Launching a State-of-the-Art Cheese Production Facility

APU Dairy LLC demonstrates dedication to sustainability and quality. Their innovative production practices in a growing sector steeped in traditions, support local employment and positively impact climate mitigation.

Mongolia is one of the world’s largest nomad countries. Dairy production in Mongolia is a vital part of the country’s economy and cultural heritage, characterized by rich traditions. Recently, there has been a growing demand for dairy products in urban areas, particularly in Ulaanbaatar, prompting local producers to expand their offerings. Despite challenges posed by the harsh climate and increasingly extreme weather events, agriculture contributes over 10% to Mongolia’s GDP, primarily through nomadic animal husbandry.

APU Dairy LLC, a subsidiary of the 97-year-old APU JSC, stands out as Mongolia’s second-largest dairy producer. Founded in 2014, APU Dairy has recently launched a cheese production facility that meets EU standards, located in the Selenge province. This new plant has enhanced logistics and fosters collaboration with milk producers, employing modern and highly energy-efficient equipment in its production processes, ensuring safe dairy products of high-quality standards.

In response to increasing consumer demand, the company decided to invest in the expansion and further improvements of its production facilities. With consultancy from the Green Economy Financing Facility (GEFF) team, the company selected a modern cheese production line, prioritizing both increased output and decreased energy consumption. Furthermore, the company invested in sustainable building upgrades by insulating walls, roof, and floors and by installing energy-efficient windows and efficient lighting systems.

Since opening of the expanded facility in 2023, the cheese plant has produced 90 tonnes of cheese, supplying 15% of the local market. This initiative has created 45 jobs and involved collaboration with over 500 herders to source milk. The company is committed to reducing reliance on imports.

The investment was partially financed with a USD 4,306,889 GEFF loan from Khan Bank. As a result of the new equipment and building enhancements, APU Dairy LLC has reduced its annual energy consumption by 453 MWh. Additionally, the equipment upgrade has allowed the company to cut its CO₂ emissions by 177.3 tonnes annually, making a valuable contribution to the mitigation of man-made climate change.

The Green Economy Financing Facility (GEFF) in Mongolia was developed by the European Bank for Reconstruction and Development (EBRD) and is supported by the Green Climate Fund (GCF) and Japan, which have been instrumental in promoting sustainable development in the country.