ULAANBAATAR, Mongolia - During the Mongolian president's U.S. visit this week, that country's largest cashmere manufacturer, the Gobi Corporation, is preparing to announce its plans to enter the U.S market by September.
The subsidiary Gobi Cashmere USA will be located in Los Angeles, and is launching an e-commerce website specially dedicated to U.S customers.
The Gobi Corporation currently supplies high-quality raw cashmere products to the international market. However, its presence in the U.S. has been small due to fierce competition from China. As of now, Gobi Corporation has franchise stores in Chicago, Los Angeles and San Francisco. If a trade bill under consideration is passed, cashmere companies from the young democratic nation would be able to better compete with its competitors.
Increased trade between the U.S. and Mongolia would benefit many stakeholders in the cashmere supply chain, including nomads, employees and, ultimately, consumers.
The nomads of Mongolia rely on the sale of their raw cashmere to manufacturers for half of their annual income, which is badly needed for educating their children as well as other annual costs.
Nomads herd goats whose raw cashmere is supplied to the market. The traditional Mongolian nomadic way of coexisting with livestock offers a special feature of differentiation to cashmere sourced from Mongolian land, in terms of traditional heritage, and special care and humane treatment for the goats.
Additionally, Gobi has more than 2,800 employees - 80% of them female. As a part of the company's social responsibility, Gobi thrives to be the number one organization that leads others by example by taking good care for the employees' well-being, especially for those in need. This is another driver of the company's expansion to the international market, as the production increase will directly affect the employees' standard of living.
Mongolia, a landlocked country sandwiched between Russia and China, is utilizing its third-neighbor policy to its highest potential by expanding its diplomatic relations with countries around the world.
Diplomatic relations between Mongolia and the U.S. were formally established on Jan. 27, 1987, and it has expanded both on economic and political platforms. On July 26, 2018, U.S. Rep. Ted Yoho and nine other members Congress introduced a trade bill seeking to promote trade between the U.S. and Mongolia by allowing duty-free treatment for certain imports from Mongolia, such as cashmere products and textile materials.
Mongolian President Battulga Khaltmaa visited the U.S. on Wednesday to express his full support for the trade bill and appreciation to the sponsors.
The trade act would be helpful the Mongolian economy in a variety of ways beyond opening the U.S. market to its cashmere. Mongolia supplies about 48% of the total raw cashmere to the world market, making it the second-largest raw cashmere supplier, yet they use only 15% of it to make ready-to-wear finished cashmere garments locally. The remaining 85% of the raw cashmere is sold as a semi-processed material to other markets with less added value, which is becoming the focus area of the Mongolian government and domestic cashmere manufacturers. The U.S. is considered as the second largest cashmere consumer country. This duty-free treatment would open a tremendous opportunity for Mongolia to diversify its economy.
The world has heard about the rich history of Mongolian invasionshundreds of years ago, but now, they are ready to invade the world cashmere market with their silky-soft pure products. And now they are coming to your doorsteps, America.
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