Mongolia’s APU Dairy Secures $40 Million Loan to Expand Operations
Source: DairyNews.today
Mongolian dairy producer APU Dairy has secured a significant $40 million loan from two international development finance institutions to fund its expansion plans. The European Bank for Reconstruction and Development (EBRD) is providing $20 million of the financing, with up to $2 million coming from Canada’s High Impact Partnership on Climate Action (HIPCA).
The company, one of Mongolia’s largest domestic dairy producers, will use the funds to enhance its processing capabilities, including acquiring new processing and packaging lines and upgrading its milk sourcing systems. The goal is to triple the capacity of APU Dairy’s plant to meet rising demand.
In addition to plant upgrades, the loan will address APU Dairy's working capital needs. The financing is also supported by a parallel loan from the Asian Development Bank (ADB), underscoring the project’s broad backing.
APU Dairy, fully owned by APU JSC, the largest and oldest beverage producer in Mongolia, aims to bolster the climate resilience of over 1,700 local farmers who supply raw milk. The company plans to improve the sustainability and productivity of small-scale yak herders in the Arkhangai region by introducing new technologies and market skills.
Currently, Mongolia produces 800 million litres of raw milk annually, but only 10% is processed due to limited herder connections. As a result, dairy plants operate at half capacity, and seasonal fluctuations lead to reliance on imported milk powder during the winter months.
To address this issue, APU Dairy will establish 25 raw milk collection centres within a 450km radius of the capital Ulaanbaatar. These centres will create a stable market for herders and generate 320 new jobs by 2028, supporting the growing demand for raw milk from the expanded processing facility.
CEO Bayarmagnai Galsumiya expressed confidence that the loan and accompanying technical assistance would drive the future development of Mongolia’s agriculture and food production sectors. He also highlighted the positive impact on rural herders, improving their livelihoods, knowledge, and skills.
This development follows similar efforts in the Mongolian dairy sector, such as the 2019 financing secured by Suu Milk from EBRD to enhance its production facilities, further underlining the growing investment in Mongolia’s dairy industry.
In addition to plant upgrades, the loan will address APU Dairy's working capital needs. The financing is also supported by a parallel loan from the Asian Development Bank (ADB), underscoring the project’s broad backing.
APU Dairy, fully owned by APU JSC, the largest and oldest beverage producer in Mongolia, aims to bolster the climate resilience of over 1,700 local farmers who supply raw milk. The company plans to improve the sustainability and productivity of small-scale yak herders in the Arkhangai region by introducing new technologies and market skills.
Currently, Mongolia produces 800 million litres of raw milk annually, but only 10% is processed due to limited herder connections. As a result, dairy plants operate at half capacity, and seasonal fluctuations lead to reliance on imported milk powder during the winter months.
To address this issue, APU Dairy will establish 25 raw milk collection centres within a 450km radius of the capital Ulaanbaatar. These centres will create a stable market for herders and generate 320 new jobs by 2028, supporting the growing demand for raw milk from the expanded processing facility.
CEO Bayarmagnai Galsumiya expressed confidence that the loan and accompanying technical assistance would drive the future development of Mongolia’s agriculture and food production sectors. He also highlighted the positive impact on rural herders, improving their livelihoods, knowledge, and skills.
This development follows similar efforts in the Mongolian dairy sector, such as the 2019 financing secured by Suu Milk from EBRD to enhance its production facilities, further underlining the growing investment in Mongolia’s dairy industry.
