SOMA Group forms China rice mill partnership
Cambodian consortium SOMA Group has partnered with a Chinese firm to build a rice mill in the Kingdom, according to SOMA Group project manager Poeuv Bunrith.
Construction of the mill will begin following the rainy season, with China’s Yunnan Provincial Overseas Investment Company aiming to eventually process up to 200,000 tonnes of rice per year for export to China and other international markets.
“The plant will probably be built in Takeo province, where it produces lots of rice each year, and is easy for us to collect,” he said yesterday.
The finer points of the joint venture are still being discussed, Poeuv Bunrith claimed, as he declined to reveal the cost of the project.
The joint venture parallels an agreement between Cambodia and China offering a large quota for rice exports, he said.
“We want complete this project because we want to follow policies from both countries to export more rice to China,” he said Cambodia’s largest rice exporters yesterday welcomed the agreement to create another rice mill.
Loran Import-Export Company President Lim Bun Heng said additional rice mills would increase the prestige of Cambodia’s rice, and would allow the staple crop to be milled locally instead of in Vietnam.
Growing demand from European markets, natural disasters and drought in rice producing countries has led to rice exports doubling in the first four months of the year, according to Ministry of Commerce officials.
Cambodia’s total rice exports reached 42,669 tonnes worth US$24,437,959 from January to April 2011, compared to 21,322 tonnes worth $12,178,797 in the same period last year.
“Demand is picking up throughout European countries because we now export directly, whereas before we just sold crops to neighbouring countries which processed for export,” said the ministry’s Director of Statistics Kong Putheara yesterday.
“Some countries, such as China experienced droughts recently, but we have not, and that’s why we need to supply more,” he said. “I think China will require more rice from us this year.”
He also highlighted growing opportunity in Europe from Cambodia’s status as a Least Developed Country.
Cambodia’s exports to the European Union do not pay tax, which provides its rice shipments with savings of about $150 per tonne, Kong Putheara added.
“You can export freely without limitation on quota,” he said.
However, many local producers still do not meet international standards of quality required by European buyers.
“We have not met our clients’ needs yet, but if we achieve this, we can sell at much higher prices.”
In the first quarter of the year, Prey Veng province rice miller Khmer Foods transported 7,180 tonnes to Europe, Managing Director Kim Savuth told The Post.
“The increase was due to a surge in demand on the global market, caused by natural disaster which affected many other agricultural producing countries,” he said.
He attributed the growth to the duty-free export of agricultural products within the European market, stating: “The EU [regulations] helps us export our crops.”
Khmer Foods plan to export an estimated 20,000 tonnes of rice to the EU this year.
The significance of Cambodia’s access to a global duty free market was also highlighted by Lim Bun Heng, Director General of Loran Import-Export Company, whose exports have also increased in the first quarter.
“Duty-free exports on the global market are a main factor for export growth, along with encouragement from the government and relevant institutions.”
He added that the company planned to export 40,000 tonnes in 2011, highlighting the EU as the major market, as well as considering China, USA and the Philippines.
Cambodian government officials have targeted 1 million tonnes of rice exports by 2015.