CoverMongolia NewsWire
Cover Mongolia
Mogi: thought I'd share this to let new subscribers know about upcoming changes to CoverMongolia NewsWire
Cover Mongolia Fundraising Proposals
Dear subscribers,
Here are 3 fundraising ideas I'm launching:
<![if !supportLists]>1) <![endif]>Donation Scheme for Individuals: To pilot the donation scheme starting in the near future. I will set up a PayPal account for anyone residing overseas, and a local bank account for individuals residing in Mongolia.
<![if !supportLists]>a. <![endif]>Starting from May, I would run two different versions of the newswire. One to donors the current version, and a cut version to non-donors. A cut version would mean just the headlines and first few paragraphs with no links.
<![if !supportLists]>b. <![endif]>Donations could be on a quarterly basis
<![if !supportLists]>2) <![endif]>Banner Advertising: Also, I'm proposing an opportunity to advertise on the newswire as well. A top banner as you see above and 6 Middle Banners seen below, positioned between sections 1. Overseas Market 2. Domestic Market 3. Economy 4. Politics 5. Business 6. Diplomacy and 7. Social, Environmental, Others. Pricing proposals could be:
<![if !supportLists]>a. <![endif]>₮50,000 per issue for Top Banner,
<![if !supportLists]>b. <![endif]>₮45,000 per issue for Middle Banner 1,
<![if !supportLists]>c. <![endif]>₮40,000 per issue for Middle Banner 2,
<![if !supportLists]>d. <![endif]>₮35,000 per issue for Middle Banner 3,
<![if !supportLists]>e. <![endif]>₮30,000 per issue for Middle Banner 4,
<![if !supportLists]>f. <![endif]>₮25,000 per issue for Middle Banner 5, and
<![if !supportLists]>g. <![endif]>₮20,000 per issue for Middle Banner 6
<![if !supportLists]>3) <![endif]>Corporate Subscription: Since the newswire is going to be split into a full and a cut version, I thought perhaps this would create an incentive for individuals to convince their companies to pay for the subscription. Pricing scheme could be in the range of ₮100,000-₮500,000 a month depending on company size and relevance of my newswire to their business.
<![if !supportLists]>a. <![endif]>Best way for companies to take it would be: Wouldn't it be much more expensive than ₮500,000 to hire a person to do this type of market research?
Overseas Market
Mogi: Transgobi is 100% owned by Energy Resources (Mongolian Mining Corp)
Nova: Expiration of Coal Transportation Contract with Transgobi
April 14, Nova Resources Limited (AIM:NOVA) --
The Company wishes to announce that the coal transportation contract dated 14 February 2012 (the "Contract") between one of its investment subsidiaries, Nova Trans LLC, and Transgobi LLC is due to expire today. Under the terms of the Contract, the Contract may be extended by another year. The parties have been in negotiations in relation to extending the Contract but no final agreement has been reached at this time. The Company is also exploring other trucking opportunities. It will make an announcement when an agreement has been concluded, if at all.
About Nova Resources
Nova is a natural resources investment company that focuses on acquiring and developing businesses providing services and facilities to the natural resources industries, in particular exploration, mining and the extraction of resources. Through its 100% owned Mongolian subsidiary Nova Trans LLC, Nova is currently focused on the establishment of large volume road haulage coal transportation operations in Mongolia.
Ganbold Chuluun resigns from Oyu Tolgoi Board
April 15 (Business-Mongolia.com) After the victory of Democratic Party in the parliamentary elections last year, the party intensively replaced the directors and chiefs of high level organizations. As part of the process Mr. Ganbold Chuluun has been resigned from the Oyu Tolgoi LLC board. Mr. Ganbold Chuluun served as a board member from June, 2010 until his resignation in March, 2013.
He is also the Chairman of the Board of XacBank and TenGer Financial Group. He was formerly an adviser to the Prime Minister and the Constitutional Court, President of the Mongolian Advertising Association and President of the Rotary International service club in Mongolia.
He is believed to be the closest adviser to the political-heavyweight, former Prime Minister, and influential member of Mongolian People's Party Mr. Bayar Sanj.
Mongolian government has two other board members, Mr. Bagabandi Natsag, a former-president and MPP member, and Mr. Tsagaan Puntsag, Chief of Staff of the President. The new member is yet to be appointed.
State inspectors working at Oyu Tolgoi, shareholders meetings to resume after conclusion
April 15 (Business-Mongolia.com) It has been 3 months since the shareholders of Oyu Tolgoi LLC met for the first time to resolve the outstanding issues of the project. The shareholders representatives include Ministers of Mining, Economic Development, Environment and state owned Erdenes MGL and Erdenes OT companies. The major issue was the cost overrun of the project and other laws and regulations compliance issues. The project is operating on the interim-budget approved by the board each month. We assume that the interim-budget does not include the planned capital expenditure.
To inspect the cost overruns of the project a joint-working group has been formed between the government and Rio Tinto. The working group from the government is formed of Ministry of Mining, Ministry of Finance, Ministry of Economic Development, State Specialized Inspecting Agency (SSIA).
The inspection has been underway from last week and expected to draw a conclusion by the end of the month. The shareholders meeting will resume after the results become clear.
Oyu Tolgoi LLC reiterate that the project process is transparent and open for the shareholders. The results will show how transparent was the Oyu Tolgoi LLC to its' shareholders.
The shareholders meeting is scheduled to be held between 22-25 of this month.
