Opportunity for investment partner for Mongolian meat processing company

1. Who is Khatan Shuikh Impex LLC?
2. What is Company's achievements and awards?
3. What are the main products?
4. What is the Export Potential and Demand for an Organic Meat?
5. How does Khatan Shuikh distribute its products?
6. What is the process of making production?
7. How does the company monitor its product quality?
8. How does Khatan Shuikh buys its supplies?
9. What are the Khatan Shuikh's challenges and its financial needs?
10. Why you should become an investment partner with Khatan Suikh?

Khatan Suikh Impex LLC (HASU) was established in 1995. It is owned by a woman entrepreneur and employs 80 permanent staff.

The Company product range includes sausages, smoked meat, canned meat and precooked packaged foods. Currently 19types of sausages, 5 types of smoked meat, 9 types of canned and precooked packaged meat products are being produced under the HASU brand name.

The company is continually striving to develop new product and has earned Mongolian patents for the following products and production technologies:

• Technology for producing cooked sausages
• Packed food (meat soup, stewed horse meat and mutton)
• Technology for producing white sausages
• Technology for processing animal sinew
• Canned pet food
• Smoked beef

2. What is the Company’s achievements and awards?

2000: Award of the Chamber of Commerce and Industry of Mongolia “National Best Brand”

2002: Gold Medal from the International Exhibition. “Best Product of Export” for canned meat.

2003: “Genuine Food” pre-cooked food in PVC packaging- the gold medal “Selected Product of the Year”

2004: License of “EXPO-2005” and the letter of Honour “Best Debut Exporter” of the chamber of Commerce and Industry of Mongolia.

2005: the title of a Team “Quality Champion of the State”

Award of the Ministry of Food and Agriculture of Mongolia “The Best Food producer of the state”.

Award "Perfect Quality" amongst the "Selected 99 products"

Respectively and in addition honored with the opportunity to participate with its products in World Expo Exhibition, held in Aichi city of Japan.

2007: Award of best product with best packaging.

Khatan Shuikh produces various kinds of sausages, canned and packed meat for both the domestic market and for export.
Sausage
Sausage products are made from pork and beef with different flavors and packed in 0.3-2kg packs. There are two main categories for sausages, boiled and smoked. Sausages are sold in the domestic market.

HASU sausage products are 30-40% more expensive than the new small sausage producers but at a similar price range with other major producers, thus indicating its quality and reliability as reputable product from an established company. 

Canned products
Nine types of canned products are being produced for both the domestic and export market. (Figure 2) The products are canned in 500 gram weights, and are based on the favorite Mongolian traditional cooking receipts, easy to use and time saving for consumers.

Since 2003, canned beef and beef rib products have been produced against orders from Korean customers.

Pre-cooked meat products
More than 10 types of pre-cooked meat products are being produced in 100gr/2kg aluminum packs in different recipes which are garnished with rice, vegetable and flour etc. 
Both canned and pre-cooked meat products can be produced at customer’s preferences for taste and flavor they require.

Pet food

Four types of canned pet food are produced for the foreign market. 200gr canned dog foods made from horse meat have been exported since 2001 to the Japanese company "Prairefoods" Co Ltd. The company plans to increase pet food export significantly with a strategy of producing for major brands worldwide.

Other products
A small amount of other meat products, such as frankfurter, white sausage, smoked pork, beef, mutton, and pate are produced and all these sectors have potential for growth.

Khatan Suikh operates a Mongolia distribution network to deliver products directly to customers and retailers in Ulaanbaatar, Darkhan, Erdenet, Baganuur cities. There are in total 116 sale locations selling HASU sausages both in the capital city and in the countryside.

60% of the sausage products are sold through supermarket chains and 40% are sold by other shops, company shops and distributors. The distributors are given the exclusivity in a region to sell the products at company price.

The products are delivered in 3-5 hours, thus the distributors shops are located in the areas where road and railway infrastructure are good.

The company stores sell all the company products at the company price. Presently, there are 4 stores in the busiest part of Ulaanbaatar. Sales are generally excellent because of their prime locations.

6.What is the process of making production?

Meat products are made with beef, horse meat, mutton and goat meat which come from ecologically-pure and fresh natural grassland pastures. 

Preservation is done by canning or PVC packaging and sterilization, enabling the products to have long shelf lives.

Canned meat production
The canned meat production line was first built in 2000 by expanding the sausage production line. The original intention was to manufacture pet foods for the export markets.

By modernizing this production in 2004 the company was able to produce canned meat products for human food consumption. The line is equipped with 2 coolers with a capacity of 20 tons, 2 electrical saw machines and 4 containers for hanging the material.

It produces products packaged in a can or an aluminum bag with weights of 100-2000 grams and an expiry date of 2 years.

Currently the company is processing one ton of meat per day into its various packaging.

Sausage production
The company produces sausages based on the blend of Mongolian traditional sausage combined with the European technology. The result is 2 main types of sausages, cooked and smoked.

Currently the production output of sausages is one ton per day. German machinery and equipment was installed in 2004. The value of the sausages produced by the company increased in 2006 primarily due to an increase in the selling price to differentiate high quality sausages.

7.How does the company monitor its product quality?

Khatan Suikh has a laboratory facility to control the quality of the products.

The laboratory has the approval of the State Veterinary Authority and State Hygiene Monitoring department. This ensures that the reliability and quality of the products are maintained with the laboratory facility being up to international standards and carrying out all necessary tests such as chemical, bacteriological and hygiene for the final products.  

The laboratory tests products from each stage of production starting from the receipt of the raw materials.

8.How does Khatan Shuikh buys its supplies?

Currently the company buys most of the materials from one major meat processing company which has its own slaughter house.

30% and 90% of the raw materials were purchased from that company in 2005 and 2006, respectively, and the other sources for the purchase of raw materials are major Meat Changers.

The company procurement policy is to source its raw material preferably from suppliers, who slaughter the animals using their production facility. Beef take 70-80% of the total raw material purchase depending on the customer orders.

9.What are the Khatan Shuikh's challenges and financial need?

Currently Khantan Shuikh Facing five major challenges:

1. Working Capital to purchase large quantities of raw material in season.
   The raw material cycle is short and requires a significant amount of financing as in order to keep production operations continuous. The company needs to have reserves of raw materials that will last until August, when there are new supplies of meat available. 
2. Refinancing pre-existing high interest loan with low interest loan or find potential partner.
3. Investment in new procurement centers in chosen locations to secure regular and consistent meat supply. Working closely with herders and introducing bonus system to those who committed. 
4. Investment in production equipment for packing and sealing the cans by replacing the existing manual operation. 
5. Increase current marketing activities by hiring third party agencies in targeted market countries. 

Khatan Shuikh is clearly one of the best known companies in Mongolia. It is products have huge potential in international market, since everyone in the world become aware of naturally and organically produced goods and services. 

As the world economy turned into its worst, many good companies suffer financially and needed assistance to keep its work going. Countries like Mongolia where economy is turning into black hole and people loosing everything by the minutes need lots of partners.

By becoming partner you will save 80 people full-time workers lifely hood, hundreds or thousands of possible people who would benefits its natural organically processed products, and own one of the best companies in Mongolia.

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