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Seizing a business opportunity

Seizing a business opportunity

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A customer checks out the stock at Pa Yanuth’s machinery store in Samroang. Photo by: Rann Reuy

TAKING the decision to set up a business is just as important as making it successful. Spotting an opportunity, and capitalising on it, is recognised as a path to success.

Pa Yanuth, 33, has a business next to the Samroang market that sells farm machinery and spare parts, which are in big demand in that area.

She had noticed that farmers in Oddar Meanchey, one of Cambodia’s most remote provinces, rarely used cattle to plough their paddy fields and realised there was a demand for farm machinery.

Pa Yanuth started out by selling only spare parts, but later decided to expand the business by selling machinery as well.

There are only two machinery sellers in Samroang town, according to ACLEDA Bank branch manager Pen Sovy, who has provided loans for both of them to expand their businesses.

Pen Sovy says the owners of both businesses have sought capital to extend their operations so they could meet demand.

“In this province, farmers rarely use cattle to plough their fields. Cows are usually raised for meat,” he says.

Pa Yanuth’s family has taken out loans twice this year. Each time, the loan of around $100,000 has been used to buy more machinery and spare parts to sell.

“We borrow to buy goods and other things,” she says, explaining that her business sells locally made spare parts as well as trucks and machinery imported from Banteay Meanchey province, Phnom Penh and and Thailand.

“This year, sales have been better,” says Pa Yanuth, who asked that the figures not be disclosed. Farmers buying locally made trucks have to pay  at least $2000 a unit, she adds.

Not all the money Pa Yanuth has borrowed goes straight into her business.

Some of it is used to maintain her cash flow,  because she owes money to wholesalers and some farmers still owe her for machinery or parts they have purchased. When the farmers harvest their crops, they will pay her, and she will then be able to pay the wholesalers.

Pa Yanuth, who has three dependent children, is optimistic about the future of her machinery business.

“I think it will be good,” she says, adding: “Farmers have become used to having machinery. They rarely use cattle nowadays because machines have a lot of benefits.

“I believe that if people can sell this year’s cassava crops for a good price, sales of  machinery next year will be good.”

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