1. Mongolia-Taiwan Trade and Economic Meeting Taipei, 27-31 October 2013

2.  Government policies and legal framework  Building Material Industry Promotion Program  Project on “Integrated Supply and Transit Transport Logistics Development”  “Integrated Supply and Transit Transport Logistics Development for Imported Wood and Timber Products” (Altanbulag FTZ)  “Integrated Supply and Transit Transport Logistics Development for Imported Construction Material” (Zamyn-Uud FEZ)  “Development of Construction Material Wholesale and Supply Integrated Terminals (east- and west-most vicinities of Ulaanbaatar City)  Expected implementation period and main activities  Stakeholders  Estimated investment requirement  Estimated outcome  Potential cooperation mechanism

3. Government Action Plan (GAP) 2012-2016;  “New Development” mid-term targeted program;  New Ulaanbaatar Project envisioning (i) the development of 17 new district complexes, (ii) ger area redevelopment, and (iii) redevelopment of residential buildings failing to conform occupancy standards;  1000 Housing Projects in each Aimag center;  Railway and highway development projects;  New International Airport Development Project in Khushig Valley;  New Airport City Development; and  “Building Material Industry Promotion Program” approved by Government Resolution #171 of 2012

4. Purpose:  Ensure in-country production of construction materials to be procured for the country’s development projects;  Develop rail and road transportation terminals for adequate handling and warehousing of construction materials;  Support domestic manufacturers; and  Develop production capacities in Aimag centers to ensure local supply, whereby reduce Ulaanbaatar-Aimag center material transport demand.

5. Objective:  achievement of a number of objectives set in the national policy documents and GAP: developing free zones, creating trade and economic flow between Asia and Europe, and developing reliable system of construction material supply.  addressing transport logistic issues ensuring access to integrated whole-sale network “ZAMYN-UUD FEZ” “ALTANBULAG FTZ”

6.  Current building price increases due to mismatch between supply and demand for housing and buildings;  Inadequate and insufficient volume, varieties and quality of construction materials;  Need for relocating building material production plants outside of residential and built-up areas of Ulaanbaatar;  Overcome seasonal impact in the construction sector  Respond to recent decision to close quarries operating within 200m area from the river bank (urges to relocate exploration of sand, gravel and crushed stone in some distance from Ulaanbaatar);  Preparation for expected operationalization of cement plants scheduled in 2014-2015 (product warehousing and distribution);  Hauling and storage of imported materials and steel structures.

7. Project scope: Covers overall supply of material and raw material, and transport logistics for the construction sector of Mongolia. Main project components :  Project on “Integrated Supply and Transit Transport Logistics Development for Imported Wood and Timber Products” to be located at Altanbulag FTZ;  Project on “Integrated Supply and Transit Transport Logistics Development for Imported Construction Materials” to be located at Zamyn-Uud FEZ; and  Project on the Development of Integrated Terminals for Construction Material Wholesale and Supply in the east-most and west-most vicinities of Ulaanbaatar City.

8. “EMEELT” WEST TERMINAL ALTANBULAG FTZ “ZAMYN- UUD” FEZ “NALAIKH” EAST TERMINAL

9. MONGOLIA RUSSIA WOOD AND WOODEN MATERIALS IMPORT DISTRIBUTIONS TRANSPORTATION, LOGISTICS IMPORT AND STOCK WOOD IN ALTANBULAG PROCESS, DESICCATE AND MANUFACTURE CENTERALIZED SUPPLY OF RUSSIAN WOOD AND WOODEN MATERIALS SUSTAIN CONSTRUCTION INDUSTRY RESERVE MONGOLIAN FOREST LANDS, FOREST REPRODUCTION Develop in Altanbulag FTZ a complex of timber processing plant and integrated supply chain with a capacity to receive, load, unload, grade, store, sort out, dry cure and transport the timber and wood materials.

