Small food and beverage makers are at risk of being uncertified when the ASEAN economic community takes shape in 2015, with the vast majority far from achieving international quality and safety standards, a government official says.
Him Phanith, the deputy director of National Productivity Center, said just 30 of the estimated 500,000 small and medium-sized enterprises (SMEs) operating in Cambodia have internationally recognised food certification. Not having the standards in place will cancel out the opportunity to export and will make competition with imports tougher when trade barriers are loosened in 2015 during ASEAN integration, Phanith said.
“Entrepreneurs are required to have knowledge and understanding about the systems. They also need to invest in adjusting the building if found necessary and equipments involving clean production,” Phanith stated.
There are three standards the government is urging SMEs to adopt. GMP certification ensures all products meet strict quality standards. HACCP relates to the management system that the food is made with, ensuring they are safe and take care especially in handling raw products. ISO 22000, however, is the combination of both and also allows producers to export to foreign markets.
“To enter the market in any of ASEAN countries, the products must abide by the standard requirement of those nations,” said Phanith, referring to the international food standard system ISO 22000.
But the certification process is expensive, potentially shutting the doors for many local businesses.
“In general, the standard cost is around $10,000 for a consultation. It may increase from $50,000 to $60,000 if human resources training and building adjustment are needed,” Phanith said.
Tang Srang, owner of Kheang Kheand beverages, a small drink-maker in Phnom Penh with just 10 staff, said she hoped to receive certification before 2015, but in reality, the price-tag makes achieving it almost impossible.
“I really want my products to be recognised when ASEAN integration comes, but the thing is that I have very little capital and there is still very limited support for our product from the Cambodian consumer,” she said.
“I want to get those certificates, but I do not dare to get loans from the bank. The interest rate is too high,” she added.
La Min, owner of Nacha Food, said he faced similar issues in raising capital to pay for the certification consultation process and any subsequent changes he would have to make to his existing operation.
“If we had to move to producing by using machines, it would require us to have a bigger area for production. And for a smaller producer like us, it simply won’t work and I would need a lot of money to do so,” he said.
“In fact, I may have to close down production once integration comes. I have nothing that will compete with others,” Min said. Meanwhile, the owner of one of the few local SMEs that is in the process of attaining HACCP and GMP certification says the process, while expensive, is a matter of consumer trust, not so much competition.
Sen Sokly has been running Khmer Mekong Food (KMF), a fruit drink company also in Phnom Penh, for more than nine years. And after spending more than $10,000 so far on just consulting services to meet the international standards, she says it’s a small price to pay for consumer confidence.
“It is not easy to gain recognition from customers at first. Most Cambodians are not confident about the quality of Cambodian made products,” she said, adding that KMF will receive GMF and HACCP certifications in June, which in turn should promote her brand as a trusted product.
“I did not make any revenue in the first four years. Most people are concerned about the hygiene of the products even though we have the label of confirmation of the quality and nutrition,” she added.
Currently stocked in shopping malls, restaurants and guest houses, and in various petrol stations, Sokly says she is now setting her sights on attaining the ISO 22000 certification to someday export overseas.