Investment Fund Head Shares Market Projections
In April, Douglas Clayton launched Leopard Cambodia, the country’s first multi-sector investment fund. To date, the fund has raised $12.6 million and hopes to accrue $100 million by March for an eight-year investment plan with projected 25 % annual returns, said Clayton, former director and chief investment officer at Knight Asia Group. Leopard has already invested in a 250-unit condo project in Siem Reap town and is in discussions to invest in agriculture within the next three months. The Cambodia Daily’s Stephen Kurczy met with Clayton, 48, this week to talk about the roiling global economy, areas for investment in Cambodia, and whether Leopard’s equity fund can actually raise another $90 million over the next six months.
Q: It’s been a turbulent week for the global economy. Investment bank Lehman Brothers declared bankruptcy, Merrill Lynch & Co was bought out, stock markets plunged. How will this affect Leopard Capital and Cambodia in general?
A: It’s another step in the global credit crunch that will create losses for counter-parties, which will further reduce global risk appetite. It slows down Western money, New York money, coming into Cambodia. If that money was ever going to come, it will come in at a slower pace because some of that money might be hurt by losses in the U.S.
But, really, what’s been driving the Cambodia property market is Korean money. Indirectly, the pain in Cambodia might be felt through some of the Korean investors who also had exposure to sub-prime, and possibly some of the players in the property market might be in a weaker position today than they were last year. In general, the mood in Korea is more cautious. Generally, Cambodia is not linked to the Western world, but the one link might be through the Korean investors.
Q: Don’t we see gloom in the local market, as well, amid garment factory closures, slowing economic growth, and predictions of a slide in Cambodian land values?
A: When I came here last year, people were saying $1,000 a square meter was way too expensive. Now they’re saying $3,000 to $5,000 for the same sites. So, even if it came down by half, it’s still a lot more than it was a year ago.
I don’t think it’s a big deal if the market corrects; I think it would be healthy for the economy in general. Right now, if you did want to build an office building, by the time you factor in the land cost and everything, it’s not as attractive. Right now there’s a land boom but not a construction boom.
I remember in the 1990s in Bangkok we’d look out our office and count the number of cranes in the sky. Once we counted 80 cranes. Phnom Penh is a quarter the size of Bangkok, that’d be like looking out and seeing 20 cranes. You see one, and if you have really good eyes, maybe two. When you see 20, you sell everything….
We’re here for an eight-year transformation. What happens now is really a reflection of what’s been happening up to now. You can either study the existing $8-billion economy or you can study the future $50- to $100-billion economy. We’re here really for the second aprt. There are a few businesses in the $8-billion economy that we’re interested in, but most of our investments will be things that haven’t started yet.
Q: Aside from Leopard Cambodia, three other companies have announced their intention to start investment funds. Would you expect more investment funds to open soon?
A. The fundraising environment is very tough now. The credit crunch has really sapped the risk appetite of the global investors. It’s a lot harder this year than it was last year to talk to people. Also, Vietnam had quite a collapse, so people who were interested in the region are losing money. It’s challenging for any group to raise money now.
I’m glad that we got started because it’s easier to raise money when you have some money—people think it’s a little bit less risky. But it’s hard for us as well.
Q. How is starting an equity fund in Cambodia more difficult, or unique, to starting one elsewhere?
A. We tend to see more venture opportunities, new projects. The challenges are different in a new project: There’s less due diligence on the old business. For example, if you’re going to invest in a cement plant in Vietnam, you have to go in there and look at the historical accounting and the machinery. But if you’re going to do a cement plant here, you would have to finance a site, find partners.
The most exciting thing is the openness of the economy. If you look at a country like Vietnam or Thailand, they may never in their history ever be as open as Cambodia is today. They’re much more closed economies. If you want to open a bank there, it’s 49 percent ownership maximum. But we have the opportunity, if we wanted, to open a bank here and own it 100 percent. You can’t do that in most countries—there are all kinds of restrictions for foreigners. Usually there is protectionism to the local business community, and it’s harder for foreigners to operate….
There are plenty of things wrong with this place, but if we look at the policy and the laws and the legal framework and the attitude toward foreign investment, this is nearly on par with Hong Kong and Singapore.
Q. But in World Bank’s report “Doing Business 2009,” Cambodia was still ranked 135 out of 181 countries for its overall business climate.
A. That’s a stupid vote. To me, openness of the economy is a bigger issue.
There’s a lot of nagging things:There’s the fact that your truck is going to get stopped five times for $5 tolls on the way to the border. Does that get the same mark as only being allowed to own 49 percent versus 100 percent? You’ve got to weight these things differently.
The really important thing is that you can own a business here. And then you’ve got low taxes. You’ve got a lot of very good things that are just so uncommon in Southeast Asia.
Q. You want to raise $100 million by next March. In the past six months you’ve raised $12.6 million. It seems you’ve got a long way to go to hit your goal.
A. The global appetite for risk is low, and lower because of the unfolding credit crisis. We were hopeful that the world would not have fallen apart as dramatically as it seems to be. But one of the natures of our fund is that it’s open for one year, and we’re hopeful that, following [today and tomorrow’s Cambodia Leopard] investors’ conference, money will come in a bit faster.
I’m not too worried. The key thing is Cambodia is delivering. The election went pretty well overall. The economy is not collapsing. In general, there aren’t any domestic problems getting in the way of the fund. I still think this is a great story that people will want to invest in.
Cambodia's development balance
Written by Brendan Brady and Kay Kimsong
THURSDAY, 18 SEPTEMBER 2008
The Asian Development Bank's country director, Arjun Goswami, offers a measured look at Cambodia's successes and challenges as the Kingdom emerges as a regional economic player
Is the slowdown of Cambodia's national economic growth a natural levelling ,or can we expect the number to rise above 10 percent again?
We are expecting growth to come down to around 6.5 percent and that's a reflection in part of the slowdown worldwide and inflationary trends. The slowdown worldwide has affected some of the engines of growth in Cambodia, and those engines have tended to be fairly narrow. So garment exports have clearly been affected, to some extent construction has also slowed down, and as credit becomes more constrained to head off inflation, that obviously affects growth numbers.
We're seeing the importance of going for diversification of those sources of growth to address the structural and competitiveness issues to ensure growth rates can rise again.
What sector should demand the most attention?
We have a particular concern for agriculture and rural development. That's where the vast bulk of Cambodians live. There is clearly a disparity between rural and urban Cambodia. Making sure rural communities are part of the tide of growth is very important and something that the ADB regards as part of its core mandate. We need to consider what sort of skills would be needed for two or three hundred thousand Cambodians who are coming onto the rural labour market every year. We need to look critically at vocational training to help Cambodians match their skills with the demands of businesses. Agriculture is a sector that has had a very volatile path given weather conditions. It's not performing to full potential and it needs to. The poverty numbers are deeper there and it is such a potential engine of economic development.
To what extent is your emphasis on agricultural development a response to the commodity price inflation boom that began last year?
Following the food price inflation crisis there has been a eureka moment in the development community. In 2007 we already knew more emphasis needed to be placed on agriculture and agribusiness in Cambodia, but the problem has been exacerbated. There's a much stronger need now after the food price inflation crisis.
