Energy-efficient cashmere knitting equipment

Every contribution makes Mongolia’s wool and knitting industry more sustainable and resilient to climate change. Furthermore, the investment in knitting machines helps to increase the in-country processing capacity and production of finished high quality final wool products.

Mongolia is one of the world’s largest producers of cashmere and other fine wools, accounting for around a third of global raw wool production. Especially cashmere wool provides a significant portion of Mongolia’s export revenue. Cashmere, Yak and Camel wool have been an important part of the country’s cultural heritage for more than a thousand years, with many traditional Mongolian garments as well as modern fashion items made from the soft fibre. Today however, only 10% of the raw wool gets processed in the country, negating the tremendous potential for manufacturing infrastructure, jobs and income.

Nima Chug LLC is a woman-owned and led company that has been active in the processing of cashmere, Yak and Camel wool since 2012 and has been trading under the brand ‘UB Cashmere’ since 2016. Its location in Mongolia’s capital Ulaanbaatar has not diminished the owner’s vision of the need for environmental as well as economic sustainability. She regularly visits the herders that supply her company. With ecological sustainability increasingly threatened by climate change as well as some undesirable herding practices, together they strive for a more holistic approach to the production of Nima Chug’s precious raw materials.

The company’s recent market analysis confirmed the potential for high quality finished products, leading to the investment decision. Aided by the GEFF team, the selection of the new knitting machines focused on the combination of high-quality output and low energy consumption.

The USD 91,886 investment in two modern knitting machines was partly financed with a USD 64,426 GEFF loan from Khan Bank. As a result of the equipment, the annual energy consumption of Nima Chug LLC decreased by 28 MWh per year.

The new equipment also led to a reduction of CO₂ emissions by 12.8 tonnes annually, making a valuable input towards mitigation of negative effect of human activity on the climate.

The Green Economy Financing Facility (GEFF) in Mongolia was developed by the European Bank for Reconstruction and Development (EBRD) and supported by the Green Climate Fund and Japan.