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Joint rubber deal signed

Joint rubber deal signed

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090408_14.jpg

France's Socfina signs joint-venture deal with Khaou Chuly Group to create 10,000-hectare rubber plantation and processing facilities in Mondulkiri province by end of year.

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BLOOMBERG

The joint-venture agreement between Khaou Chuly Group and Socfina plans to open a 10,000-hectare rubber plantation in Mondulkiri by the end of the year.  

CAMBODIA'S Khaou Chuly Group and French company Socfina have announced plans to jointly establish a 10,000-hectare rubber plantation and procession plant in Mondulkiri province this year.

Khaou Phallaboth, president of Khaou Chuly Group, said Tuesday that the two companies would invest US$50 million in plantation and processing facilities with the aim of producing rubber for export.

He added that his company was providing 30 percent of the total capital, with the other 70 percent to be supplied by the French company.

"I think it has been a positive step that we have been able to find an investment partner who has a lot of capital and good experience in planting rubber trees," Khaou Phallaboth said. "With our partner's experience, we expect to produce a minimum of around 20,000 to 30,000 tonnes of rubber per year for export and to create job opportunities for 4,000 people."

The company also plans to process rubber to make gloves, condoms and medical implements for export, he said. The company has already planted an area of over 1,000 hectares.

On Friday, Khaou Phallaboth signed an agreement with Minister of Agriculture Chan Sarun granting his company a 2,705-hectare economic concession in Mondulkiri, and he expects two further agreements - to be signed in May and June - that will grant the company more land for its rubber operations.

"We hope to receive a total economic land concession of over 20,000 hectares from the government by 2010 to grow rubber trees," he said.

Socfina could not be contacted for comment on Tuesday.

Ly Phalla, director general of the General Department of Rubber Plantations at the Ministry of Agriculture, said that the two companies' plan was accepted because there was still a lot of scope for further plantation development.

"The government supports plans to grow rubber trees in this country because we haven't planted much rubber so far," he said, adding that Mondulkiri has over 20,000 hectares of land dedicated to growing rubber trees out of a national total of 100,000 hectares.

Of this total, just half has produced so far, with the remaining trees expected to reach maturity by 2010 or 2011.

Ly Phalla said that Cambodia exported 40,000 tonnes of rubber in 2008 and is expected to export 50,000 tonnes this year.

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