The underinvestment in the rural economy is not purely a Cambodian story. It's been true in many parts of the Asia-Pacific, unfortunately. There are very particular challenges in trying to move that area forward because it involves many steps: It's a question of farm productivity, off-farm employment in the countryside, infrastructure, rural credit - and these kinds of things all have to work together. We are beginning to see some interest from foreign direct investment in agriculture in Cambodia, for example from the Middle East. We're beginning to see agribusiness showing interest. No doubt some of that is influenced by global food price hikes.
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We need to look critically at vocational training to help Cambodians match their skills with the demands of businesses.
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Cambodia has requested food emergency aid assistance from the ADB while also pursuing food-export deals.
We have been concerned with a balance of two issues: On the one hand, in order to exploit that potential for the export market, there needs to be a full assessment of how much irrigation would have to increase, how much additional productivity there would need to be. The second thing is that in doing any assessment, you want to make sure domestic consumption needs are met. Quite a lot of our attention has been on the social protection issue as a first step.
Are land-grant deals, such as those recently made between Cambodia and some countries in the Middle East, problematic in any way?
Contract farming is something that's been done by a number of countries, and we are not against it per se, but we want Cambodia to get the full value added for what they are producing. If all that is happening, as is currently the case, is that raw product is being exported, then Cambodia is not getting the full value addition that it can. There's huge potential to move further along the value-added chain.
Is there confidence in a Cambodian Stock Exchange?
Setting a timeframe of late 2009 is useful because it gives focus. But merely having the physical opening of the stock exchange is not sufficient. There have been some useful things that have taken place, such as the formation of a securities and exchange commission well in advance of the opening of the stock exchange. But there are things that can be done that would help build confidence in Cambodia's capital markets development like government securities - which usually help set a benchmark yield curve - and continuing to work on corporate governance and auditing capacity. This would really prepare the path for the stock exchange opening and listings.
What are the domestic benefits of the stock exchange?
Finance in Cambodia is still quite heavily concentrated in the banking sector so having that non-banking side developed is useful.... An economy that has a good capital market can ensure its private sector is able to draw from equity capital. And people take ownership stakes, equity capital is a democratisation of ownership of companies. It also helps bring a strong drive not just for economic growth but for reforms. A good stock exchange will help drive transparency. And this is a cycle, because it can attract capital.
Has the ADB been pushing the government to pass the anti-corruption law?
A very heavily weighted part of our funding formula for our member countries is based on governance issues and anti-corruption issues. So the extent to which we are able to assist Cambodia is linked to Cambodia's ability to make progress in this area. We are one in the development community in saying this does need to be enacted, and it's important to set a timeframe for it to happen.
Are Cambodia's urban communities being protected from displacement in the face of development?
That's a challenge. If you look at some of the urban slums, they are being hit. So that sort of social protection does need further work. It's a highly relevant issue for Cambodia as a whole. Having a robust system of safeguards is very important. We've been trying to encourage more national subdecrees in this area to find the balance between compensating people who are affected and allowing for development
PROFILE
Arjun Goswami
Born October 2, 1960, in Vienna, Austria. Education Graduated with a BA and MA in modern history from Oxford University and later was awarded an LLM in public international law from Cambridge University and a JD from American University in Washington, DC. Later was awarded MSC in financial management from the School of Oriental and African Studies, London University. Career Goswami worked in Washington, DC, and Mumbai, India, before joining the ADB.
SoftBrands Expands Presence in Cambodia With Appointment of Business Partner
SIEM REAP, Cambodia, Sept 16, 2008
Soft Braa global supplier of enterprise application software, has today reinforced its commitment to its customers and the hospitality market in Cambodia with the appointment of Campura Systems Corporation as its local distributor to support the fast growing demand for hospitality solutions and services in the country. Under the agreement, Campura Systems Corporation will become SoftBrands' business partner by providing sales, implementation and support services for a range of solutions throughout Cambodia.
"We are very encouraged by the growth potential the fast expanding Cambodia hospitality market has to offer," said Harbans Singh, president, SoftBrands Hospitality, Asia Pacific. "The appointment of Campura Systems Corporation as our distributor allows us to fully focus on developing this largely untapped market to accelerate our regional growth plan. This formalized business relationship will also enable us to leverage Campura's business acumen and support expertise in this marketplace. This further reinforces SoftBrands' commitment to existing customers as well as the local hospitality market."
SoftBrands provides hospitality solutions to the independent and boutique hotel as well as larger groups and chains. Solutions include Property Management, Central Reservation Management, Customer Relationship Management, Business Intelligence, Club Management, Spa Management and Point-of-Sales systems. The suite of solutions is designed specifically to enable hoteliers to centralize multi-property operations, improve guest loyalty, increase profitability and improve revenue management.
"We are truly pleased to be the business partner of SoftBrands and representing their best-of-breed hospitality solutions in Cambodia," said Volak Sao, chief executive, Campura Systems Corporation. "This partnership brings together our industry experience and SoftBrands' technology to give us the ability to offer hotels in Cambodia a complete range of fully integrated solutions. More importantly, we have full confidence in SoftBrands' corporate philosophy and strategic technological directives that makes them the leading provider of hospitality solutions today."
"We are pleased with the appointment of Campura to strengthen our position in the Cambodian market. This will give us the ability to service and support our existing customers, and to further expand our market base," commented Kenneth Toh, Director of Sales, SoftBrands Singapore.
About SoftBrands Hospitality
SoftBrands Hospitality provides central reservation, property management and business intelligence software that can be centrally managed to support many properties within a hotel chain, as well as less complex offerings that can be installed on site at an independent hotel. SoftBrands distribution service, Karyon, allows hotels to easily manage rates and inventory availability across all four Global Distribution Systems and many other online sources of demand. SoftBrands is committed to the hospitality industry, and is an active member of OpenTravel Alliance, HTNG, HSMAI, HFTP, HEDNA, AH&LA, AAHOA, NBTA & PHMA..
Cambodia needs 1.14 bln USD to develop 7 hydropower projects
PHNOM PENH, Sep 16, 2008 (Xinhua) - Cambodia needs 1.14 billion U. S. dollars to develop seven priority hydropower projects out of the 29-hydropower-project master plan, according to a report released on Tuesday.
The location of the hydropower sites will be in the northeastern and southwestern of Cambodia, according to the report from a joint study by Japan International Cooperation Agency (JICA) and Cambodian Ministry of Industry, Mine and Energy (MIME).
"We have to discuss them in details to implement the priority hydropower projects," said Ith Prang, Secretary of State for MIME.
"When we have electricity from hydropower, it will provide electricity supply of cheap price and help reduce poverty in the country," he added.
The report said that Cambodia has two existing hydropower stations, including Kirirom I and O Chum with the capacity of 12 and one megawatts respectively, which are already operated by Electricity Authority of Cambodia.
The hydropower master plan is a part of generation expansion in Cambodia, the report said, adding that the target is 100 percent of village electrification, including battery lighting by 2020 and 70 percent level of household electrification with grid quality by 2030.
Japanese firm funds produce project
Written by Chun Sophal and Hor Hab WEDNESDAY, 17 SEPTEMBER 2008
A JAPANESE company has invested US$2 million in a farming project in Kampong Cham province to grow high-quality vegetables for Cambodia's hotel industry, which is forced to import much of its produce from abroad.
Kobe Busan Co Ltd will grow a variety of produce, including ginger, cabbage and pumpkin, on 2,000 hectares of land, said Yin Buntith, who heads up a provincial investment committee. He added that the project would provide about 250 new jobs.
