The consolidation of Mongolia’s film industry during the 1930s was achieved through the construction of a cinema and a film making studio in the capital city, which had been renamed Ulaanbaatar in the 1920s. In 1934 Minister of People’s Enlightenment Erdenebatkhan traveled to France, Germany, Italy, the UK and the USSR to observe the film industries of these countries. He returned with four semi-stationary pieces of “Jack” equipment acquired from Germany. The first permanent cinema in the country was acquired when a broker’s building was purchased and renovated for the cost of MNT 40,000. It was officially opened as the Ard Cinema in 1935.

In 1934 and 1935 a delegation from the USSR, led by cinematographer S.E. Gusev, visited Mongolia twice to study the equipment and materials needed to build a film production center in the country. By late 1935 a National Film Industry body was established by a resolution signed by the most important politicians of the day. These included Prime Minister Genden, First Deputy Minister Choibalsan, Second Deputy Minister Demid and MPRP Secretary Ulzii-Ochir. A keynote speech on the National Film Industry was given by Minister of Foreign Affairs, N.Gonjoon to the Mongolian parliament. An outcome of the 1935 resolution was the acquisition of a two-store building (now the State Philharmonic Hall) and its renovation to become a film production center. It was to be occupied by the Mongolkino studio, whose newly appointed artists could now start to be trained.

By 1937 Mongolkino had nearly 40 employees and several cars. Technical advances were made through the use of imported cinematographic equipment such as the Debriel, Aimo, and Tanar from France and Germany. The first employee was a cinematographer, and a number of famous Mongolian filmmakers – B. Demberel, S. Demberel, D. Ganjuur, and D. Jigjid – began their careers making film-chronicles or documentaries here. A new laboratory began processing film positives in advance of a series of silent films commemorating public holidays including May Day, National Day, and the anniversary of the October Revolution.