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Local Market
BDSec: MONGOLIA STOCKS RETREAT AFTER 2-DAY RALLY
12 April 2013, Friday (BDSec) – Mongolian shares ended the week in red, snapping 2-day rally. On the Mongolian Stock Exchange, 56.7 thousand shares were traded with a value of MNT 40.0 million or USD 28.3 thousand as five shares fell for every four that rose.
Genco Tour Bureau (JTB), a tour operater that owns 40-metre tall statue of Chinggis Khaan, rallied 6.59 percent to close at MNT 89. JTB managed to increase its sales revenue from outbound tour by 30 percent to MNT 1.4 billion in 2012. However the earnings declined 5.7 percent to MNT 237.6 million for the year.
Tavantolgoi (TTL) recovered 4.17 percent to MNT 5,000. According to management, TTL has started selling its coal starting mid-March.
APU (APU) fell 3.92 percent, dragging MSE Top 20 today.
FMG Mongolia Fund lost 8.2% in March
April 15 (FMG) The MSE Top 20 slumped to a two-year low during the month, led by declines in coal mining companies on the back of poor corporate results and reduced Chinese demand for commodities. Mongolia is seeking to attract more investors to the nation's stock market. The MSE Top 20 Index has tumbled 11 percent this year which makes it the worst performer in Asia. During the month the MSE announced a reduction of trading commission rates. Furthermore there is a securities law in the pipeline, which would allow dual listings. That could boost the value of the nation's stock exchange by 33-fold to $40 billion within five years.
The economy is steaming ahead with an estimated GDP growth of 20% in 2013 (Mogi: sounds a little too optimistic for my taste), reaching a record US$10bn, primarily driven by phenomenal growth in the agricultural and mining sector. The Central Bank decided to reduce its policy rate for the first time since the subprime crisis as inflation expectations have come down. This reduction supports economic activity and bodes well for equity investors.
We remain confident in the long term success of Mongolia and we have been adding exposure to high-quality companies at attractive valuations in anticipation of a re-rating of the market.
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Economy
April 15 (MIBG) March CPI was reported by the Mongol Bank at 9.8% annualized and 0.8% monthly. Post 2012 election, the Government of Mongolia and the central bank have partnered to fight inflation which at one point reached 17.8% in May of 2011. The Government of Mongolia has been trying to control the soaring energy and food prices in the country and we believe that the Government may be succeeding in their efforts. However we at MIBG are also worried that the drop in inflation is the result of an overall demand decrease in the economy which is weakening.
The Mongol Bank also reported on Loans Outstanding at Commercial Banks for March which was 7.38 Trillion MNT (5.27 Billion USD). This represents a gain of 3% monthly and 27.7% YoY. The balance of loans overdue for March was reported at 99.9 Billion MNT (71.3 Million USD) which represents a decrease of 9.9% monthly and an increased of 62.7% YoY. The bad loans balance was reported at 308.6 Billion MNT (220.4 Million USD) representing a monthly increase of 0.9% and decrease of 3.6% YoY. We are likely seeing expansion in loans outstanding as a result of the Mongol Bank's distribution of over 800 Billion MNT among commercial banks. We believe the next challenge for the country's banking sector is to securitize the mortgage loans packages on the commercial banks' balance sheet to promote additional lending activities.
In addition to reporting on the banking sector and inflation the National Statistics Committee has released foreign trade figures for Q1 2013. Mongolian entities have traded across 104 other countries totaling 2.01 Billion USD, of which 809.2 Million USD was in exported and 1.21 Billion was imported. In total, foreign trade is down 13.8% YoY, which is represented by a 17.3% drop in imports and a 7.8% decline in exports. Not surprising, 90% of all exports are minerals products while energy products represent the largest import into Mongolia.
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Politics
April 15 (MIBG) Before Parliament discusses SEFIL they must first vote on whether it will be officially added to the Parliamentary agenda. This vote took place last Thursday with 70% of Members supporting the approval. However, it was not without heated debate. The Minister of Economic Development argued, as he has in the past, that the drop in FDI was not due to SEFIL but instead has been due to the ETT and Chalco agreement. Opposition has demanded that the Minister of Economic Development resign from his position due to his support of the legislation last year when it was introduced and for defending it at present. These members, representing 25% of the vote noted that in addition to his resignation they believe that the legislation should be abolished entirely as it has been extremely damaging to the investment environment.
Needless to say, lawmakers are realizing that they have made a tremendous mistake by passing legislation that has chased off investment and appear willing to make the necessary changes to fix the situation. That said, to what extent the "fixing" will take place and how long it will take for a positive shift in sentiment to occur will only become clear with time.
In its short history Mongolian politics has become known for taking one step back and two steps forward. This has been the case in previous legislative decisions such as the windfall profits tax in 2009 which was introduced and subsequently changed to benefit the markets. This coincided with one of the most significant catalysts in Mongolian equities to date, the OT IA signing. We are now seeing similar sentiment that was experienced in 2009 and while the legislative environment is challenging we are also facing another major catalyst that could provide the needed push for lawmakers, the OT IA dispute.
The Minister of Economic Development has long been viewed as a controversial figure in the minerals industry as well as in regards to foreign investment into Mongolia. He was the main supporter for the windfall profits tax as well as SEFIL, two pieces of legislation that have proven to be crippling for the Mongolian economy and both requiring major amendments.