"We hope the company will help upgrade the quality of Cambodian produce for world markets," Yin Buntith said.
Kobe officials could not be reached for comment. Despite its broad agriculture sector, Cambodia imports a significant percentage of vegetables from Vietnam and Thailand, according to Yang Saing Koma, president of the agricultural NGO CEDAC.
"Investing in vegetables is good because it will help increase local production and reduce our reliance on imported vegetables," he told the Post.
A booming tourism sector has significantly increased demand for produce, particularly at high-end hotels.
Cambodian Hotel Association President Luu Meng said about 30 percent of produce used in hotels is imported, and that figure would drop if Cambodian farmers offered better quality goods. "We will reduce the amount of vegetables we buy from other countries if local producers can secure a high quality vegetable supply," Luu Meng said.
Textile factory closures rising this year: GMAC
Written by Hor Hab and Chun Sophal, WEDNESDAY, 17 SEPTEMBER 2008
A RISE in garment factory closures could threaten the viability of one of the Kingdom's key economic sectors, a labour official told the Post.
Cheat Khemara, of the Garment Manufacturer's Association of Cambodia (GMAC), said closures so far this year have nearly eclipsed those of 2007.
Kaing Monika, external affairs manager at GMAC, said a total of 25 factories have been shuttered, with 16 new ones coming online - leaving a total net closure of nine, compared to 10 during 2007.
About 2,000 workers have been put out of work due to the closures, according to Chea Mony, president of the Free Trade Union, Cambodia's largest workers group.
Too many trade unions
Kaing Monika said the influence of trade unions have hurt the industry by unsettling potential new investors.
"The country gives too much freedom to the trade unions," he said.
"There are about 1,000 different unions operating in more than 33 factories."
Cheat Khemara said a government policy of not locating factories in large cities has also created problems for some workers.
"The factories need to be located in larger population centres. They agree to cover the costs of transportation or risk losing their most skilled workers," he said.
Fears overblown
Oum Mean, undersecretary of state for the Ministry of Labour and Vocational Training, said, however, that the closures do not pose a threat to the industry.
"Some factories have closed because the number of orders has dropped," he said. "But others are simply relocating."
He added that the nation's economy continues to be stable.
Chea Mony estimated that in addition to those workers affected by the closures, some 27,000 have left their jobs for employment elsewhere. Cambodia has about 350,000 garment workers nationwide.
"The factories in Cambodia will never go bankrupt," Chea Mony said. But he did admit there is cause for concern.
"The number of workers has declined because they are less able to make their living on factory wages as inflation continues to rise."
Cambodia pioneering world's first carbon trading cooperative
Written by Anne-Laure Porée TUESDAY 16 SEPTEMBER 2008
With the global carbon trade booming, environmental projects in developing countries have joined forces to finance their poverty reduction efforts by selling carbon credits collectively
AS a rule, the world of carbon credits is dominated by large-scale industrial projects backed by international companies with deep pockets.
But Cambodia is proving to be the exception by playing host to the first-ever carbon cooperative of NGOs and other small groups hoping to increase their clout over climate change reform.
It has taken more than three years for the French NGO Geres (Groupement Énergies Renouvelables, Environnement et Solidarité) to prove that it could be an actor on the carbon credit market.
At first, many observers thought it was impossible.
Yet today, various Geres projects offset approximately 140,000 tonnes of CO2 annually, the most of any NGO operating in the carbon market.
It is also the only NGO that funds its programs in their entirety by selling carbon credits, which they accumulate through their projects like low-carbon cook stoves - affordable clay grills that burn less charcoal and are popular among Cambodians.
The Geres Climate Change Unit says it is an example of how a small-scale, not-for-profit project can break into the carbon credit market.
It has won the backing of ethical buyers, public development agencies, academic institutions and governments, including that of Cambodia.
From these successes, the idea of a cooperative, Carbon Solidarity Asia (CSA), was born last year.
The CSA aims to provide the technical support needed by groups who want to develop carbon offset projects. This could include, for example, energy-efficient stoves, bio-gas or forest conservation.
The CSA will also work with individual projects to help them sell their carbon credits on the global carbon markets.
Why trade carbon credits?
For Geres, entering the carbon market and off-loading the carbon credits generated by their environmentally friendly projects was key to maintaining the funding that kept the group going.
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We decided to be actors on [carbon] markets in order to have an impact on it.
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"When we began in 2004, the carbon credit was estimated at US$3 per tonne. Today the same credit is worth around $30," said Minh Cuong Le Quan, manager of Geres' Climate Change Unit.
"This is a huge incentive for organisations that are traditionally reliant on donors and continually struggling to find funding for their successful projects."
Secondly, the global carbon trading market is a means for NGOs to gain the clout they need to influence international climate policy.
HENG CHIVOAN
Factory chimneys belch out smoke in Phnom Penh’s industrial zone, on the fringes of the city.
"We are very small in this market dominated by industries, banks, pension funds, audit offices, which have a logic of profit," said Minh.
"But the originality of our message makes our voice heard. It is no secret that the international carbon markets do not do enough for developing countries, [so] we decided to be actors on this market in order to have an impact on it and in order to finance clean development."
Moreover, she said runaway demand in Western countries far outstrips supply in the carbon credit market, giving NGOs a foot into an otherwise closed world of industrial dealings.
"Until now the supply of carbon credit is insufficient," Minh said.
"NGOs have to turn towards the carbon market," she added.
What is the carbon collective?
The idea of the carbon collective is to help small NGOs to better access the carbon credit market, its backers say.
"To break into this market there are many challenges. It would be difficult for one NGO alone to overcome the challenges," said Nanda Ram Baidya, director of the Centre for Rural Technology in Nepal, explaining why her organisation supports the coalition.
Feri Lumampao, director of the Asian Alliance of Appropriate Technology Practitioners Inc (APPROTECH ASIA), said the CSA will help small organisations to join the carbon market "with confidence and integrity".
Last April, the inaugural meeting of the coalition took place in Phnom Penh, where a dozen organisations adopted a founding charter and formally created the CSA.
Since then, they have decided to base the cooperative in Singapore, but both local or international NGOs from across the region can be accepted as members, as well as eco/social-enterprises or governmental projects if they accept the CSA's charter.
"The CSA will help projects which have a direct impact on employment, on living conditions and quality of life for people," Minh said.
"Industrial projects or those with no impact on the poor can find scores of consultants elsewhere to help them," he added.
In the interest of transparency, members commit themselves to channelling their carbon credits through a common gateway, operated by CSA.
This system guarantees that all carbon credits are registered and can be sold only once.
"We also want to follow up the value of the credits and to push them, not to let 80 percent of the value evaporate in the hands of intermediaries," said Minh.
The CSA also hopes to give members access to affordable consulting services that will equip them with the skills they need to negotiate the carbon market on their own, according to Minh.
Joining forces
Cooperative members say one of the unique aspects of the CSA is the wealth of internal expertise that they will be able to share in order to level the carbon market playing field.
"In the Philippines, I see that my experience will enrich the CSA," said APPROTECH's Lumampao.
"While the CSA helps me to help others ... move efficiently to the carbon market and make use of carbon finance to create greater impact in poverty reduction and climate change mitigation."
The next phase for the cooperative is to review all the projects that come under the group and identify best practices in Asia.
