Logo of Phnom Penh Post newspaper Phnom Penh Post - Battambang on course for growth

Battambang on course for growth

A woman packages rice at a production factory in Battambang province earlier this month.
A woman packages rice at a production factory in Battambang province earlier this month. Heng Chivoan

Battambang on course for growth

Battambang, the city at the epicentre of Cambodia’s agricultural heartland, has long struggled to reward its farmers with profits and compete in global markets. However, new logistics and economic development projects are driving a positive transformation that could see the city develop into a regional agro-industrial hub.

Phou Puy, president of the Battambang Chamber of Commerce, said logistics challenges have weighed heavily on local production costs and sapped the competitiveness of agricultural exports, including rice, cassava and maize.

“With limited transportation capacity, we are unable to develop our agricultural production and cannot compete with international markets because our transport fees greatly increase the cost of production,” he said.

Puy said despite the potential improvements they would offer, the province’s river and rail transport networks remain virtually inoperable. Currently the only means to get agricultural products from the province’s fields to local processing facilities and on to international border crossings and ports is through a network of poorly maintained roads – and with no direct access to the coast.

Nhiev Kol, general manager of logistics firm CMA CGM Cambodia, said that despite low farm-gate prices, transport costs add a heavy burden to the export competitiveness of Battambang’s agricultural products.

“Logistics costs are still high, and this prevents our agricultural products from competing in international markets,” he said, adding that due to better logistics infrastructure exporters in Thailand and Vietnam can offer cassava for $200 less per container than Cambodian producers.

“If cassava cannot be delivered to international ports cheaply it opens the door to cross-border smuggling, which reduces the value of our products,” he said.

According to Puy, recent investments in transportation infrastructure, such as Japanese government-funded upgrades to National Road 5, are helping to lower transport times and costs. They should also attract much-needed investment into agricultural processing facilities.

“An improved agricultural industry will guarantee better market access and value to the region’s farmers and, most importantly, will add value to our products by processing them here,” he said.

However, he said the government needs to sweeten the investment climate by offering potential investors tax exemptions or special concessions for large-scale agro-industrial projects.

“The government should promote the region to investors with tax exemptions and economic land concessions (ELCs) in order to accelerate economic growth in this remote region,” he said.

Ngoun Ratanak, deputy governor of Battambang province, said the government is implementing a 20-year master plan aimed at improving logistics and agricultural industry.

The 2010-2030 economic development plan aims at transforming Battambang into a regional hub for agro-industry, with products processed and given added value locally before being shipped to international markets.

“Battambang province will become a centre for commercial trade and agro-industry, according to the goals of the government’s master plan,” he said.

Ratanak said transportation improvements were crucial to the plan’s success.

As such, the government has commenced rehabilitation of the northern railway line, which connects Phnom Penh to Poipet via Battambang, after the project was abandoned by the Asian Development Bank.

It has also signed off on a project to build a direct road link from National Road 5 in neighbouring Pursat province to the coast, obviating the need for trucks leaving Battambang to travel to Phnom Penh on their way to Sihanoukville’s deepsea port.

“We are currently developing the infrastructure to create a shorter route that will reduce transportation costs,” Ratanak said.

MOST VIEWED

  • Construction begins on $1.5B Kampot seaport

    The International Multi-Purpose Logistics and Port Centre, principally invested by Kampot Logistics and Port Co Ltd and projected to cost $1.5 billion, has officially broken ground in Bokor town, Kampot province. The multi-purpose logistics and port centre, located in Prek Tnaot commune, will be built on

  • Cambodia eyes key role in electronics, auto hubs in SEA

    Two roadmaps, part of the LDC’s economic diversification plan, were designed to see it through its migration process, but experts say the journey might be arduous, particularly in the presence of two established hubs in the region By 2028, Cambodia hopes to have exited the

  • Hun Neng, lawmaker and PM’s brother, passes away aged 72

    Hun Neng, chairman of the 4th Commission of the National Assembly, has passed away from heart disease at the age of 72 on the afternoon of May 5, according to the Ministry of Information. Hun Neng is the older brother of Prime Minister Hun Sen, and was

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • PM meets with US business giants

    Prime Minister Hun Sen has met with a number of major US companies who have expressed interest in investing in Cambodia, in a meeting convened by the US-ASEAN Business Council (US-ABC). A delegation of companies – including Amazon, Meta, Chevron, ConocoPhillips, ExxonMobil, Ford, Visa and Pernod

  • CCC team off on US business trip

    The Kingdom’s leading economists and private sector representatives have called on the US to renew its tax preferential status for Cambodian exports, as a Cambodia Chamber of Commerce (CCC) delegation departed for a weeklong business visit to the US, where they will meet with