C AMBODIAN rubber companies are rushing to foreign investors to bring the industry back from "ruin" as the government moves toward privatizing parts of it.

"Everything is in ruin - poor factories, poor quality," was the conclusion of Teng Lor, Director of the government's General Department of Rubber Plantations.

The government recently took the first step toward opening up the industry by allowing Cambodian rubber factories to export directly, but only with the cooperation of the Ministry of Agriculture.

Previously, one government firm had the monopoly on exporting rubber products.

Second Prime Minister Hun Sen has said the government intends to lease rubber plantations to foreign firms to introduce competition and better quality.

The department's operations officer, Chea Song, said the biggest obstacle to foreign investment was the inadequate land ownership laws in Cambodia and Khmer Rouge security problems in many rubber growing areas.

Of the 20 foreign firms which had expressed interest in investing, only two French companies had applied to the government.

One company's proposal had been turned down because it wanted the government to put up 50 per cent of the capital investment.

Teng Lor said the rubber industry had suffered severely from inadequate funding, mismanagement and corruption.

When the industry had been a government monopoly, the Ministry of Finance had handed over money for buying equipment and materials for rubber factories, but not checked how it was spent.

Much of the money went into the pockets of factory officers, rather than being used for the purpose it was given.

Factories and plantations damaged by war, meanwhile, had often not been repaired or replaced.

There had been poor productivity, and low wages had led to workers pilfering raw and processed rubber.

The quality of Cambodian rubber had dropped considerably because of the damage caused by the Khmer Rouge's 1975-79 regime, and the industry suffered heavily from the loss of its key official market, the Eastern bloc, from 1991.

The industry needed "new techniques, good management and the replanting of rubber trees", Teng Lor said.

"Investment is required soon. We need to improve our products in order to compete on the international markets."

A staff member of a rubber firm in Snoul in Kratie province told the Post that poor management, staff looting and problems with the Khmer Rouge were still common.

Company bosses warned the staff not to steal the latex products the factory made, but stole them themselves, he said.

"We are poor. We have to steal the latex, it is for our survival."