Cambodian rice exporter Soma Group is partnering with Thai agricultural firm CP Intertrade, in a $50 million rice mill in Kampong Speu province, the companies announced yesterday.

Construction of the mill is nearly 60 per cent complete and will be fully operational within the first quarter of 2015, with the capacity to produce up to 300,000 tonnes per year, Sok Puthyvuth, chief executive officer of SOMA Group, said.

Puthyvuth, who is also the president of the newly formed Cambodia Rice Federation (CRF), said Soma was partnering with CP Intertrade in order to leverage the Thai firms experience with operating the technology destined for the rice mill, as well as to help open up new markets for Cambodian rice.

“CP already has a big market, so we will place our exports into their channel’s,” he said, adding that the venture will increase volumes to existing markets like China and European Union, while actively seeking new destinations for local rice.

The company did not indicate either party’s stake in the joint venture, but according to Puthyvuth, CP holds a majority share in the deal.

Prasit Damrongchietanon, vice chairman of CP Trading Group, said the new factory was equipped the with close to $20 million worth of the latest rice-production technology from Japan and the US.

“[Cambodia] still has very high potential to increase [production], maybe more than double from what we currently can do. So, the [priority] is how we can quickly bring the right technology to fit the industry’s needs,” he said.

David Van, acting secretary- general of CRF, told the Post that the size of the investment alone will make the new venture a major player in Cambodia’s rice industry. However, there were still challenges for the sector to overcome on it’s way to the governments target of 1 million tones exported by 2015, Van added.

“If the price is smooth like last year, we can export more, but if it fluctuates like it is currently, [the goal] will be difficult to achieve,” he said.