From this, the CSA will define standard procedures that similar cooperatives will be able to use elsewhere for more efficient, larger-scale projects.
The problems are the same for the Philippines, for Indonesia or Cambodia, cooperative members say.
CSA members said they are preparing to role out the same carbon market model in Africa.
Exactly What is a carbon credit?
A carbon credit is a financial instrument representing a reduction in greenhouse gas emissions. One carbon credit represents the reduction of one metric tonne of carbon dioxide. The Kyoto protocol obliges states and companies to reduce their emissions of carbon dioxide – or to “cap” their emissions. If they are below their authorised cap of emissions, they receive carbon credits which they can sell. There are two primary markets for carbon offsets. In the larger compliance market, companies, governments or other entities buy carbon offsets in order to comply with their emissions caps. In the smaller voluntary market companies sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint. Carbon offsetters purchase carbon credits from a carbon development company that has aggregated the credits from individual projects. The quality of the credits is based partly on the validation process of the company that acted as the sponsor to the carbon project.
Korean investors reach for Cambodian skies
Sep 16, 2008
By Geoffrey Cain
Asia Times (Hong Kong)
Some analysts believe fast rising property prices, fueled by rapid South Korean capital inflows, might even be inflating Cambodia's first-ever property market bubble.
PHNOM PENH - Planned to tower 52 stories above this city's low-slung skyline, the US$1 billion International Finance Complex (IFC) embodies the bold new ambitions of Cambodian capitalism. If South Korean investors actually complete all the projects they have announced and launched, the once colonial Phnom Penh will soon come to resemble a mini version of high-rise Seoul.
Led by property developers, South Korean investors accounted for over 70% of the $1.5 billion worth of foreign direct investment (FDI) that entered Cambodia in the first half of this year, nearly three times higher than the $520 million it received all of last year. South Korean investments have since 2006 dwarfed Chinese inflows, which have been more critically scrutinized, but only represented 10% of total FDI in the first half of 2008.
Cambodia has long been one of Southeast Asia's laggard economies, plagued by its war-torn past and a backward period of communist-led central planning. With economic opening and market reforms, Cambodia's economy is zipping along nicely, with gross domestic product surging at 9.5% last year. Nowhere is that fast growth more noticeable than in the city's fast-changing skyline.
With all the building activity, some are beginning to wonder if the economics of the building spree compute and how the broader Cambodian economy might be affected if South Korea goes into financial meltdown, as some analysts have predicted. South Korean investors are overseeing and building at least eight major property projects in Phnom Penh, but that number is constantly changing as new concepts arrive at and leave the drawing boards.
There are clear risks to the high-end developments, which are banking heavily on the arrival of high spending foreigners once a purported major oil and gas find on the country's southwestern coast is realized and exploited. The World Bank once estimated the country's total offshore production potential to be at around 2 billion barrels, though Chevron, the US energy company managing the concession, has remained tightlipped about the details and viability of the fuel find.
Consider, for instance, Gold Tower 42, a $240 million condominium project financed by South Korea's DaeHan Real Estate Investment Trust and built by developer Yon Woo. The high rise project is selling units for between $460,000 to $1.5 million and the developer claims 75% of the tower's space has already been sold, mostly to Chinese and South Koreans. Considering 33% of all Cambodians earn less than US 50 cents a day, according to government statistics, the project's pricing is out of reach for nearly all local buyers.
The same is true of the $2 billion Camko City, a satellite city built and owned by South Korean developer World City Company, which entails an international university, condominiums, exercise centers and modern shopping for a community of over 1,000 well-heeled residents. Another South Korean-built mini-neighborhood, Sun Wah International Finance Center, is also on the drawing board and promises similar top-notch amenities.
Camko City, like several other South Korean-led developments, has stirred local controversy and carries big political risks. To make way for the project, the developers completely filled Pong Peay Lake, once a main outlet for the city's dysfunctional drainage system, while evicting long-term residents with compensation at one-tenth of the property's market value, rights groups say. According to Cambodian land laws, lakes are public property and may be developed only in a "rational" manner.
Bypassing donors
South Korea's building spree comes just 11 years after the two countries re-established formal diplomatic ties, which were broken off in 1975 when the communist Khmer Rouge regime took power. Cambodian Prime Minister Hun Sen has warmly welcomed Seoul's capital inflows and even presided over the launch of certain South Korean-led big ticket property projects. The former communist guerilla-cum-market reform champion was recently reelected to a new five-year term and has successfully leveraged the country's recent fast economic growth to his political advantage.
During an inauguration event in May for a new road project, funded by the South Korea International Cooperation Agency (KOICA), Hun Sen pointed to the South Korean-built Gold Tower 42 as a sign of coming Cambodian prosperity. He lauded South Korea for being at the forefront of eight Cambodian business sectors and said that "diplomatic relations with the Republic of Korea are remarkably developed".
He attended in person the inauguration earlier this year of South Korean President Lee Myung-bak and surprised many when he told a local television reporter that Lee was his former "economic adviser".
South Korean investment signals a shift from Cambodia's traditional reliance on multilateral development aid funded by the likes of US Agency for International Development (USAID) and the Japanese International Cooperation Agency (JICA), towards more private investment-led growth. The South Koreans' no-strings-attached approach to business is also believed to be favored by Hun Sen's government, which often found itself at loggerheads over issues of transparency and corruption with multilateral lenders.
At the same time, there are mounting and apparently unhedged market risks to the breakneck growth. The building spree in Phnom Penh notably coincides with a spike in inflation, which rose a dramatic 25% in the first half of 2008, according to the National Bank of Cambodia. That's driven up substantially the prices of imported building materials such as glass and steel.
Some analysts believe fast rising property prices, fueled by rapid South Korean capital inflows, might even be inflating Cambodia's first-ever property market bubble.
The National Bank of Cambodia recently projected gross domestic product would slow to 7.2% in 2008, down substantially from last year's 9.5% clip. The report noted that the construction sector is now the country's biggest urban employer.
Some economic and financial analysts have drawn worrying comparisons to neighboring Vietnam, where land and property prices skyrocketed in line with rapid FDI from Taiwan, Singapore and South Korea in 2007, but fell back around 25% in the first half of 2008 due to softening economic conditions and dried-up finance for buyers. In response, Vietnamese banks have restricted their lending to property buyers and developers.
South Korean property developers in Phnom Penh have so far defied economic gravity, with representatives from IFC and Gold Tower 42 claiming that the impact of inflation on their ventures will be minimal and that construction would continue on schedule. So far most developers have not increased their asking prices, despite the fact existing housing prices and rents have increased five-fold or more since 2005, when the projects were first drawn up. Scaffolding prices alone have jumped to $1,035 per ton this from $400 in 2007, property analysts say.
Other analysts say South Korea's mounting economic troubles at home, including a ballooning short-term debt profile, could soon impact on Cambodian ventures as credit conditions tighten. It's still unclear how much South Korea's own softening economy has served as a push factor in outward investments into Cambodian property.
The South Korean won has depreciated around 10% against the US dollar this year and foreign capital outflows from Seoul are gathering pace. Some analysts estimate South Korea became a net borrower as of July, witnessed in the country's narrowing foreign reserve stock. If the won-dollar depreciation continues, as some analysts predict, it will create new burdens to South Korean companies through higher external lending rates.
