Dornod Shim Agro

Debt : September 2016

BIO has granted a USD 1 M loan to Dornod Shim Agro, a Mongolian agricultural company.

Amount

€ 934,579.44

Type of investment

Debt

Development impacts

  • Private sector consolidation/innovation
  • Food security & rural development
  • Promotion of ESG best practices

Beneficiary locations

Asia: Mongolia

Investment field

Enterprises

Activity

Agroindustry

Organisation

Dornod Shim Agro

Domicile

Mongolia

Dornod Shim Agro (DSA) is developing and operating environmentally efficient (zero-tilling) farms in Eastern Mongolia, where it grows cereals (wheat, barley..) and canola.

Since the collapse of communism in the early 90s and all related farm infrastructure, Mongolia has still not managed to ensure its wheat supply food security and uses only a fraction of its former farmland, the remainder staying abandoned. Producing on average 400,000 tons of cereals on average annually from 2009 to 2013, local needs can only be met by importing over 100,000 tons, mainly from Russia/Kazakhstan. DSA redevelops 30,000ha of derelict farmland and sells its wheat to the local mills, producing flour for local food consumption.

The government strongly supports local production through a number of measures (support fund, subsidies, quota etc.) but even without these, DSA is viable. Its canola production is exported, which generates a source of hard currency income.

Development impacts

  • Private sector consolidation/innovation

    Know-how & technology transfer: Although appropriate for the climate, zero tillage technique is relatively unknown in Mongolia. DSA has proven to transfer its know-how to other farmers also.

    Market structuring effects: local mills have low utilization rates due to the lack of supply; players like DSA with substantial volumes can lift the whole value chain

  • Food security & rural development

    Each ton of cereals produced by DSA substitutes import and increases food supply/autonomy

    Land cultivated by DSA is abandoned former farmland onto which local population can be employed again

  • Promotion of ESG best practices

    DSA subscribes to ESAP, staff well treated

    Minimal environmental impact approach (zero-tillage)

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