Source: Microfinance Focus                       Date: 21 June, 2011

Belgian Investment Company for Developing Countries (BIO) recently committed USD2 million to Suu, a dairy processor based in Ulaanbaatar. The investment aims at increasing and modernizing Suu’s processing capacity and extending its raw milk supply chain. As a result, 2,500 existing and 1,500 new herders involved in the milk supply chain will obtain a higher and sustainable income, quality standards will be raised and the country’s self-sustainability for domestic milk product supply will be improved.

Suu has a current processing capacity of 150t/day, producing 51 different products including milk, yoghurt, butter, curd and ice cream. Presently, milk supply is sourced via 19 milk collection points, where more than 2,000 herders delivered their production in 2009-2010.  As herder households selling milk have an average income three times higher than households that do not, herders’ welfare depends on their ability to sell milk.

BIO’s commitment will allow the company to increase and upgrade its existing processing/packaging capacity, extend the raw milk supply chain, including the establishment of 22 milk collection points, 13 cooling units, 2 milking parlors and working capital to fund additional milk purchases. In addition it will improve the quality standards, including health and safety.