ADB, Mongolia's Milko Sign Deal to Expand Dairy Operations and Improve Rural Livelihoods
ULAANBAATAR, MONGOLIA (2 December 2019) — The Asian Development Bank (ADB) signed a local currency loan equivalent to $7.5 million with Milko LLC (Milko), a member of the Teso group (Teso) and a leading dairy company in Mongolia, to support the company’s plans to expand its dairy operations, while empowering women and men throughout its supply chain. This is ADB’s first private sector loan in Mongolia denominated in local currency.
The project will help Milko develop its raw milk sourcing and processing capacity, adding more value in the domestic market and further integrating the dairy value chain. About half of Milko’s raw milk is sourced directly from smallholder milk suppliers and herders from Milko’s milk collection centers. Direct sourcing benefits herders and communities with extra income, while providing Milko with a sustainable and reliable source of raw material.
“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.”
ADB’s assistance will also help the company procure modern equipment, invest in more efficient management systems, and ensure that its end-to-end operations follow international certification standards. This will increase Milko’s export opportunities in international markets such as the 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.
ADB will help Milko to develop and implement a plan to increase the share of women directly and economically benefitting from Milko’s procurement of raw milk and wild berries, and increase the share of payments to women for raw milk.
Teso is a leading food and beverage group in Mongolia. Teso produces dairy products and beverages, ice cream, and noodles. Milko is the member of the Teso group that produces dairy products and beverages.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.