We previously reported that SEFIL could be taken off the table completely only to be replaced by a new foreign investment legislation. However, we now feel that it is unlikely that SEFIL will be abolished entirely. If used correctly, following proper amendments, this legislation will act as a crucial tool in developing the minerals industry in Mongolia and should help to limit state interference in private sector transactions. This is especially true for a country like Mongolia sandwiched between two of the largest economies in the world with empowered SOEs, the threat of lost sovereignty is continually applying pressure on the Government to tightly control industry.
The Minister of Economic Development did state that the Ministry is working on a new legislation that will isolate private sector transactions from the controls of SEFIL. We have heard through various sources that the new legislation may be named the Law on Investments and it will not discriminate among foreign or domestic investors. This would be a positive move forward and may include guarantees for investors against future legislative changes depending on the amount that an individual group invests into the country.
Even with the constant change and debate MIBG believes that the Mongolian legal environment is as stable as any country could be while in Mongolia's position. As a 23 year old democracy facing various developments, external and internal, lawmakers and the government of Mongolia will be challenged and will make mistakes. However, if we look at the long term tendencies and principles that are developing Mongolia has always stood for free market and democratic principles which we believe is a key achievement for this small country sandwiched between Russia and China.
Deputy Speaker to submit resignation
April 15 (news.mn) The DP caucus in Parliament held a meeting today to discuss several issues.
One of the issues discussed was the Deputy Speaker, MP Sangijav Bayartsogt, and his failure to include the secret Swiss bank account and offshore company named Legend Plus Capital Limited in his declaration of income. The Deputy Speaker Sangijav Bayartsogt said that he is to submit his resignation to Speaker Zandaakhuu Enkhbold.
The DP caucus in parliament believes that the Deputy Speaker Sangijav Bayartsogt should take full responsibility for his ethic failure.
Former State Secretary of Health Ministry arrested over tender fraud
April 15 (news.mn) The Criminal Police have arrested the former State Secretary for the Ministry of Health, N.Tumendemberel, the Director of Diagnostics and Treatment Technology, D.Gonchigsuren and the head of the Policy Implementation and Coordination for Health Technology Assessment, P.Otgonjargal, as suspects in a tender fraud case last Friday.
N.Tumendemberel worked as the Director for the Division of Finance and Investment during the term of the former Minister of Health, S.Lambaa, before being appointed as State Secretary for the Ministry of Health by the former Minister of Health, N.Khurelbaatar after the coalition government`s drop.
N.Tumendemberel held the position until a cabinet reshuffle in 2012.
It has taken some time for the Criminal Police to start an investigation into the case, but it is likely to be a wide-spread investigation before transferring to the prosecutor.
Not a small part of the state budget is spent in the health sector. The numerous tenders for the medical center construction, current repair and facilities are expected to be fraudulent.
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Business
Prince Michael of Kent on Latitude Mongolia Fund's Advisory Board
Latitude Mongolia Fund Overview
The Latitude Mongolia Fund is a credit fund focused on merchant banking opportunities in Mongolia.
Focus on Debt
Investments will be in the form of high yielding, self-liquidating debt instruments with an equity related instrument such as options, warrants or free equity.
Control or Significant Minority Positions
If an investment is made solely in the form of equity instruments, the Fund will seek to obtain significant minority interest or controlling stakes in portfolio companies and/or Investment Agreements which will carry board representation and certain minority protections. The Fund will ensure that appropriate industry experts are employed to support the management and upgrade skills of the team of the investee companies.
Experienced Management
All members of management have considerable experience developing, structuring and negotiating investment transactions as well as developing and executing exit strategies. Individually they have been living, transacting business and developing local networks of key influencers in Mongolia for as much as eight years.
Investment Strategy
LMF's investment strategy will be focused on:
<![if !supportLists]>· <![endif]>Asset-backed lending / self liquidating investments, improving company performance via cash flow and debt enhancement
<![if !supportLists]>· <![endif]>Acquisition, completion or redevelopment of specific assets and companies in construction, general manufacturing, agribusiness, financial services and trading
<![if !supportLists]>· <![endif]>Control or significant minority stakes for expansion of existing successful companies in the mining and construction supply chains
<![if !supportLists]>· <![endif]>Distressed companies and assets with clear restructuring strategies
<![if !supportLists]>· <![endif]>Opportunities in companies across industries which are not politically sensitive or deemed strategic
The Fund will target the following industries:
<![if !supportLists]>· <![endif]>Mining Services
<![if !supportLists]>· <![endif]>Healthcare Services
<![if !supportLists]>· <![endif]>Distribution Services
<![if !supportLists]>· <![endif]>IT Services
<![if !supportLists]>· <![endif]>Consumer and SME Financial Services
<![if !supportLists]>· <![endif]>Food Processing, Import and Distribution
<![if !supportLists]>· <![endif]>Construction
<![if !supportLists]>· <![endif]>Construction Materials
<![if !supportLists]>· <![endif]>Distressed Property
<![if !supportLists]>· <![endif]>Transportation
Advisory Board
His Royal Highness Prince Michael of Kent
As chairman of his own private company, Prince Michael of Kent offers specialist consultancy advice to a number of commercial businesses operating in countries and in sectors in which Prince Michael of Kent himself has a close interest and wide experience. These sectors include construction, telecommunications, insurance, finance and tourism as well as the medical, aviation and automotive industries. A qualified Russian interpreter, also fluent in French and with a working knowledge of German and Italian, Prince Michael of Kent travels extensively on business and has led delegations of British businessmen to Mongolia, Russia and China.
