Two processing factories will each have capacity to process 5,000 tonnes a year, but owners say they will buy 60,000 tonnes and export the remainder to Vietnam
I applaud the Vietnamese investors for setting up a factory in our country.
Cambodia's reliance on Vietnam for its cashew nut exports could be reduced next year if negotiations between officials from the neighbouring countries to build two cashew nut processing plants in Cambodia come to fruition.
Mao Thora, a secretary of state at the Ministry of Commerce, said Wednesday that authorities from Kampong Thom and Kampong Cham provinces were discussing the venture with counterparts from Vietnam's Binh Phuoc and Dong Nai provinces.
"They have reached an agreement and now need to sign a [memorandum of understanding] to take to the government to get permission to build the factories," he said.
He did not name the companies involved in the proposal; nor did he disclose the anticipated cost of the two projects, which would be based in special economic zones in Kampong Thom and Kampong Cham provinces.
Mao Thora said warehouses to store the raw cashew nuts would be completed in the fourth quarter of this year, and that he "hoped" construction of the two factories would begin by mid-2010.
Each factory is to have the capacity to process 5,000 tonnes of raw cashew nuts per year, he said.
Le Bien Cuong, commercial counsellor at the Vietnamese Embassy in Phnom Penh, said he expected the agreement to be signed next month and hoped construction could begin early next year.
He said the factory owners would talk to the government to secure land for cashew cultivation, as they also hoped to export raw cashews.
"We will not only buy cashews to supply our Cambodia production, but also to export for processing in Vietnam," he said.
Mao Thora said the Vietnamese side promised to buy 60,000 tonnes of cashews from local farmers every year: 10,000 for processing locally and 50,000 tonnes for export to Vietnam. Raw cashews fetch around US$800 per tonne, he said.
Vietnam is Southeast Asia's biggest cashew producer.
The director of the Cambodian Centre for Agricultural Studies and Development (CEDAC), Yang Saing Koma, said that the majority of Cambodia's agricultural products, including cashew nuts, were exported to Vietnam for processing.
"We lack the technology needed for processing and packaging," he said.
"I applaud the Vietnamese investors for setting up a processing factory in our country because we will be able to process and package cashews to sell locally and to export to foreign markets," Yang Saing Koma said.
No figures were available Wednesday on Cambodia's raw cashew exports.
However, the Economic Institute of Cambodia estimated annual production at between 30,000 and 50,000 tonnes in March 2007, or roughly 1.3 percent of total world production.
It said that less than 5 percent of Cambodian cashew nuts was processed domestically, with the remaining 95 percent exported informally to Vietnam.
Cambodia has around 80,000 hectares under cashew cultivation, according to Commerce Ministry figures.
Around 20,000 additional hectares were recently planted with cashews, but they were recently converted into a rubber plantation, Mao Thora said.