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Logo of Phnom Penh Post newspaper Phnom Penh Post - Rubber group sees rosy future

Rubber group sees rosy future

The Vietnamese Rubber Enterprise Federation includes 17 companies and has invested US$1 billion in growing rubber in Cambodia. The Post talked to Leng Rithy, its president.

Why is Vietnam interested in investing in Cambodian rubber plantations?
Vietnam is interested in growing rubber in Cambodia for several reasons.

First, Cambodia has a lot of potential free land which is suitable for rubber.

Cambodia is also next to Vietnam, which makes communication easy. The two countries have similar weather, and their people also have similar cultures.

How much capital will Vietnam invest and how many hectares of land area will the federation grow rubber on?
We have prepared a total amount of nearly US$1 billion to grow rubber, on a total economic concession land area of 100,000 hectares.

Of this amount, $600 million will be used for plantations, $200 million will be used for building infrastructure in the rubber plantation areas.
The other $200 million will be used for building rubber-processing factories.

How did the Vietnamese Rubber Enterprise Federation get such a large area to grow rubber on?
It was very difficult to find large areas of land to grow rubber on, but we were able to receive such a large area because [the project] has got support from the prime minister of Cambodia, the Ministry of Agriculture, Forestry and Fisheries and local authorities of all levels.

What kind of encouragement did the project receive from the Cambodian government?

Cambodian law gives very broad encouragement to investment.

Under these laws the federation has been facilitated by the Cambodian government to import agricultural materials, fertiliser, and rubber breeds with import tax at zero percent.

When will the project be finished?
At first we planned to finish it by 2015. But because of the support and facilitation we received from the government, the Ministry of Agriculture, Forestry and Fisheries, and local authorities of the provinces in which we are growing rubber – including Preah Vihear, Kampong Thom, Kratie Mondulkiri and Ratanakiri – we have speeded up.

Our plantation is set to be finished by 2012. We planned to grow 10,000 hectares in 2009, 20,000 hectares this year, 30,000 hectares in 2011 and then 40,000 hectares in 2012.

How big will your workforce be?
We plan to employ 40,000 workers. Of those, 30,000 would work on the plantations and the other 10,000 would be employed in the technical work, administrative work and in factories.

These workers are from Prey Veng, Svay Rieng, Kampong Thom, Pursat, Takeo and Kampong Chhnang provinces.

Is it difficult to recruit a large number of workers?
At first, it was very difficult for us to recruit workers because most of them did not trust our investment very much.

But now, seeing our achievements, many people who used to migrate to work elsewhere have been returning home to grow rubber for us.

So far, the federation has been building houses to provide accommodation to workers at the base of each plantation.

Moreover, we are building schools and health-care centres to provide health-care services.

Workers who came here first saw that their lifestyle was improved and have been persuading their relatives to come to work for us more and more.

Besides growing rubber, does the federation have plans to do anything else?
We plan to build two big rubber-processing factories in Kampong Thom and Kratie provinces in late 2011.

We will equip the two factories with modern facilities and high-tech systems to produce international-standard-quality rubber.

Moreover, we plan to choose a place in one of the two provinces to use as location for us to transform rubber into finished products such as car tyres, medical tools, condoms and gloves.

We will complete all these projects by 2016 and in 2017 the federation will start to harvest resin.

How much rubber does the federation expect to produce per year?
We expect to get 20,000 tonnes of rubber in 2015, and the output will increase up to as much as 200,000 tonnes by 2018 when all rubber we have grown will yield.

We believe our estimation will not be wrong because the rubber breeds we have chosen to grow in Cambodia are the best ones, which will yield at least 2 tonnes per hectare.

What do you think of the investment environment here?
Vietnam dares to invest as much as $1 billion to grow rubber like this because we found that the Cambodian government has been giving priority and paying a lot of attention to the agro-industrial sector, which provides a good opportunity for all investors in general.

In the name of investment, we must be aware of and able to take hold of opportunities for investing, especially in such circumstances, because a quick decision can also bring us more benefits.

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