Lord Simon Reading
Lord Reading, the Marquess of Reading and a member of the English House of Lords, has been active for over 30 years in the mining sector in Africa and elsewhere. Lord Reading has a broad financial background, as a Member of the London Stock Exchange, and as a Member of Lloyds. Lord Reading has served as Director or Advisor for a number of companies and charities, including New Sage Energy Corp. (TSXV), Consegna (ASX), Willow Impact Investment Fund, the Great Turk Fund, and others. Lord Reading is active in a number of charities devoted to the welfare of mothers and children, and medical care in emerging markets, and acts as the Vice Chairman of Cure International UK Ltd, an international children's hospital charity. Lord Reading was educated at Eton College and Tours University.
Nicholas Chance
Nicholas worked in the international departments and on the Boards of a number of financial and industrial companies and has been Private Secretary to His Royal Highness Prince Michael of Kent since 1997. He was awarded an Honorary Professorship by the Sinerghia Economics and Finance Institute, Moscow, in 2006. He is also a Magistrate in London, and was awarded grade of Lieutenant of the Royal Victorian Order in 2005. Nicholas was educated at Eton College and commissioned into the Royal Green Jackets, served on active service in Borneo during the 1960s. He passed the Civil Service selection board for the Foreign Office and subsequently joined the Central and East European Department of the Financial Times.
Investment Committee
Tim O'Neill, Managing Director
Tim has spent more than seven continuous years in Mongolia, most recently as Vice President Corporate Banking of XacBank, which is Mongolia's fourth largest bank. Tim has led a USAID funded project to advise Mongolian banks and the banking and capital markets regulators on development of the Mongolian financial sector. He was formerly the EBRD Senior Banker and Head of Office in Sofia, Bulgaria, and the Managing Director of the AIG Russian-American Investment Bank in Moscow. Tim was also formerly the Managing Director of Prudential-Bache Capital Funding International Mergers & Acquisitions and Leveraged Buyout Group and Head of Citibank Canada Leveraged Capital Division. Tim is currently Vice Chair of the Business Council of Mongolia.
In Mongolia Tim has led the financing of the expansion of various domestic companies in the mining and construction supply chains, financing of commercial and residential property development, private education facilities, transportation, food processing and hospitality industries and establishment of the Mongolia Mortgage Corporation, the Mongolia Corporate Governance Development Center and the Center for banking and Finance In his career experience in Eastern Europe, The Former Soviet Union and Canada he has led mezzanine and equity financing transactions in various industries including transportation, textiles, food processing, financial services and construction materials. Tim has served on the Investment Committee and Board of Directors of private equity funds and alternative credit facilities as well as investee companies in the Balkans and led a business process reengineering project for 22 companies in the Ukraine.
Jason Peterson, Director
Jason has many personal business interest outside of his investment company, spanning from finance and construction to food service. His investment company which he owns 100% has no debt and has approximately 150 investments in listed and unlisted companies around the world. Based in Perth, Jason spends at least one week per month in Mongolia and manages the Ulaanbaatar office of 10 staff and over 750 high net worth Mongolian brokerage clients and ten corporate clients. Jason holds a Bachelor of Commerce degree from Curtin University in Western Australia and a Graduate Diploma of Finance from FINSIA (Financial Services Institute of Australia)/SDIA (Securities & Derivatives Institute of Australia). Jason is a Senior Client Advisor, a Director and 33% shareholder of stock broking firm, CPS Securities.
Matthew Wood, Director
Matthew is an outstanding mineral resource explorer and developer with 20 years of global industry experience in mining and commodities investment. He has managed successful deals in coal, energy, ferrous metals, base and precious metals and other commodities. His venture capital group Garrison Capital based out of Perth, Western Australia has founded over 20 ASX Listed companies and currently manages a number of listed and unlisted resource companies. Garrison has offices in Singapore, Hong Kong, Mongolia, Brazil, USA, Chile, China and the Philippines. His unique skills in technical and economic evaluation of resource opportunities has been proven by an impressive record of nurturing resource deals from early stage, to successful market listing for his clients and his own company. Matthew has an Honours Degree in Geology from the University of New South Wales and a Graduate Certificate in Mineral Economics from the Western Australian School of Mines. He is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Matthew established Garrison Capital in Mongolia in partnership with Mongolian national, Mr. George Tumur, in April 2009. Since that time Garrison has founded six companies in Mongolia that now have valuations approaching US$1 Billion. Matthew is a resident of Mongolia and Singapore.
Mongolia Offers Cashmere Makers Loans to Cut Reliance on Mining
April 15 (Michael Kohn for Bloomberg) Mongolia approved $86.2 million of loans for cashmere, clothing and dairy companies as the government seeks to reduce the nation's reliance on mining for economic growth.
The Cabinet approved the loans, which are four and a half years in length, at a regular meeting on April 13, according to a statement posted to the government's website. The funds consist of $45 million for cashmere companies, $13.5 million for other clothing makers and $27.7 million for dairy producers. The statement didn't give interest rates for the loans.
Mongolia's mining industry, which fueled a tripling of its economy in six years, employs less than five percent of the workforce, according to government data. That's put pressure on policy makers to do more to boost living standards in a nation where almost a third of the population lives in poverty.
"Mining is capital and equipment intensive but it can't create all the jobs needed," Jim Dwyer, executive director of the Business Council of Mongolia, said by telephone today. "Jobs are vital here. A lot of jobs need to be opened up for people." The council is Mongolia's biggest business group, with members including Rio Tinto Group, General Electric Co. and Peabody Energy Corp. (BTU)
The domination of the mining industry is highlighted by Rio Tinto's $6.6 billion Oyu Tolgoi copper and gold mine, which is expected to account for one third of gross domestic product by 2020, according to estimates by the unit that oversees the project's operations. Mining already accounts for 90 percent of Mongolia's exports.
