SOMA Group CEO Sok Puthyvuth (2nd L) and Sumeth Laomraphorn (R), a representative of CP Intertrade, sign an MoU on rice milling in Phnom Penh, Wednesday, Jan. 23, 2013. Photograph: Hong Menea/Phnom Penh Post
Cambodian company Soma Group has signed a joint-venture agreement with Thai-based CP Intertrade to build and operate a $20 million rice mill that will process fragrant rice for export.
Industry insiders say the mill will increase Cambodia’s rice export capacity and boost the Kingdom’s ability to produce quality rice for the international market.
The memorandum of understanding (MoU) was signed by Soma Group chief executive Sok Puthyvuth, the son of Deputy Prime Minister Sok An, and Sumeth Laomoranphorn, a representative of CP Intertrade, an agricultural distribution company in Bangkok.
According to a statement, the mill will be established later this year.
“We will focus on the export of fragrant rice, as we realise Cambodia has a large potential to benefit from fragrant rice exports,” Puthyvuth said.
“This investment will enhance Cambodia’s rice-export competitiveness and lead to a good reputation for Cambodian rice on the global market.”
The factory will be built in Kampong Speu province with a total investment of $20 million, according to the statement, which did not indicate either party’s stake in the venture or the production capacity of the factory.
Kim Savuth, president of the Federation of Cambodian Rice Exporters,welcomed the new-comer and said the investment was a smart move.
“Even though it’s not problem of quality, it’s very difficult to compete with Vietnam in terms of price,” Kim Savuth told the Post yesterday.
“The quality and price of Cambodian fragrant rice can be competitive with our neighbouring countries.”
Srey Chanthy, an independent agricultural analyst, also welcomed the investment in fragrant-rice milling, which he hopes will reduce informal exports of unprocessed fragrant paddy and encourage more farmers to plant the more profitable fragrant rice.
“Cambodian farmers produce enough paddy for rice millers, so I don’t think there is any problem with paddy supply,” Chanthy said.
Thailand and Vietnam are two of the world largest rice exporters. Although Thailand was third in terms of milled-rice exports last year, it is well established in fragrant-rice exports. Vietnam, on the otherhand, was the world’s second-largest exporter of milled rice last year, but focuses on exporting ordinary rice.
Puthyvuth said that when the international market wanted to buy rice, it thought of Vietnam for ordinary rice and Thailand for fragrant rice, which was not good for Cambodia.
“We have a good location to produce fragrant rice, so we should do more to specialise in the export of fragrant rice and promote Cambodian farming of fragrant paddy,” Puthyvuh said at the signing ceremony.
“The quality of our fragrant rice is truly competitive.”