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Privatization of rubber takes next step

Privatization of rubber takes next step

T HE government and the French Development Bank have reached an agreement on

restructuring ownership to eventually privatize Cambodia's six rubber

plantations.

The plan announced last week calls for the bank to provide a

$2 million grant to pay for legal and financial assistance, the training of 40

people, preparation of nurseries and replanting materials and infrastructure

redevelopment.

Cambodia's six rubber plantations, mostly located north of

Phnom Penh in Kampong Cham, are now owned by the government, but the strategy is

to have foreign investors take over and restore them. The plantations were built

during the first half of the century by the French. Some of the trees are 60 and

70 years old, which is beyond their productive years, according to an

agriculture ministry official.

The prospects for the industry attracting

investors are believed to be good. The World Bank's annual report in February

said the rubber industry is one of the few areas in which foreign investment may

come from companies outside of the Asean countries.

The agreeement with

the French Development Bank in addition to the assistance and training, provides

for the bank to make loans to encourage investment in replanting the rubber

plantations and in manufacturing products.

A Ministry of Agriculture

official said several critical problems are facing the rubber plantations,

including the illegal cutting of trees, smuggling to Vietnam and

replanting.

It has been 25 years since any widespread planting was

undertaken. Chhun Sareth, under-secretary of state for the Ministry of

Agriculture, Forestry and Fishery, said the oldest rubber trees planted in the

1920s, 30s and 40s, should be cut.

"But I am worried they will cut down

the trees and will not replant." He said the rubber companies "only have time to

collect the latex and manufacture. They don't have time to

replant."

Companies from Malaysia, China and Indonesia, among other

countries, have expressed an interest in Cambodia's rubber companies, said

Sareth.

Five of the rubber companies are in Kampong Cham, and one is in

Kratie Province. One plantation, the Chup Co., is responsible for about 6,000

jobs between collecting the latex, manufacturing the rubber blocks for export,

administering the plantation and providing services such as schools for the

workers families.

The industry produced about 40,000 tons of rubber last

year, worth about $3 million.

Minister of Finance Keat Chhon and Minister

of Agriculture Tao Seng Huor said in an announcement that the agreement with the

French Development Bank is a major step towards the revitilization of one of the

main economic resources of Cambodia.

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