Shipments of coal, Mongolia's biggest export, totaled $1.9 billion in 2012, compared with $27.9 million of textile, according to the statistics office. Raw cashmere exports were $145.4 million, most of which went to China.
Creating Jobs
Mongolia's government estimates the cashmere and clothing initiative will help create 80 factories that could employ as many as 30,000 workers. The loans for the dairy industry will be used to set up 15 milk farms, four large processing plants and 86 smaller facilities, according to the statement.
The Oyu Tolgoi mine employed 11,151 Mongolians as of Jan. 31, according to its website.
"All these non-mining efforts are fairly embryonic, cashmere being in the lead," said Dwyer. "It's important to keep the seed planted and nourish these other logical and diversified business segments. It might be a small step, but in the right direction."
Branding Mongolia
Mongolia has also started a marketing campaign with the goal of giving its cashmere and leather the same cachet as French wine and German cars. The government agreed to set up the Mongolian National Marketing Coordination Office in 2011 to promote the country's products and also won assistance from the Asian Development Bank, which hired American Jeremy Hildreth to help create a brand for Mongolian cashmere.
Hildreth's campaign includes labeling cashmere products from the nation with tags that say "Certified Mongolian Noble Fibre."
The nation's reliance on mining has also contributed to moderating growth this year as prices of coal fell and demand from China, the biggest buyer of Mongolian goods, showed signs of slowing. Mongolia's central bank has cut interest rates twice this year as first-quarter exports declined and the pace of inflation fell below 10 percent for the first time in two years. Economic growth eased to 12.3 percent last year from a record 17.3 percent in 2011.
"We don't want to turn Mongolia into Minegolia," Puntsag Tsagaan, the president's chief of staff, said in an interview last month. "We want to keep this country's name as Mongolia."
The business of beauty and well-being
January 2013 (Worldfolio) Mrs. Selenge Lkhagvasuren, General Director of Oriflame Mongolia LLC, speaks with World Report about the opportunities her company provides for women entrepreneurs
Kindly give us a brief overview of the company.
Oriflame is a Swedish beauty and wellness company that has been established for about 45 years. We are present in over 60 countries. This year, we celebrated our 10th anniversary in Mongolia. We had a series of events well-covered by the media.
How would you assess your operations in Mongolia?
It is one of the youngest companies of our group. It is also one of the most successful markets. It has a lot to do with the fact that Mongolian women are very open and energetic. They are passionate about what they do, and are very caring about their families and their children.
As you know, 80% of our sales force are women, which makes them easily relate to our target market. That is why here in Mongolia, Oriflame is the leader in terms of market share and brand awareness. Oriflame is a brand known for its quality, variety, and push towards women empowerment (encouraging women to start businesses and excel in them). It is also one of the biggest tax payers in the country (among the top 50)—a contribution that we are very proud of.
What could other Mongolian companies learn from your operations here?
We have transparency, accountability, responsibility, and quality. We always deliver what we promise. Quality is paramount. People can be sure that they are getting something good when they buy our products.
Oriflame also has the ability to build good and efficient teams. There was a period of transition in terms of teamwork. As you know, Mongolians are pretty self-sufficient and independent. Having them get used to the idea of working as a team took a bit of time.
It was all about building the business by working with the right partners (i.e., finding people we could trust).
What are the existing trends in terms of the market and your product lines?
We find ourselves going into hair care products as a result of the demand. Cost is a huge factor. People are more conscious about what they spend. They are planning for a good future, which creates more opportunities for us.
We have had a lot of success stories in terms of people transforming their lives after moving from the countryside. When you talk about business financing, there is always the issue of collateral—you have to own property for the bank to lend you money. On top of which, your qualifications, background and experience are scrutinized. Finally, there is the issue of quality in terms of the products you deliver. Business has a lot to do with trust, which you gain by delivering what you promise and maintaining the level of quality expected of you.
Can you comment on the Mongolian business environment?
Most of the business people in the country are women, a lot of them successful. Despite the fact that it is an Asian market, it is highly diverse. Mongolians are hardy people with a strong warrior spirit. Being a woman has never been an issue in terms of competence or business acumen. Regardless of gender, you are free to excel in your field.
What is interesting to note is that while 70% of the graduates are women, a lot of those in high ranking positions are men.
I am a business woman here and have never felt marginalized in any way because of my gender. If you look at the recent elections, it changed the old patterns. Whereas women representation in previous administrations was a mere 3.9%, now, it has gone up to 20% as a result of the region's new system of quota.
How do your operations here differ from other countries?
The only difference that I see is that we are far away, which was a challenge at the beginning. Now, things are going well. We can launch new products at the same time as the other regions.
Is the product base different here?
Oriflame has a global policy in terms of its product range. As for the demand, there is a preference of skin whitening products in Asia (particularly in China and Southeast Asia). That is the only difference I can see.
What direction is the company heading?
Oriflame is the leading cosmetics company in the country, but there is always room for improvement. A lot of the people who have joined us, believing that we could help them build better lives have now progressed into good business people. I have noticed our sales force changing—a lot of our recent hires are younger. The company is becoming increasingly active in social media and web platforms. In fact, almost 100% of our operations is online. People can order our products from wherever they are in the country, and be assured of prompt delivery. I think we are gradually exploring opportunities in the younger segment of the market. I see us possibly developing new products for them. I also see us continuing in our thrust to help micro businesses flourish through women empowerment.