Add to that mix fast rising prices for building materials and it seems possible the more ambitious of the South Korean property projects could become financially unviable before they are completed. To fill all the high end space now scheduled to be built - assuming it's actually completed - Cambodians will eventually need to occupy a substantial percentage of many developments, some property analysts say.
Yet with a national GDP per capita of $1,800, it's not clear yet that locals, apart perhaps from government-linked elites, can afford the prices South Korean developers and their financial backers still expect to fetch. There are also potential cultural barriers: middle class and elite Cambodians' have long favored to live in stand-alone, colonial-style villas rather than cement and glass skyscrapers.
While South Korean developers continue to ramp up their building spree, the sky may yet be the limit to their Cambodian designs.
Geoffrey Cain is based in Phnom Penh and a contributor to the Far Eastern Economic Review and Integrated Regional Information Networks (IRIN), a United Nations-run news wire service. He may be reached at geoffrey.cain@gmail.com.
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New bridge to facilitate Cambodia-vietnam trade
TUESDAY, 16 SEPTEMBER 2008
Cambodia has agreed to construct a bridge connecting Kandal province's Chrey Thom district with Vietnam in a bid to boost cross-border commerce, officials said last week. The US$20 million bridge will become an international checkpoint, according to Em Sovannara, head of the regional political department at the Council of Ministers International Relations Department. "I believe business at this checkpoint will increase because transportation will be easier." There are approximately 40 international and local border crossing between Cambodia and Vietnam, said Mao Thora, undersecretary of state for the Ministry of Commerce. "The ministry is looking for ways to expand commerce," he said. Trade between the two countries - mostly in the agricultural sectors - is expected to reach US$1.5 billion this year, Commerce Ministry officials said.
Some 150 Vietnamese vendors will hold an exhibition in Phnom Penh starting Thursday to highlight Vietnamese goods, said Le Bien Cuong, Vietnam's commercial counselor to Cambodia. "Our people used to claim that Vietnamese products are of a poor quality, so they want to show us that their products are good," said Kep Vutha, who is organising the exhibition.
S’ville needs deep-water harbour, port official says
Written by Nguon Sovan , TUESDAY, 16 SEPTEMBER 2008
The Sihanoukville Autonomous Port chief says Cambodia doesn't need more than one port, and he has a good idea which one should survive
THE lack of a deep-water harbor for large cargo ships in Sihanoukville is costing the port US$50 million in lost revenues each year, Lou Kim Chhun, chairman and CEO of the Sihanoukville Autonomous Port (SAP), told the Post last week.
He added that too many ports in Cambodia have weakened the national economy by spreading out larger shipments in smaller parcels throughout the Kingdom.
"Based on its economy of scale, Cambodia only needs the Sihanoukville Autonomous Port," Lou Kim Chhun said.
He said large shipments must currently arrive at larger ports in Singapore or Vietnam and then get separated into smaller shipments for transport to Cambodia, adding as much as $500 in extra fees per container.
"If we had one deep-water port, and if we couldincrease our throughput to one million containers, ships carrying large cargo shipments would dock in our port," he said.
He said with other ports in Sihanoukville, as well as those in Phnom Penh and the forthcoming Kampot port, capacity is diminished by being spread over a larger area that can handle only small amounts of cargo.
"If larger ships could dock at our port, the economy would be able to compete with our neighbours," he said. "Without that ability, we're not able to process as many containers and will lose as much as $50 million a year in revenues."
Lou Kim Chhun said he faces mounting competition from Sihanoukville's Oknha Mong port, which deals primarily in goods coming in from Thailand.
Tann Monivann, vice president of the Oknha Mong port, said Lou Kim Chhun's comments were motivated by self-interest.
"He is simply trying to protect the advantage of his port," he said. "If Lou Kim Chhun wants a deep-water port, he should build one and enjoy the advantages, but it makes no sense to say Cambodia needs only one port."
Lou Kim Chhun said the SAP will eventually include a deep-water harbor, along with several other planned improvements to take advantage of growing annual revenues.
"This year, we expect to increase throughput to 2 million tonnes, with revenues of $28.8 million," he said.
The SAP will add a Special Economic Zone in 2009 on 70 hectares of land adjacent to the port, he said, adding that he hoped the port would match the quality and capacity of regional ports in the next four years. Other projects include a 13.5-metre-deep port for heavy cargo and a shallower 7.5-metre-deep port for a new oil supply terminal projected to begin construction in 2011. "We are building in anticipation of demand rather than letting the demand wait on the port," he said.
US-funded Commercial Bank Opens in Phnom Penh
Another commercial bank Wednesday opened in Cambodia, according to officials. Bridge Capital, LLC, in a press release Thursday announced the soft opening of Angkor Capital Bank, a wholly owned subsidiary, on Phnom Penh’s Norodom Boulevard. “The bank is the first to be invested in by American shareholders and offers a totally new, American-style banking experience,” the release said. However, company officials would not disclose details. Jon Anderson, the spokesman for Bridge Capital, LLC, which is headquartered in the US Commonwealth of the Northern Mariana Islands, confirmed the opening of the new bank but referred questions to the bank itself.
Angkor Capital Bank General Manager Alex Ng did not respond to repeated telephone calls Sunday, but a receptionist said the bank had no customers yet. (Stephen Kurczy)
Drinking water solution project in Cambodia wins IWA award
JAKARTA, Sept. 15 (Xinhua) -- A study that offers ceramic water filters as a sustainable solution for rural drinking water treatment in Cambodia, has won the International Water Association (IWA) 2008 Project Innovation Award Grand Prize for Small Projects in Vienna recently, a release by the World Bank Indonesia said.
According to the release received by Xinhua on Monday, the study is funded by UNICEF and the Water and Sanitation Program and implemented by the University Of North Carolina School of Public Health.
The goals of the study were to characterize the microbiological effectiveness and health impacts of the ceramic water purifier, a household-scale ceramic filtration technology, in target populations and to identify successes and potential challenges facing the scale-up and implementation of the technology.
Results from the study suggested that the filters could significantly improve household water quality, offering up to 99.99 percent less E. coli in treated versus untreated water, said WSP Cambodia Senior Water and Sanitation Specialist Jan-Willem Rosenboom.
Ceramic filters have helped many families in rural Cambodia, especially those living in villages where the ground water has proven to be contaminated with arsenic. Using these affordable filters, families can use surface water for drinking and cooking while continuing to use their contaminated wells for other purposes such as washing and gardening, Dr Mao Saray, Director of Rural Water Supply, Ministry of Rural Development, Cambodia said.
Cambodian minister for better links with North-east
Surajit khaund
The Assam Tribune (India)
GUWAHATI, Sept 14 – Senior Minister of Commerce, Cambodia, Cham Prasidh, has suggested better linkage between North-east India and Cambodia to boost trade activities. Talking to this correspondent here today, Prasidh, said that road and air linkage should be established between Cambodia and the region so that traders of both the countries can reap the benefit.
“We have very close historic links with the North East and therefore we are keen to develop our business relations with the region, but to increase our bilateral trade, we have to develop the existing communication system,” he said, adding that he had already invited Ministry of DoNER to make an in-depth study in Cambodia to explore business opportunities.
The senior minister of Cambodia arrived in Guwahati yesterday to participate in the 4th North East Business Summit beginning from tomorrow.
