Though the Cambodian government is vowing to export at least one million tonnes of milled rice by 2015, businesses are finding it difficult to compete with better-established regional processors, while some are still sending unprocessed, paddy rice stock to neighbouring countries in defiance of a longstanding ban. The Post’s Rann Reuy sat down with a newcomer to milled rice, Tauch Tepich, CEO of the Svay Rieng province-based Tauch Tepich Import Export Co Ltd, to discuss Cambodia’s transition from a dependant to independent rice miller.
Why did you set up a rice mill here?
At first, we bought paddy rice from farmers and sold directly for small traders at the border. During the trading, for a long time, we were lucky to know some big Vietnamese companies and millers, and then we hired Vietnamese millers for processing. After all that, then we exported. From our experience with the Vietnamese, we got the idea to construct our own mill.
How long have you worked in the rice sector?
Since 2000, we started with small-scale trading to buy paddy rice. Then in 2011, we established the mill so we could export milled rice. And this year, we finalised construction and started to buy paddy for processing and export.
What was your overhead like?
Including building and machinery, we spent about $2 million. Some of our money was combined with loans for this investment.
Why did you throw down such a large investment, and what kinds of costs are associated with the mill during operations?
Cambodian milled fragrant rice is very profitable. But the paddy costs $400 per tonne. What we are facing is a lack of capital to buy paddy from farmers, because for just 1,000 tonnes, we need to spend $400,000. Making long-grain rice is cheaper, but then we will have trouble competing with neighbouring countries.
Why do you think it is difficult to persuade other markets to believe in Cambodian rice?
There are some difficulties. First, these countries have years of export experience in this sector, so they already have their own markets. Secondly, we just started to export milled rice, but we have little capital. It is hard to compete for markets with experienced countries that can rely on large capital. We need to have our own brand for promotion purposes.
According to a recent report on milled rice exports, 46 countries accepted our rice. Vietnam and Thailand, however, weren’t on the list. Do these countries influence the rice sector?
Yes, they do. They buy our paddy rice in time for the harvest. Then they commence processing for their clients. Another important thing is that they have large warehouses, which are able to stock several hundreds of thousands of tonnes. Their exports are more frequent than ours. For us, we sign contracts before buying paddy. So, there are a lot of risks for us.
This interview has been edited for length and clarity