Speaking of which, can you tell us about your company's CSR programs?
Our goal is to make a genuine and meaningful impact on people's lives, focusing on 3 key aspects: planet, people and community. These are all anchored on the concept of sustainability.
Our operations worldwide have a strong focus on environmental protection. We source natural materials for our products, and find ways to reduce carbon emissions, water consumption and wastage at all points of our supply chain.
We take care of our people (from our employees, to our consultants to our suppliers) and comply with the legislations that exist in our locations. This is all part of the company's Code of Conduct. We follow internationally recognized standards and expect our affiliates to do the same.
Finally, we give back to the community through educational programs for young women and children in need. We equip them with skills and knowledge that encourage self-sufficiency. We empower them with knowledge that could help them improve their lives, and contribute positively to the country.
How would you like Mongolia to be perceived?
Mongolia is an Asian success story in its own right. I would like it to be known as the energetic and vibrant economy that it is, filled with young and talented people who have the motivation to succeed. As you know, 75% of Mongolia's population is under 40.
What needs to be done to further the country's growth?
If we could properly channel our resources towards the people, covering social aspects such as education and health, as well as infrastructure (to encourage more business in various sectors, including tourism), the returns would be phenomenal.
You mentioned tourism as a possible area of investment.
Yes, I believe that Mongolia is a beautiful place with a lot to offer. We just need to develop it. I think that in terms of touristic products, there is a lot to see and experience in Mongolia. There are so many areas of tourism to explore, including our potential for winter sports.
What message would you like to leave to the readers of The Independent?
Everyday (even during times of crisis), we are faced with opportunity that we could benefit from if we just kept an open mind. Daily, we are given the chance to try something that we have never tried before, and possibly, change the world. It is a gift that we all have. We just need the will to go out there and do it.
I had a very interesting business meeting, and a young person gave a speech, saying that he wanted to start something that would change people's lives; especially, in light of the distressing situation of people at the garbage slum area. He had no funds, but he tried to collect what he could, and encouraged people to do the same. The response was huge. He even got feedback from overseas—from the UK and the US. He managed to get a lot of clothes and other things for these people. He was one person, and he made a difference to the lives of those people. That is just one example of what we can do to change the world.
Latest Report on Mongolia Insurance Industry To 2017 now Available at MarketResearchReports.Biz
(PRBuzz.com) April 15, 2013 -- The report provides in depth market analysis, information and insights into the insurance industry in Mongolia, including:
<![if !supportLists]>· <![endif]>The Mongolian insurance industry's growth prospects by insurance segments and categories
<![if !supportLists]>· <![endif]>The competitive landscape in the Mongolian insurance industry
<![if !supportLists]>· <![endif]>The current trends and drivers of the Mongolian insurance industry
<![if !supportLists]>· <![endif]>The challenges facing the Mongolian insurance industry
<![if !supportLists]>· <![endif]>The regulatory framework of the Mongolian insurance industry
Summary
Mongolia has one of the fastest-growing economies in the world, with real GDP increasing from 6.4% in 2010 to 17.3% in 2011. According to the World Bank, the economy is expected to expand by 11.8% in 2012 and 16.2% in 2013, underpinned by developments in the mining industry. Led by economic growth, the Mongolian insurance industry registered a CAGR of 26.7% during the review period (2008 - 2012). However, the industry is relatively small and in its developmental stages; indeed, its first life insurance company: National Life Insurance Company LLC was established in 2008.
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Scope
This report provides a comprehensive analysis of the insurance industry in Mongolia:
<![if !supportLists]>• <![endif]>It provides historical values for the Mongolian insurance industry for the report's 2008-2012 review period and forecast figures for the 2012-2017 forecast period
<![if !supportLists]>· <![endif]>It offers a detailed analysis of the key segments and categories in the Mongolian insurance industry, along with industry forecasts until 2017
<![if !supportLists]>· <![endif]>It covers an exhaustive list of parameters, including written premium, incurred loss, loss ratio, commissions and expenses, combined ratio, total assets, total investment income and retentions
<![if !supportLists]>• <![endif]>It profiles the top insurance companies in Mongolia and outlines the key regulations affecting them
Reasons To Buy
<![if !supportLists]>• <![endif]>Make strategic business decisions using in depth historic and forecast industry data related to the Mongolian insurance industry and each segment within it
<![if !supportLists]>• <![endif]>Assess the competitive dynamics in the Mongolian insurance industry
<![if !supportLists]>• <![endif]>Understand the demand-side dynamics, key market trends and growth opportunities within the Mongolian insurance industry
<![if !supportLists]>• <![endif]>Identify the growth opportunities and market dynamics within key segments
<![if !supportLists]>• <![endif]>Gain insights into key regulations governing the Mongolian insurance industry and its impact on companies and the industry's future
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Key Highlights
<![if !supportLists]>• <![endif]>The non-life insurance segment accounted for the largest share of the total insurance written premium value in 2012
<![if !supportLists]>• <![endif]>The introduction of compulsory motor insurance in October 2012 is expected to result in a 30% expansion in the size of the motor insurance category
<![if !supportLists]>• <![endif]>Government-backed low-income housing projects, which commenced in 2009, provide 6% interest loans for first-time buyers and will increase the demand for property insurance
<![if !supportLists]>• <![endif]>Mongolia has one of the fastest-growing economies in the world
<![if !supportLists]>• <![endif]>The expansion of the mining industry is expected to generate a demand for insurance products
Mongolians find new market for used cars in Kazakhstan
April 15 (UB Post) Used cars imported into Mongolia from Japan and Korea can reportedly be sold in Kazakhstan for as much as triple the price they sell for in Mongolia, so entrepreneurial Mongolian car salespersons have begun selling used cars in Kazakhstan.
