Manoj Varma (L) a shareholder in Long Frain Fusion which owns Long Grain Co Ltd, seated alongside Sanjay Dhir, chairman of Long Grain Fusion. Photograph: Stuart Alan Becker/Phnom Penh Post
When London-based real estate investor Sanjay Dhir heard about Cambodia from his Indian partner Manoj Varma, he took a trip here in October 2010 and stopped by the roadside to meet the operators of a portable rice mill.
He knew then that Cambodia was ready for new rice mills. After working with his partners for the last year and a half, Long Grain Co Ltd announced the deal last week for a $20 million investment in a new rice mill in the Oddong district, about 40 kilometres from Phnom Penh.
“When you have been through many crises in various countries, trends and fashion changes, you learn one thing: people have got to eat,” Dhir said. “On the remaining two and a half hour journey after talking to the owners of the portable rice mill I was trying to understand more about the country, the rice, how many mills and very quickly realised there was a huge opportunity for many, many more rice mills,” he said.
According to the same principles that he and his partner Manoj Varma use when investing in real estate developments in India through a company called Fusion Real Estate Investments of Mauritius, the key is finding good local partners to work with.
In this case, they found Sean Ngu, CEO of EMAXX Telecom, who is one of several shareholders in Long Grain Fusion, the Singapore company that owns the Cambodian company Long Grain Co Ltd. Dhir serves as the Chairman of Long Grain Fusion: the majority shareholder is his own family.
In the $20 million phase one of the project, Japanese rice milling equipment under the brand name Satake will arrive in October, following completion of the building at the end of September for a projected start of operations on January 25 next year, on Dhir’s 40th birthday.
“There’s been an awful lot to do, identifying the site, filling the site, raising it by two metres, and working with a good builder for excavation and foundations,” Dhir said.
With regard to the January opening of the plant, Dhir says the paddy can be acquired and stored prior to milling.
“Because we have not done any debt finance, we’re not under pressure from any investors as to when and how to operate. The very reason we’ve taken no investment on board is that we can operate without pressure and we can build to the highest quality, highest standards, and look after our staff, look after our farmers.”
Dhir says the objective is to put Cambodian rice on the world stage as high quality and very desirable.
“I don’t believe people who say Cambodian rice is not high quality. If you use the right machinery, take the right care, and put in the right investment, there is no reason why you cannot have an international standard product coming out of Cambodia.”
Neither is he concerned about competitive rice mills: he welcomes them.
“Lots of people ask me if we’re concerned about more mills. I consider more mills an asset, not a threat, because they can contribute to putting high quality Cambodian rice on the world stage as a high quality product which will make it easier for all of us to trade.”
Dhir says it is important to work with the community and treat farmers and associates as part of the family.
“It is very important to me that everybody in that value chain is well taken care of and looked after because if it is not the whole value chain collapses and there’s no rice to sell. The people are the most valuable aspect of the business.”
Dhir intends to provide education and health programs for farmers, rice mill workers and their children. “The country has welcomed us, and with that goes responsibility,” he said.
Born into an Indian family in Leeds, England, Dhir said he was told he would never amount to anything at the age of 13. He keeps a home in the Knightsbridge district of London and travels to India and Cambodia.
His Fusion Real Estate Investments Company and other ventures have combined investments of more than $400 million, with business models including the acquisition of land and joint venture developments with carefully chosen local partners.
“We’ve come quietly, and we’re now saying what we are doing. Now that the foundations have been built, we’re now announcing our arrival. We didn’t want to be another investment tourist, he said. “We joint venture with local developers. The key is to work with good local partners. We believe that having the right local partners is the key.”
To contact the reporter on this story: Stuart Alan Becker at [email protected]