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Logo of Phnom Penh Post newspaper Phnom Penh Post - Koh Kong cane plant packs it in

Koh Kong cane plant packs it in

Flooding at factory site blamed for joint venture's failure

AUS$100 million sugarcane factory that was to begin production in December in Koh Kong province has failed nearly two years after the joint Thai-Cambodian venture was agreed upon, one of its key backers said this week.

Rainy season flooding at the site for the proposed industrial complex is the main reason that the project was abandoned, said Mong Reththy, head of the agro-industry company Mong Reththy Group, which partnered with Thai billionaire Charoen Sirivadhakdi in 2006 to build the factory on 5,000 hectares of land.

"My plan for the factory is now impossible to complete," Mong Reththy, who is also a Cambodian People's Party senator, told reporters on Wednesday.

The project also would have required an additional 5,000 hectares of land from local farmers, Mong Reththy added.

The Mong Reththy Group now plans to turn the land into a palm oil plantation, he said, adding the palm oil project could go forward with future cooperation from Charoen.

The agreement between the two gave the Mong Reththy Group a 51-percent stake in the joint venture, with the balance going to Charoen, who also owns ThaiBev, the maker of Beer Chang.

Mong Reththy told reporters earlier that the factory planned to produce 60,000 tonnes of white sugar, 24,000 tonnes of molasses and 6 million litres of alcohol each year.

MY PLAN FOR THE FACTORY IS NOW

IMPOSSIBLE TO

COMPLETE.

Most of the production was expected to reduce Cambodia's reliance on imported sugar and related products.

The Kingdom spends $70 million each year importing white sugar from Thailand and Vietnam, according to customs figures.

The company has made no announcements about whether it will look for other potential locations.

Thon Sophea, a sugarcane farmer in Kandal province's Korki Thom commune, said he hoped Cambodia would eventually have a large-scale sugar factory.

"I would increase my profits each year if we had a factory," he said, adding that he currently makes about 5 million riels ($1,250) a year from one-half hectare of land.

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