CP Group Cambodia Co Ltd announced Wednesday it would buy US$30 million in grain as part of a plan to expand animal feed production by 20 percent on last year.
Wittaya Kreangkriwit, vice president of CP Group Cambodia Co Ltd, cited the rising price of unprocessed grains as another reason for the company’s increased expenditure, a significant rise on 2009 when the company spent US$19 million.
“This year, our expenses on agricultural products – which are the raw materials we use to produce animal feed – will increase by 57.89 percent compared to last year,” he said. “We hope that the company will be able to buy enough grain to fulfil its production demand.”
The company plans to purchase a total of 106,500 tonnes of grain, including 100,000 tonnes of red corn, 5,000 tonnes of cassava and 1,500 tonnes of soybeans between March and May this year, said Wittaya, and will source the grains from Kampong Cham and Pailin provinces.
The company estimated all three of the main raw materials used to produce animal feed would increase in price, he added, with red corn likely to rise by 33 percent to 1,100 riels per kilogram (US$0.27), cassava by 53 percent to 850 riels per kilogram and soybeans by 26.7 percent to 2,400 riels per kilogram.
In total, the company plans to raise production of animal feed this year to 144,000 tonnes, which would be 24,000 tonnes more than output in 2009.
Wittaya told the Post this month that CP plans to raise the price of its product more than 8 percent this year from $460 a tonne in 2009 to $500 to compensate for higher costs
The firm's revenue target is $72 million for 2010, he added.