There are currently 35 leather processing factories, and 171 producers of final leather goods in Mongolia according to the latest government figures. Many of these businesses operate only on a seasonal basis up to six months a year largely due to the lack of working capital to procure raw materials.
The Government of Mongolia, in particular, the Ministry of Industry and Agriculture, is proposing a new initiative to address the problem, and support the leather processing sector in general, by issuing a MNT 200 Billion bond. According to Minister H.Battulga, who introduced the program at the Economic Standing Committee of the Parliament, once implemented the initiative will generate 25,000 new jobs and result in the production of leather goods valued at USD 460 Million.
It is also expected that the whole supply chain of the leather production will be improved, and processors will be able to use more local raw materials produced by the herding community. Currently, only 25 percent of the animal skin and hides are being processed in Mongolia, while the rest is being exported to China in raw form.
As the program was supported by the Economic Standing Committee, it will now be discussed at and finally approved by the Parliament in the near future.