Providing more information on trade, Prasidh informed that the volume of trade between India and Cambodia has been gaining momentum. “The present volume of trade can be doubled by way of opening up more road and sea routes,” he added. In this context, he said that a direct air link between North East and Cambodia should be established so that traders can explore the markets and share their business views as well. “Since tea is the main industry in the region, traders can explore our market. Moreover, we are very keen to bring tea technology to our northern region in which tea is cultivated,” he added.
Asked about his future plans, He said that Cambodia is eager to increase the volume of trade with India. “Since India has emerged as a major economic power in Asia, we are keen to boost our trade ties with it. Moreover, as far as trade is concerned, India can export pharmaceutical, tea and electronic products to our country and similarly we can export rice to India. We have already invited Indian companies to invest in our country,” he stated.
Prasidh also laid emphasis on cementing the cultural relations between North East and Cambodia.
MK Saharia, Chairman, North Eastern Regional Council, ICC, who accompanied the Minister, said that ICC has been making efforts to turn the region into an investment friendly destination. “The North East Summit is aimed at bringing more investments into the region,” he added.
Thaksin's reported investment in Koh Kong has led to a land-grabbing frenzy
Hun Sen and Thaksin Shinawatra (Photo: Reuters)
Gold Rush Follows Thaksin
Sunday September 14, 2008
Bangkok Post
Thaksin Shinawatra's reported investment in Koh Kong has led to a land-grabbing frenzy, writes Piyaporn Wongruang and Nareerat Wiriyapong
Embattled former prime minister Thaksin Shinawatra has packed up and moved to London, but Koh Kong residents like Kamnan Tit are hoping he returns and brings economic prosperity to the Cambodian province.
For the past few months, rumours of the ex-prime minister's possible involvement in a mega-tourism project in Koh Kong have fuelled a land grab and sent prices soaring, creating a buzz of activity in the once sleepy area.
''We heard the news that Mr. Thaksin would come to invest in Koh Kong, so we even rushed to buy land on nearby Koh Kapi,'' said Kamnan Tit, who recently introduced the principle of sufficiency economy to his village of Peam Krasaob.
THE MEETING
Fueling the excitement was Mr. Thaksin's meeting with Cambodian Prime Minister Hun Sen at the Siem Reap golf course in early April this year.
The golf outing came shortly before former foreign minister Noppadon Pattama (also formerly Mr Thaksin's lawyer) showed up at the state opening ceremony for the upgraded Road No 48, which links Thailand's border town of Had Lek, in Trat province, with Koh Kong.
The road, about 150 kilometres long, was financed by the Thai government with a low-interest loan of about 500 million baht, plus another 300 million baht in aid for four connecting bridges.
The aim of the project is to improve access to inner Cambodia and connect Thailand, Cambodia and Vietnam under the economic framework of the Greater Mekong Sub-region (GMS) scheme.
The White Paper produced by Thailand's foreign ministry noted that Mr. Noppadon was there to discuss the heritage listing of the disputed Preah Vihear temple.
Speculation from many sources links the two incidents, in the belief that the people involved had compromised Thailand's interests in exchange for Mr Thaksin gaining a personal advantage.
According to several Thai agents, as well as officials working in foreign affairs, Mr Thaksin discussed the possibility of investing in a tourism-related project on Koh Kong with the Cambodian government during that period.
One high-ranking foreign affairs official, who was briefed by a source close to Hun Sen, said that a discussion had taken place, in which they agreed that the investment should go to Koh Kong.
An internal information analysis by one Thai foreign affairs unit noted that the targeted area for Mr Thaksin's investment would be the 10,000-hectare Koh Kong island, the biggest of 23 islands off Koh Kong province's coast.
It further noted that the Cambodian government had already approved the lease of the whole island for the development of hotels, casinos and other businesses to stimulate the tourism industry.
A road and a series of bridges are also planned to link the project to the mainland. Road No 48 will be 10 kilometres long and cut through the plots of some senior Cambodian military officials.
THE CONNECTION
''Khun Phat is among the people taking part in this project, and possibly Mr Thaksin too,'' said another high-ranking foreign affairs source.
''Some Cambodian senior military officials here said the land prices will increase if Mr Thaksin really invests there.''
Khun Phat is the owner of Koh Kong International Resort Club, near the border. A senator for the ruling Cambodian People's Party and widely known as the ''King of Koh Kong'', Khun Phat has been accused by international human rights groups of forcing locals off their land by getting police to use force against them.
Cambodian Defence Minister Tea Banh was quoted as saying during the opening of the road that Khun Phat ''was discussing the prospective investment in Koh Kong with Mr Thaksin''.
The defence minister also stated that Mr Thaksin was one person Hun Sen trusted and wished to invite to be an advisor on the development of Koh Kong, which the Cambodian government wants to turn into a special economic zone.
In a telephone interview, Khun Phat confirmed he is among the investors in the planned project. But he said it will be a joint investment between himself and a few European investors.
According to Khun Phat, these investors were introduced to him by Mr Thaksin. Khun Phat insisted Mr Thaksin will not invest in the project. He said he only introduced the investors.
''[Mr Thaksin] has a lot of friends,'' he said, adding that the project has received an unofficial green light from the Cambodian government.
They only need to discuss in detail what the project will look like, as well as how the benefits will be shared between the investors and the government.
''We are serious about this, but we have to wait for the new government first,'' said Khun Phat, who is known to be a close aide of Hun Sen.
After Mr Thaksin became Thailand's prime minister in 2001, he met Hun Sen at least eight times to discuss opportunities between the two countries.
It was Mr Thaksin who proposed the Economic Cooperation Strategy in early 2003, which later turned into a new regional economic framework known as the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, or ACMECS, at the end of that year.
Under the framework, 46 common projects plus 224 bilateral projects were lined up for implementation over 10 years following the first declaration. These included Road No 48.
The road project came about after Mr Thaksin met Hun Sen during the GMS meeting on Nov 3, 2005.
According to the foreign ministry's letter to the secretariat of the cabinet, the foreign ministry of Thailand reasoned that Road No 48 would help improve the economy of both countries.
It would also help to elevate Thai-Cambodian relations, and was in line with Thailand's regional transport link strategy under the GMS.
As well as the road upgrade, other development projects, including the development of the linkage between tourism sites in Cambodia and Thailand, were also in the pipeline.
THE DOWNSIDE
Cambodia stands to gain a lot if these investments come true, and especially if Mr Thaksin is involved. However, there may be a downside as a consequence of the land grabs and speculation.
With rumours over Mr Thaksin's involvement buzzing around from Koh Kong to Phnom Penh, many local residents have been quick to buy up land with the hope of hitting the jackpot.
Land prices are indeed increasing, according to the president of Koh Kong Chamber of Commerce, Bun Tun.
He said land changes hands easily, sometimes even within a day, due to high prices offered for further land speculation. The price of a beachfront property, for instance, was once about US$5 per square metre. It has now increased to $150 per sq m, about 30 times the previous price.
Koh Kong, which is one of Cambodia's prime seaside cities, has about 1.2 million hectares of land and contains about 24,000 households.
Ever since the end of the Cambodian war in the late 1970s, the government has been trying to resurrect its economy through various means. The Koh Kong project is the latest of these efforts.
Besides relying on foreign aid for economic development, Cambodia, which had a per capita GDP of about $460 in 2006, relies heavily on foreign investment.