Traders of Da Khuree Auto Market in Mongolia are reportedly travelling to Astana, the capital city of Kazakhstan, via the Ulaanbaishint border of Mongolia, located in Tsagaannuur soum of Bayan-Ulgii Province, and are selling cars there.
According to the Kolesa.kz website, a Toyota Carina manufactured in 1997 can sell for 9,500 USD (13.4 million MNT) in Astana. The same car will sell for only 5 million MNT at Da Khuree market in Mongolia, however. And while a Toyota Corolla manufactured in 2008 can sell for approximately 30 million MNT in Astana, the same car sells for around 20 million MNT in Mongolia.
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Diplomacy
Japan, Mongolia trial joint carbon offset market
BEIJING, April 15 (Reuters Point Carbon) - Japan's government has moved a step closer to launching an international carbon offset market that would allow it to offset its greenhouse gas emissions by exporting so-called clean technology in return for carbon credits.
Last week, officials from the Japanese and Mongolian governments inked a deal outlining how the scheme would work after signing a memorandum of understanding in January, according to a senior official at Japan's Ministry for Economy, Trade and Industry (METI).
Japan's government will subsidise the first CO2-cutting projects, but hopes to attract private sector investment to help it meet its international pledge to cut emissions 25 percent under 1990 levels by the end of the decade.
Known as the Joint Crediting Mechanism (JCM), Japan hopes to offset its own emissions by exporting technology, such as nuclear energy, or helping build high-speed rail networks that could cut emissions in other nations. (Mogi: now I realize why they are pushing to build a metro in UB)
However, the Mongolian scheme will not produce carbon offsets immediately and no details were given on when the first credits would be issued.
"We will not issue offsets for the time being, it will start as a non-credit system," Kazushige Nobutani, director of METI's Global Environmental Affairs Office, said.
"Launching the scheme is much simpler without credits, and it means it can start earlier," Nobutani added.
Nobutani did not give details on the type of projects the government would fund.
Japan is already in talks with a number of nations, including Bangladesh, India, Indonesia and Vietnam, to set up bilateral markets that will act as an alternative to the U.N.-regulated Clean Development Mechanism.
Tokyo's refusal to sign up to new legally binding targets under the 1997 Kyoto Protocol starting this year means Japan is ineligible to participate in the CDM to help it offset emissions.
But the government, which refused to sign the deal as it did not force cuts on other nations such as China and the United States, is eager to launch alternative markets that it hopes will form the basis of a new 2015 climate deal.
The new deal will start in 2020 and force cuts on all major emitting nations.
The scheme has been criticised by green groups, which have accused Japan of seeking to bypass international oversight of projects that is designed to ensure the quality of carbon credits issued.
Nobutani said the maximum amount of offsets that may be issued to individual projects in the Japan-Mongolia scheme will be decided by negotiations between the project owner and the two governments.
The actual number of credits awarded to each projects will be based on a verification report written by an independent third party.
Some companies have shown interest in developing projects for the new mechanism, but the METI official declined to offer further information.
The joint market with Mongolia, though Japan's first, is expected to yield modest emission reductions.
Even though Mongolia is a growing coal producer, the country emitted only 17.7 million tonnes of CO2 equivalent in 2007, about 1.5 percent of Japan's annual emissions.
Youth build a rainbow of friendship between China and Mongolia
April 15 (China Daily) A project aimed at bringing the young people of China and Mongolia together was launched in Ulan Bator on Friday. Named "Solongo", meaning "rainbow" in Mongolian, the project is one of the largest ever efforts to strengthen the relationship between the two nations. It was co-launched by the Chinese Embassy in Mongolia, the government of Inner Mongolia autonomous region, and several of Mongolia's ministries.
Later this month, 23 city designers from Mongolia will pay a weeklong visit to Inner Mongolia's Hohhot, Ordos, and Erenhot, to exchange ideas and experiences with their peers in Inner Mongolia. It will be the first of many exchanges between young professionals from both countries. Reporters from each country are expected to take part in a similar exchange in July.
Bai Yugang, the deputy head of the autonomous region's international communication association, says the project will run for more than three years. Activities in health, arts, and sports have been scheduled, and other topics are being considered.
"The Inner Mongolia autonomous region and Mongolia share a common language and traditions and this advantage and geographic affinity will be a solid base for communication between the two sides," Bai says.
The Mongolian organizers echoed Bai's sentiments. "It's phenomenal to expand communication to so many fields," says Tumenjargal Magaadai, Mongolia's Deputy Minister of Culture, Sports and Tourism. "It's time to inherit our predecessors' efforts promoting the two countries' economic and cultural cooperation and pass them on to the younger generation."
The relationship between the two sides has blossomed in recent years. Ulan Bator has hosted the Inner Mongolia Culture Week three times, and Hohhot held a similar event to introduce Mongolia in 2010.
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Social, Environmental and Other
Canada to assist women's participation in politics
April 14 (UB Post) The female Members of the Parliament (MPs) L.Erdenechimeg, S.Odontuya, R.Burmaa, Z.Bayanselenge, D.Arvin, and Ts.Oyungerel met senior consultants of the Canadian International Development Agency (CIDA), Nancy Spence and Mary Collins, to launch bilateral cooperation on several directions such as to conduct training on increasing the women quota for legislators, to make vested social changes, to enhance the voter's education, and to strengthen the capacity of women politicians.
