Socfin Cambodia, the local branch of a Europe-based international rubber producing company that currently operates a 7,500-hectare rubber plantation in Mondulkiri, has announced plans to open the doors to its first rubber factory next April, with an initial investment of $5.7 million, a company executive said last week.
Jef Boedt, general manager of Socfin Cambodia, said that since the company launched its rubber plantation in 2009, approximately 2,000 hectares of rubber have become harvestable, making it economically reasonable for Socfin to open its own processing factory.
“When we open our own local factory, we will save costs and become more profitable,” he said, adding that this latest project is in keeping with the company’s plan to foster long-term investment in the Kingdom. “Our goal from the start was always to open a factory eventually, and we have now reached that goal and continue to improve our operations here in Cambodia.”
Socfin Cambodia currently employs 630 people and has invested $88 million in its Cambodian operations over the past decade.
According to Boedt, once the factory is operational it will have the capacity to produce 25 tonnes of dry rubber per day, or approximately 8,000 tonnes per year. He added that the company has not yet decided whether it will sell the rubber it produces directly to the international market or if it will continue selling through local traders.
International rubber prices have risen year-on-year, and Boedt said that he believes that trend will continue in 2018. “The probability that the price will go up is higher than the probability that the price will go down,” he said.
Lim Heng, deputy director of rubber exporter An Mady Group, said plantations with more than 1,000 hectares of rubber available for harvest are likely to invest in opening their own factory to process their product.
He added that such investments in factories demonstrate a long-term commitment to the sector that would hopefully benefit family farmers, but he also lamented the limited processing capacity of most Cambodian rubber factories.
“I wish Cambodia had a factory to process rubber into final products, like tyres for vehicles,” he said. “China is the world’s biggest producer of rubber in the world, and I hope that a Chinese company that knows how to create final product like a car tyre will set up a factory in our country soon.”
According to data from the Ministry of Agriculture, Cambodia exported over 150,000 tonnes of rubber in the first 11 months of the year, amounting to total revenue of $249 million.