In 1994, Cambodia's new investment law was promulgated. The Council for the Development of Cambodia then approved more than $4.27 billion worth of foreign direct investment, according to the United Nations Economic and Social Commission for Asia and the Pacific 2008 business report.
Available data, last updated in 1999, reveals more than 700 foreign projects were approved, with hotels and tourism being the most popular choices for foreign investors, making up nearly 45 per cent of all foreign investment projects.
To encourage investment, the government allowed all sectors of the economy to be opened to foreign investors. In 1999 a sub-decree placed investment restrictions on certain areas, including the media.
The allocation of land is a crucial part of investment. Although only Khmer legal entities and those of Khmer nationality have the right to own land outright, foreign investors are allowed to lease land for up to 70 years.
The primary concern among social advocates and activists in Cambodia is that the present land allocation system may not support sustainable land utilisation or prevent land conflicts arising as a result of new development projects.
The Asian Development Bank's 2004 environmental report noted that although the new Land Law is a landmark in the formal recognition of the land rights of ethnic minorities in Cambodia, enforcement, property rights definitions and titling remain a challenge.
At present, many locals are being evicted from their land, either forcefully or from the lure of attractive land prices.
A government-approved large-scale entertainment project on Koh Yor, which is also part of Koh Kong province, is already suffering a backlash.
''At present, investors are pouring in and land prices are skyrocketing, but it is the poor people or farmers who are lured to sell the land,'' said Bun Tun. ''They might get a lot of money at first, but they spend it without much thought. If this trend goes on, all the land could be sold out over the next five years, and we will end up with a lot more poor people here.''
What's more, a zoning map acquired by an agent source shows that a Cambodian military facility at the top end of the island will be moved down south to make way for planned development.
The island is now divided into zones, including one at the top end which is believed to be Khun Phat's stake.
OPPOSITION CLAIMS
Sam Rainsy, the leader of Cambodia's opposition Sam Rainsy party, claims there is an official document showing Mr Thaksin and Hun Sen's joint development plan for Koh Kong province. His party is preparing to ask the Cambodian parliament to provide a copy of the document.
Sam Rainsy claims the two met occasionally when Thailand's former prime minister made trips from Europe and Hong Kong to discuss and conclude the deal for the investment in Koh Kong.
Sam Rainsy claimed Mr Thaksin has an ulterior motive in building up his base and facilities in Koh Kong - his real intention is to continue his political activities in Thailand.
''Cambodia is the base for Mr Thaksin to get in touch with his supporters in Thailand,'' he said.
Mr Thaksin's close aides, including Pongthep Thepkanchana, his personal spokesman, as well as Mr Noppadon, could not be reached for comment.
Meanwhile, the Office of the Auditor General of Thailand has launched an investigation into Thailand's financial assistance for Road No 48. According to a high-level source at the office, the cabinet's approval of the project bypassed certain state auditing procedures.
''The project involved state funds worth millions of baht, but it was not audited by a responsible agency. We want to learn what they based their decisions on,'' said the source.
Three-in-one: Regional tourism expo opens
Written by Kay Kimsong, SATURDAY, 13 SEPTEMBER 2008
Tourism officials and business people from Cambodia, Vietnam and Laos were to open a three-day exhibition today to promote tourism to the three countries; Tourism Minister Thong Khon said this week. Hundreds of sector players are expected at the event, which is being held in Ho Chi Minh City and is aimed at promoting the three countries as a single tourism destination. "We are now practicing a three-in-one policy," Thong Khon told the Post, adding that travel from Vietnam and Laos has increased since Thailand's political troubles began last month. "We learned that Chinese, Korean, Japanese and other foreign tourists are coming to Cambodia via the Vietnam gateway." He added that Cambodia expected 2.3 million foreign tourist arrivals to the Kingdom this year and is targeting 3.2 millions in 2010.
Sokimex breaks ground on luxury hotel in S'ville
Written by Nguon Sovan , SATURDAY, 13 SEPTEMBER 2008
THE Sokha Hotel Co broke ground Wednesday on 500-room luxury hotel to be built on Sihanoukville's Ochheuteal beach as the demand for high-end accommodations in the seaside town increases.
Company CEO Bobby Toh said that the hotel, which is expected to open in 2010, will provide some 1,200 new jobs and contribute to Sihanoukville's transformation from a once-sleepy backpacker haven to a top-shelf tourism attraction.
"The development will actively contribute to improving the local economy, tourism infrastructure and facilities, as well as creating new job opportunities for Cambodians," Toh said.
He added that the company plans to expand the size of the hotel as demand for more facilities increases.
Sok Kong, executive chairman of Sokimex and the Sokha Hotel Co, told the Post that the beaches in front of the US$50 million hotel will remain public.
"We will never ban the public from playing on the beach when the hotel is finished, and we will not charge a fee for people to use the beach," he said.
Sihanoukville is the anchor of a coastal development plan that is hoped to make the seaside a key tourist destination.
The current Sokha hotel in Sihanoukville is located on the Sokha beach and has 100 rooms. Sokimex has also started construction on another 500-room hotel on Chroy Changva peninsula opposite the Royal Palace in Phnom Penh and is also developing a $1 billion holiday resort on Bokor Mountain in Kampot Province.
Tourism ministry officials say that while the city has enough accommodations for budget travellers, it is facing a shortage of about 1,500 high-end hotel rooms. "The hotel investment is a right decision," said Sam Prumnear, secretary of state with the Tourism Ministry.
Kampot salt trade booms
Written by Khoun Leakhana , SATURDAY, 13 SEPTEMBER 2008
HEAVY rains this year have boosted salt production in Kampot to record levels, harvesters say, adding that they might produce enough to feed the export market to Vietnam.
"If the climate remains good, we will be able to produce as much as 20 tonnes per hectare through early 2009," Ly Seng, a salt harvester, told the Post Monday.
The community owns 4,407 hectares of land and hires as many as 5,000 workers during the harvest season, which runs from November to April.
Last year's harvest took in about 70,000 tonnes of salt.
If current projections are met, this year's production could reach 90,000 tonnes - an increase of nearly 30 percent, Ly Seng said.
Ly Seng is one of a community of nearly 200 salt harvesters in Kampot who have struggled in recent years just to meet domestic demand.
"We can't predict production levels, but we need to produce as much as possible just for our own supplies," he said.
Song Kloeng, chief of distribution for the community, said salt sells for about 400 riels (US$0.10) per kilogram.
In Vietnam, the price increases slightly to 600 riels a kilogram, making exports more lucrative.
A surplus would mean harvesters could supply the export market, he said.
"If we continue to get good rain, we expect our production to be better than ever," he said.
Pursat oil hunt raises queries
Written by Thet Sambath, SATURDAY, 13 SEPTEMBER 2008
AN unnamed private company has begun preliminary studies for oil exploration along Cambodia's National Road 5 near the Tonle Sap Lake in Pursat province, according to local officials.
Plastic wire has been set up around the area, and trucks with power generators are now stationed along the road.
"A private company is looking for oil around Tonle Sap lake," Mao San, director of Pursat province's Department of Industry, Mines and Energy, told the Post Thursday, but he refused to name the company.
"The company has previously evaluated land in local villages, in the mountains and all around the lake," he said. "But they're focusing now on the area along National Road 5."
Men Den, director of the Petroleum Exploration and Production Division of the Cambodian National Petroleum Authority, hesitated to call the company's work "exploration".
