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SMEs urged to tap into Korea

Employees shell cashew nuts in Kampong Thom province at a small enterprise’s processing centre in 2013
Employees shell cashew nuts in Kampong Thom province at a small enterprise’s processing centre in 2013. Agricultural producers in the Kingdom have been encouraged to pursue the Korean food market, where 70 per cent of food is imported. Hong Menea

SMEs urged to tap into Korea

Cambodian agricultural producers have been encouraged to step up their food processing potential and tap into the Korean market, where the majority of food is imported.

Speaking yesterday at a seminar on export opportunities for Cambodian Small and Medium Enterprises, Moon Ki-bong, second deputy head of Trade and Investment Unit of ASEAN-Korea Trade, said Korea provides a great opportunity for food producers willing to cater to Korean tastes.

“Our food industry relies on imported food for 70 per cent [of the market],” he said. “We can produce food related products for the domestic Korean market for only 30 per cent of our demand. Because it is very small, we find it easy, the potential to import agricultural products from Cambodia to Korea.”

Of particular demand for Korean food companies are the import of processed sweet potato, black pepper and cashew nuts. Cambodian processors need to develop products based on the demands of different foreign markets, Moon said.

“Cambodia has some processing food, but mostly focuses on the domestic market. [Cambodian] SMEs need to develop strategies like how to process in simple way and target at where there is hot demand for the products,” he explained.

Seminar attendee Mom Yuthe, a representative from Apsara Bakery House, who also produces dried fruit for the domestic market, said that a lack of knowledge in food processing techniques remains a key barrier of Cambodian producers to export to foreign markets.

“Our products are targeted only for the local market and the expiration date is very short. The processing procedures presented by Korean expert look simple, but it requires technical knowledge and hygiene to produce with longer expiration date,” she said.

“We need to improve more to be able to reach that standard,” she added.

Chenda Clais, owner of a pepper plantation in Kep province, said that she was looking to expand her business and develop a sweet potato plantation, but still had reservations about market demand.

“The potential to export is good. Sweet potato plantation is easy, but processing would be a challenge as it requires processing skills of which most of SMEs are still limited,” she said.

“The risk is that if we have already processed [food] with short expiration date and [produce] cannot be sold on time, then it will be a lose deal,” she said.

Suth Dara, deputy director of the Trade Promotion Department at the Ministry of Commerce, said yesterday that Korea’s reliance on food imports was just one incentive for Cambodian producers. Trade preferences should also further encourage shipping to Korea,” he said.

“The ASEAN-Korean Free Trade Agreement allows for 85 per cent of Cambodian agricultural products to be imported to Korea with a low, or even no tariff,” Dara added.

Cambodia and Korea bilateral trade has increased from $750 million in 2013, up almost 13 per cent, to $848 million in 2014, according to figures from ASEAN-Trade Center.

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