10. MONGOLIA, ZAMYN-UUD FEZ IMPORTING COUNTRIES IMPORT OF BUILDING MATERIALS ROAD TRANSPORTATION LOGISTICS “ZAMYN-UUD FEZ”, BORDER POINT, IMPORT TO GUARANTEED CUSTOMS WAREHOUSE TRANSFER FROM CENTRALIZED IMPORTING SUPPLY TO UB SUPPLY DESTRIBUTION TO: MANUFACTURERS CONSTRUCTION COMPANIES NEW DEVELOPMENT ULAANBAATAR CITY, 2013 Integrated supply of construction materials and their transport, transit transport and logistic services by warehousing materials and products in customs bonded area within the FEZ under the international trade and business regime. It is expected to launch the trade and business operations of Zamyn-Uud FEZ.

11. Handle construction materials in a single point using adequate equipment and machinery, warehouse them in suitable condition meeting storage requirements, and provide construction materials delivery services to customers through an integrated supply system.

12. Tianjin border point Erlian harbor city “Zamyn-Ud” FEZ “Altanbulag” FTZ See transportation Border point, transportation logistics Construction material terminals at the east- and west-most vicinities of UB, along the existing main railway line and an envisioned highway – to be serving as “Land Bridge” connecting Altanbulag and Zamyn-Uud BCPs further bridging China-Russia and Europe-Asia. Construction of roads, yards and other infrastructure; and procurement and installation of necessary machinery and equipment (from 4 th Q of 2013 through 1 st Q of 2014); and Combined supply of materials for the development of transport logistic system and primary processing plant for construction materials. (from 4 th Q of 2013 through 1 st Q of 2014).

13. Project initiators - Ministry of Construction and Urban Development - Investors’ Council for Altanbulag FTZ Project implementers - Ministry of Construction and Urban Development - Ministry of Economic Development - Ministry of Roads and Transportation - Governor’s Office of the City of Ulaanbaatar - Investors’ Council for Altanbulag FTZ; and - Administration of Zamyn-Uud FEZ. Stakeholders - Enterprises that own lands and established real estate on the territory where building material terminals will be built. Partners - Ministry of Industry and Agriculture - Ministry of Nature and Green Development - Ministry of Culture, Sports and Tourism - Ministry of Mining - Ministry of Energy - Ministry of Labor

14.  Project on the Development of Integrated Terminals for Construction Material Wholesale and Supply in the east-most and west-most vicinities of Ulaanbaatar City - USD60.7mln (state budget, PPP, and private investment);  Project on “Integrated Supply and Transit Transport Logistics Development for Imported Construction Materials” (Zamyn-Uud FEZ) – USD17mln - investment by the “Mongol 999” Consortium, government funded concessional loans, and foreign and domestic investment; and  Project on “Integrated Supply and Transit Transport Logistics Development for Imported Wood and Timber Products” (Altanbulag FTZ) - USD13.65mln investment by the Investors’ Council for Altanbulag FTZ and “North Gate” Consortium; government funded concessional loans, and foreign and domestic investments.

15. The following results are expected from the Project:  Achieving regular supply of quality raw materials for the construction sector;  Introduction of a new system of supply, transport and logistics in construction sector of Mongolian;  Product cost reduction, cost efficiency, time saving;  Fostering development activities, including urban development projects;  Operationalising Altanbulag and Zamyn-Uud free zones;  Opening up of an international inland port, which is to be centrally positioned for Europe-Asia transnational flow of commodities and finance, with its impact to the Mongolian economy offering a new development gate; and  Business and employment opportunities.

16.  PPP – Public and Private Partnership;  Private Investment (FDI);  JV;  Credit facility provided by Taiwan EXIM Bank; and  Other forms of cooperation

17. THANK YOUR FOR YOUR ATTENTION D.Uuganbayar Finance and Investment Division Ministry of Construction and Urban Development Government Building 12 Barilgachdiin Talbai 3 Ulaanbaatar 15170 Mongolia E-mail: uuganbayar@mcud.gov.mn