MH Bio-Energy Group’s bio-ethanol plant in Kandal province will have a daily production capacity of 130-300 tons.
A South Korean company is investing $30 million in what it says will be Cambodia’s first bio-ethanol plant, which will produce the fuel for export.
The plant will open in October on an 11-hectare site fronting National Road 5 in Ponhea Leu district, Kandal province, said the director of MH Bio-Energy Group, Lee Dong Jun.
“It is Cambodia’s first ever bio-ethanol plant,” Lee told the Post on July 21, adding that the fossil fuel substitute would be exported to Europe, South Korea and Japan.
He said the company had decided to invest in Cambodia because it had cheap and abundant supplies of cassava, or tapioca, for producing ethanol, which is blended with petrol at a ratio of ten percent to 90 percent to produce bio-ethanol for vehicles.
“It can reduce polluting emissions,” he said.
Up to 50,000 hectares of cassava will be needed to supply the plant, which will have a daily production capacity of 130 kiloliters to 300 kiloliters, or 130 tons to 300 tons, Lee said.
The company had begun a three-month production trial ahead of the plant’s launch in October and was relying on cassava bought from farmers in Kampong Cham and Battambang provinces, he said.
Lee said the company was paying the farmers between $130 and $180 a ton, but the price was expected to rise because the plant had created extra demand for cassava, which is mainly grown for export to Thailand and Vietnam.
To ensure adequate supplies, Lee said the company was also planting cassava on 8,000 hectares of land it owns in Kampong Speu province, where it employs about 10,000 people.
He said conditions in Cambodia were favorable for growing cassava and it generated better profits than rice or maize.
The yield ranged from 40 tons a hectare in Battambang and Kampong Cham to 10 tons a hectare in Kampong Speu.
Chan Tong Yves, secretary of state for the Ministry of Agriculture, Forestry and Fisheries, said Cambodia harvested more than one million tons of tapioca a year, but exports to Thailand and Vietnam meant production would need to be increased to ensure adequate supply for the plant.
“Therefore, the ministry is encouraging more farmers to grow it,” Chan Tong Yves said.