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Logo of Phnom Penh Post newspaper Phnom Penh Post - New fertiliser factory to target local market

New fertiliser factory to target local market

Taiwan Fertiliser Company, a Taiwanese manufacturer and seller of fertilisers and chemical products, intends to build a fertiliser factory in Preah Sihanouk province to supply the local market, a company representative said yesterday.

Weikai Chen, head of the trading department at Taiwan Fertiliser, told the Post by phone yesterday that the company plans to set up a production unit in a special economic zone near Sihanoukville.

The factory would be built in phases, though he declined to reveal the total investment or confirm a figure of $100 million cited by state press agency AKP.

“It’s too early to reveal the capital to be used,” he said. “For the first phase, we won’t invest a big amount. Instead, we will do some promotion and gradually if we think the market reaches a certain level, we will start constructing the factory.”

The early stages of the project will only see the construction of a warehouse, for which the groundbreaking was done last week, and in two to three years, Chen said, the company will consider building a factory.

“Total capacity for the plant initially will be 90,000 tonnes per year of compound fertiliser and we will increase it gradually,” he said.

Chen said there was big potential in Cambodia’s agricultural sector, as many farmers have limited knowledge of fertilisers and were not using them on their fields. But he expected usage to increase as has happened in other Asian countries, such as Japan, Taiwan and China.

“If we can import materials into Cambodia to produce fertiliser we will be more competitive, because shipping raw material is cheaper than to ship final products,” he said, talking about the potential of Taiwan Fertiliser to compete with the existing players in the market.

Some 20 private firms compete in Cambodia’s fertiliser market, which is dominated by Thai and Vietnamese imports.

Chhaya John, CEO and marketing director of Vietnamese-owned Five Star International Fertiliser Company, said that the new investment will increase competition in the sector, but he was confident about growing his company’s market share.

Five Star’s factory in Kandal province currently has capacity to supply around 35 per cent of the total market and will scale up in two years to cover 50 per cent of the market, he said.

“We have capacity to produce 350,000 tonnes of fertiliser per year, but we only produce 160,000 tonnes, of which 140,000 tonnes is sold,” John said, adding the Cambodian market demand was around 600,000 tonnes annually.

Yang Saing Koma, president of agricultural organisation CEDAC, said that competition in the market will help improve the quality and bring down the price of fertilisers.

Local investors and the government, he said, should also take up this opportunity to invest in the sector.

“There are many materials we can find in the country to produce fertiliser and they should not wait for foreigners to come and use local materials to support farmers,” he added.

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