.9 per cent of the company is state-owned and the remaining 25.1 per cent is trading on the Mongolian Stock Exchange. The company has the capacity to process 1,000 tons of raw cashmere (yielding approximately 470 tons of dehaired cashmere annually), 200 tons of camel wool, and other fibres such as yak hair.
The Gobi Cashmere company produces garments and fabrics and has a capacity to produce 68 tons of cashmere and camel wool tops, 120 tons of cashmere yarn, over 350 thousand pieces of knitwear and more than 153 thousand meters of woven fabrics. In recent years, Gobi Cashmere has maintained double-digit growth rates in both productivity and export revenues. The company consists of six major interconnected manufacturing processes and employs 1941 people. In recent years, the company made significant investments to upgrade its cashmere technology and equipment by installing Japanese fully automatic knitting machines and cleaning and shrinking equipment for knitted garments. On May 28, 2003 the Government approved a decision to privatise the state owned 70 percent shares in the Gobi company and released a resolution.
