Surrounded by some 20 children at newly-completed houses in Keo Phos, Sihanoukville’s Stung Hav district, Mong Reththy – the country’s leading agricultural tycoon – surveys the empire he has built on more than 5,000 hectares of his economic land concession (ELC).
On his ELC, where green forest and wildlife are protected and trees have been planted, the tycoon has ventured into nearly every type of agriculture-related business.
“My agricultural investment includes 2,500 hectares of rubber plantation, palm oil farm, pig farm, fish farm, organic vegetable farm, rice paddy farm, a recently-created pepper farm, and a cow farm which will be undertaken later after completing a deal with a Japanese [partner],” said the 61-year-old businessman as he went to meet villagers and oversee the work on his ELC that borders the Cambodian coast.
While large farms with the proper infrastructure and manufacturing facilities have sprouted up on his land, the tycoon was quick to note that the development of his ELC has been undertaken with a long-term vision.
“Despite roads not being fully complete, I have already planned for future developments to avoid infrastructure difficulties. I plan for 100 years ahead. If I cared only about my rubber plantation, I would not invest in anything else,” he said.
According to him, his ELC supports about 10,000 jobs.
“Here, people depend on me. Without me they would face difficulties. The number of employees here has increased to 10,000 people from just 10 people [nearly twenty years ago]. Most of them – more than 90 percent – are migrants from different provinces.”
Defending his long-term strategy, Reththy touted his philanthropic side. According to him, he has built schools for the children of both migrant workers and local villagers, providing free education, as well as building a pagoda for religious worship, and a free-of-charge health center.
Besides providing a wealth of jobs, his ELC aims to attract international investment partners to help develop his land into a fully functioning coastal enclave.
Speaking to a group of delegates from Thailand’s Pig Raisers Association who had ventured over to survey the investment potential on his land, he highlighted the benefit of regional partnership.
However, despite the potential his land holds and the wealth he has amassed within the agricultural industry, business has struggled with the drop in global commodity prices, especially in regards to palm oil and natural rubber over the last five years.
Meanwhile, his pig farm has been subjected to increased competition from regional imports slashing his margins.
According to international reports, the price for rubber has fallen by 70 per cent since 2011, while trading on the Tokyo Commodity Exchange showed prices at just over $1 per kilogram at the start of this year, down from an all-time high of $5 in 2011.
Palm oil has also fallen dramatically over the years, although analysts are confident as concerns of El Nino affecting production shows a better than anticipated price for 2016 – the first rise in five years. The forecasted price for 2016 stands at $548.23 per tonne, up 5.5 per cent compared to last year.
Despite these challenges, the tycoon, while aware of the ups and downs of market prices, stated that it would be unwise for him to shift away from certain commodities produced on his land for short-term gains.
“I would never plan to cut down the rubber trees, or halt rubber tapping either. In June of this year, we will launch our own rubber processing plant. We must be patient. If we cut down the rubber trees when the price is low, it takes about five years to recover before new trees can be tapped,” he said.
“For palm oil, I will not give up either. When the price rises, it will be good. So we must wait and struggle through.”
Asked for his prediction of where the Kingdom’s agriculture sector could possibly bear the best fruit, he believed that maize and rice are the safest bets. However, to protect both large and small farmers in the Kingdom, the tycoon called on the government’s support to provide technical knowhow, as well as financial support, to protect agriculture from any potential collapse—a strategy he said he has learned of from his Thai counterparts after the delegation left.
“It is good to learn from what the Thais told me. They said their government provides technical assistance for farmers while their associations do whatever they can to protect farmers from bankruptcy. I also have the same desire, but I don’t believe [our government] is on the same track as they are.”