The women's caucus of the Parliament of Mongolia and CIDA have reached an agreement to implement a one-year term project under the framework of the abovementioned issues, with the support of the Institute of Public Administration of Canada.
The women MPs have given a brief introduction about the draft bills that they are developing independently and jointly, the bills that were approved last fall, and their accomplishments. Also our women parliamentarians are hoping that the project to be implemented from 2013 to 2014 will lay the grounds of further long-term cooperation and will be beneficial as the victory of more women candidates in the 2016 Parliamentary Elections directly depend on them.
"Infrastructure creation does play an important role in Mongolia's economic progress, but the bottom line will be determined by the country's social development. The range of your projects is amazing. The majority of issues Mongolia faces is similar to the issues we talk about in Canada. The number of women parliamentarians is increasing. However, the rate is still at 24 percent. It has not reached the minimum figure of 30 percent. It is important to be aware of various international experiences with regard to increasing the number of women parliamentarians, but Mongolia should determine by itself which system, method, and structure is important for the country. I believe our collaboration will be successful," said Mrs Collins during the meeting.
Mogi: soooo hated BSB in high school but girls loooved it, so this one will be quite a nostalgia
Backstreet Boys announce tour stop in Mongolia
April 15 (news.mn) The Backstreet Boys have announced that they will be doing a tour in Mongolia on their official website.
On the website it announces, "Mongolia! We're coming to see you on May 23rd".
The Backstreet Boys tour in Mongolia has been discussed for some time. EVENTO LLC has arranged a project to invite one of the most popular boy bands to Mongolia. The team previously successfully organized a performance by Michael Learns To Rock in Mongolia last July.
Mongolia Monday- Growing Up In Socialist Times
April 15 (Susan Fox) Mongolia became the world's second communist country, after the Soviet Union, on November 26, 1924. In many ways this was a great improvement over the chaos, violence and domination by China that the country had been mired in for years. But after that, for sixty-six years, the country was essentially closed to the west. The door cracked open a little in 1962 when Mongolia became a member of the United Nations. Supreme Court Justice William O. Douglas and his wife traveled to the Land of Blue Skies to see and evaluate the country under the auspices of the National Geographic Society, which published a lengthy article with many photographs. Owen Lattimore also wrote his book about socialist Mongolia, "Nomads and Commissars" around the same time.
In 1990, while most of the world was focused on the collapse of communism in the Soviet Union and Eastern Europe, the Mongols were carrying out a difficult but ultimately successful non-violent revolution and transition to a parliamentary democracy. The economy collapsed completely once the Soviet Union ceased providing economic support and life became extremely hard in the following years. There is a generation now who has no memory of "socialist times", but those who are in their late twenties and older remember them well.
The following first-person account was written by Mongol friend who I met a few years ago through Facebook. We have also met in person in Ulaanbaatar. He asked for my assistance on a project that involved an essay. Once I read it, I asked his permission to share it on my blog. History, as time passes, can wander down some odd roads as the people who were actually a part of an historical event pass away. I think that first person accounts like this are extremely important. So, thank you my friend (bayarlala minii naiz) for allowing me to share your story:
I was born in 1987 in Zavkhan Aimag, western Mongolia, to an ordinary family. My father was a carpenter and my mother was a typist. They were both necessary and important jobs back then but they did not require a professional degree. My father used to work for a State furniture factory. During his free time, at night and on weekends, he used to make furniture to sell in order to feed his family because his salary was not sufficient. My mother raised five children and while she was working she told us that sometimes she just wanted to lay down on the sidewalk when walking home because she was so exhausted. In the Soviet era, if you were not the son or daughter of someone influential you had very little chance to go to university and receive a higher education. My mother applied to university three times but she was always pushed back by children whose parents were of good background, even though her grades were acceptable.
In 1990, when Mongolia made the transition from communism to democracy, both my parents lost their jobs as did so many others. Almost everyone had to find some way to survive. Many people started small businesses by purchasing various items (mostly clothes) from China, which they would then sell in Russia. They also brought goods from Russia to Mongolia on the Trans-Siberian railway. This was how many survived. Some Mongols spent months on the train, never going home. My mother worked in one of these businesses and after a few years our life started to improve a little. Unfortunately, within a few years these small businessmen and women were pushed aside by large companies that had also started to import goods. Because these small businesses were not as profitable anymore, my sister and brothers began helping our parents by purchasing goods from the black market to sell on the streets. It was a difficult time in our lives.
In 2007, I began my studies in the School of Foreign Service at the National University of Mongolia, majoring in International Relations. I have always enjoyed interacting with people from different cultures, perhaps because a couple of times I traveled to Russia on the Trans-Siberian train to help my mother. In my second year in 2009, I was selected for the Undergraduate Exchange Program, which was funded by the Open Society Foundations. This program allows students to participate in a one year educational program in the United States.
In 2011, after I received my degree from the School of Foreign Service, I joined a Canadian-owned mining company, the Mongolia Minerals Corporation (MMC). I was initially hired as a translator but since then I have been promoted three times and am now the Manager of the Government Relations Department.
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Mogi Munkhdul Badral Bontoi
Cover Mongolia
Email: mogi@covermongolia.mn
Mobile: +976 9999 6779
Skype: mogibb
P Please consider the environment before printing this e-mail.
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