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Logo of Phnom Penh Post newspaper Phnom Penh Post - Proposed rice storage facility to boost capacity

Farmers prepare to plant rice seedlings in Kampot province in 2015.
Farmers prepare to plant rice seedlings in Kampot province in 2015. Pha Lina

Proposed rice storage facility to boost capacity

A proposal for a massive warehouse and silo that has attracted two Chinese investors aims to fill the Kingdom’s conspicuous gap in paddy rice storage capacity, which still falls 60 percent short of the level needed for the country to achieve its goal of 1 million tonnes of annual rice exports.

Private Chinese firms Jilin Province Investment Group Co Ltd and Jilin Tianzhong Agriculture Development Co Ltd signed a memorandum of understanding on Thursday with local conglomerate Soma Group to build a “huge” storage facility to serve Cambodia’s rice producers.

According to Hun Lak, vice president of the Cambodia Rice Federation, the companies will conduct a feasibility study to determine the location and investment size of the initial storage complex, with Battambang and Takeo provinces favoured. Additional storage facilities could be developed in other areas, he said.

Lak said the Chinese investment would be substantial and would help fill the rice sector’s gap in storage capacity.

“It will help to narrow down the rice industry’s gap in storage facilities, which is necessary if it is to reach the goal of 1 million tonnes of rice exports,” he said yesterday, estimating that the country has just 40 percent of the storage capacity needed to realise Prime Minister Hun Sen’s export target of 1 million tonnes of milled rice a year.

“Even now that we have some huge rice storage warehouses and silos we still need more investment in these facilities to fill the gap,” he said.

Cambodia exported 530,000 tonnes of milled rice last year, with mills running production for about six months of the year before using up their stores.

Phou Puy, CEO of Thaneakea Srov (Kampuchea) Plc, which operates the country’s first large-scale “rice bank” storage facility, said the new Chinese investment could allow local millers to operate year-round.

“We welcome any new investment in rice storage warehouses and silos as our rice industry still need more capacity in order for mills to run full production for the entire year,” he said.

Thaneakea Srov’s storage warehouse in Battambang province has a storage capacity of around 40,000 tonnes, while the company is building a 200,000 tonne facility due for completion next year. Yet, even this will still fall short of the country’s needs.

“Currently, our capacity can only handle the [paddy rice of] western Cambodian producers,” he said.

“We will need more warehouses and silos to handle the rest of the country’s production.”

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