Logo of Phnom Penh Post newspaper Phnom Penh Post - Inside Business: Juice maker struggles to turn healthy profit

Inside Business: Juice maker struggles to turn healthy profit

Inside Business: Juice maker struggles to turn healthy profit

090527_24.jpg
090527_24.jpg

Photo by:

Souen Say

The Khmer Mekong Foods processing

factory in Phnom Penh.

PICH Chan, general manager of Khmer Mekong Food Enterprise, walked into a supermarket in Phnom Penh in 2003, and he was dismayed.

He counted 90 different products that had been imported from neighbouring countries that could have been made in Cambodia.

"I wanted to see a Khmer product at markets," he said. "My friends and my relatives said my juice was good, so I started to think about producing juice for the market."

In late 2005, Pich Chan invested US$40,000 in a fruit-juice processing enterprise, and now four years later, his business produces juice from mangoes, pineapples, tamarind and guavas.

With eight workers, Khmer Mekong Foods is a small business only producing about 50 cases of juice a day. A case, which holds 24 bottles, is sold to retailers for $7, according to Hok Sovanna, Khmer Mekong Food's marketing manager.

But Hok Sovanna says Cambodians are starting to acquire a taste for fruit juice after initially shunning it.

"Now Cambodians have started to accept its flavour with up to 80 percent natural fruit," he said.

But despite increasingly positive feedback about the product, in 2007, Khmer Mekong Food lost $60,000.

Pich Chan blames the losses on his own lack of marketing expertise.

"I only have skills at producing not at selling, that's why poor marketing is our weak point" he said.

Also, as a small enterprise, Pich Chan says it has been impossible for his company to break into the international market because he cannot produce enough bottles to fill a shipping container, which is necessary to supply countries like the United Arab Emirates, Canada and the United States.

"I was sad to hear that they need one big container per month. I regret that I could not meet their demands," he said, adding many other Khmer agricultural products face the same limitations.

In the next one to two years, Pich Chan hopes to expand his company so he will be able to export his product overseas.

But the economic crisis has hit his company hard. Since late 2008, sales have dropped between 30 and 40 percent from the same period last year. Nevertheless, Pich Chan says that by continuing to improve the quality of his juices and diversifying his product line he will be able to increase Khmer Mekong Foods' market share in Cambodia.

In order for him to follow through with his expansion plan, however, Pich Chan says the company will need to borrow money. But, he says, Cambodian interest rates are too high at up to 12 percent per year.

"There are a lot of things to produce, but I don't have the capital. I need to find which bank has a low [interest] rate," he said.

Pich Chan said that he wished Cambodia had a bank with an especially low rate for small and medium-sized enterprises.

"I need a chance to borrow money to improve my business," he said.

Inside Business is a new section every Wednesday that will profile Cambodian small and medium-sized enterprises.

MOST VIEWED

  • Prince injured, wife dies after accident

    THE wife of former First Prime Minister Prince Norodom Ranariddh, Ouk Phalla, 39, died while the prince was “severely” injured following a road accident in Preah Sihanouk province’s Prey Nub district on Sunday morning, officials said. Rananriddh, who is also the president of the Funcinpec

  • Bun Heang mocks US, threatens its citizens in scathing open letter

    After being hit with sanctions from the US Department of Treasury, Cambodian General Hing Bun Heang said he would retaliate against any US national who does not respect his country’s sovereignty, has ambitions to invade Cambodia or incites “traitors” in the Kingdom to do

  • Ranariddh 'seriously injured', his wife dies in accident in Preah Sihanouk

    THE wife of former first prime minister Prince Norodom Ranariddh has died. Ouk Phalla succumbed to injuries sustained in a traffic accident on National Road 4 in Preah Sihanouk’s Prey Nub district this morning. She and the prince were immediately rushed to the Preah Sihanouk

  • US slammed over BGU head as Foreign Ministry says sanctions violate international principles

    The Ministry of Foreign Affairs and International Cooperation (MFAIC) has condemned the US Department of Treasury for its sanctions, announced on Tuesday, against Cambodian General Hing Bun Heang for his alleged role in infringing human rights. In a statement, the ministry said it is disturbing