"Right now, they are just assessing the soil. Then they will begin exploration," he said. "I will not yet call it exploration. That will come later."
Chea Sieng Hong, secretary of state for the Ministry of Industry, Mines and Energy, said the company has conducted exploration in several provinces around the lake.
"They are looking all around Tonle Sap lake," he said. "The exploration extends all across the country."
Koh Kong cane plant packs it in
Written by Chun Sophal, SATURDAY, 13 SEPTEMBER 2008
US$100 million sugarcane factory that was to begin production in December in Koh Kong province has failed nearly two years after the joint Thai-Cambodian venture was agreed upon, one of its key backers said this week.
Rainy season flooding at the site for the proposed industrial complex is the main reason that the project was abandoned, said Mong Reththy, head of the agro-industry company Mong Reththy Group, which partnered with Thai billionaire Charoen Sirivadhakdi in 2006 to build the factory on 5,000 hectares of land.
"My plan for the factory is now impossible to complete," Mong Reththy, who is also a Cambodian People's Party senator, told reporters on Wednesday.
The project also would have required an additional 5,000 hectares of land from local farmers, Mong Reththy added.
The Mong Reththy Group now plans to turn the land into a palm oil plantation, he said, adding the palm oil project could go forward with future cooperation from Charoen.
The agreement between the two gave the Mong Reththy Group a 51-percent stake in the joint venture, with the balance going to Charoen, who also owns ThaiBev, the maker of Beer Chang.
Mong Reththy told reporters earlier that the factory planned to produce 60,000 tonnes of white sugar, 24,000 tonnes of molasses and 6 million litres of alcohol each year.
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MY PLAN FOR THE FACTORY IS NOW IMPOSSIBLE TO COMPLETE.
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Most of the production was expected to reduce Cambodia's reliance on imported sugar and related products.
The Kingdom spends $70 million each year importing white sugar from Thailand and Vietnam, according to customs figures.
The company has made no announcements about whether it will look for other potential locations.
Thon Sophea, a sugarcane farmer in Kandal province's Korki Thom commune, said he hoped Cambodia would eventually have a large-scale sugar factory.
"I would increase my profits each year if we had a factory," he said, adding that he currently makes about 5 million riels ($1,250) a year from one-half hectare of land.
PM to visit Middle East as ties to the Gulf grow
Written by Sebastian Strangio and Vong Sokheng,
SATURDAY, 13 SEPTEMBER 2008
Cambodia's diplomatic embrace of Gulf states is in full swing, with the PM set to visit the Middle East in January, but just why is the Kingdom so keen to befriend Arab nations?
PRIME Minister Hun Sen will make a state visit to the Middle East next January, in what foreign ministry officials and local Muslim leaders are describing as a consummation of Cambodia's growing economic relationship with the Muslim world, following visits from two Gulf state delegations earlier this year.
"Hun Sen is scheduled to visit the Middle East in January next year," said Ministry of Foreign Affairs spokesman Sin Bunthoeun.
"The aim of the visit is to strengthen our political and economic links with Kuwait, Qatar and the United Arab Emirates."
Friends with benefits
Such links have grown apace with oil-rich Gulf states pledging Cambodia over US$700 million in soft loans and investment already this year.
"We need a relationship with the Middle East because the Gulf states have oil and money, and Cambodia needs soft loans and grants in order to develop its infrastructure," said Ahmad Yahya a government adviser and the president of the Cambodian Islamic Development Association.
For Ahmad Yahya, there is an economic logic to Middle East relations that is hard for the government to ignore.
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We need a relationship with the middle east because the gulf states have oil and money.
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"All the countries in the Middle East are desert countries, and they need to make sure if something happens they don't starve. So they are keen to plant rice [in Cambodia] and export it back to their countries," he said, referring to an emerging new global trend of wealthy non-arable nations investing directly in crops in developing nations.
While critics have warned that such practices risk jeopardising food security in the developing world, the government is busy doing deals, spurred on by the knowledge that its vast swaths of under-utilised farmland make it an extremely attractive trade incentive for largely desert Gulf states.
In April, the Qatari prime minister announced a $200 million investment in Cambodia's agriculture sector, while Kuwait last month pledged $546 million in soft loans to upgrade irrigation systems and roads throughout the Kingdom.
Sith Ibrahim, secretary of state in the Ministry of Cults and Religions, said Cambodia's commitment to religious freedom had further increased its attractiveness to Muslim nations. "We are open to all Muslim countries," he said, adding Cham leaders have played an vital role in breaking the ice with Muslim governments.
"There are 19 Cham associations across the Kingdom, and they are playing an important role in helping improve our relationship with the Middle East," he said, adding that the Chams were benefiting in turn.
"Cham Muslims have received direct benefit from the government's political and economic links with countries such as Malaysia, Indonesia, Saudi Arabia, Egypt and Kuwait," he said.
In addition to its development loans, the Kuwaiti government has also pledged $5 million for the renovation of the International Dubai Mosque at Boeung Kak lake, and the construction of a Islamic studies centre nearby.
Who really wins?
But some are less optimistic about the flow of cash from the Middle East. Son Chhay, chairman of the National Assembly's Commission on Foreign Affairs, International Cooperation, Information and the Media, said the recent growth in the relationship with the Gulf states was a result of two things - Cambodia's valuable land concessions, and its offshore oil deposits.
60,000 hectares of land ceded to private company for rubber
Saturday, 13 September 2008
Written by Cheang Sokha
The Phnom Penh Post
LAND ON ITS HANDS
The government signed contracts with 90 private companies between 1992 and August 2007, ceding 1.178 million hectares of land in 16 provinces. Of these, 37 contracts have been cancelled, with 300,000 hectares reclaimed.
The PM has signed off on the deal for K Thom and Kratie, which is part of the government's vast 'economic land concession' scheme
PRIME Minister Hun Sen has conceded nearly 60,000 hectares of government-owned forests in Kampong Thom and Kratie provinces to a private business owner, according to a letter from July.
The letter, dated July 10 and signed by the prime minister, outlined the government's plan to transfer control of 58,658 hectares of forest to the Ministry of Agriculture, Forestry and Fisheries for its Economic Land Concession program.
The identity of the private company expected to invest in the land has not been revealed, but Kampong Thom Governor Nam Tum said he has received a development proposal from the Thimas Resources Co, which hopes to invest in the land bordering Kratie province.
"We have not yet discussed details of the investment plan with the company," Nam Tum told the Post Thursday. "I'm not sure whether it is a local or foreign company, but they want to invest in rubber production."
Nam Tum said provincial authorities have more than 200,000 hectares of land reserved for concessions to private business owners. Some 66,000 hectares have already been offered to companies producing rubber, cashews and acacia trees, and employing more than 2,000 local residents.
Ny Chakrya, head of monitoring for the human rights group Adhoc, expressed concern that recipients of land concessions will try to steal additional land from local farmers.
People living near the development areas always suffer from such projects.
He said many residents have already tried to protest unlawful land seizures by companies but that local and military police have threatened or assaulted them on behalf of the companies.
Problems for residents
"Past experience shows that people living near the development areas always suffer from such projects," Ny Chakrya said. "Before concessions are given, the government should evaluate the impact on local residents and clearly demarcate the area given to the companies."
An agriculture ministry official, who asked to remain anonymous because he was not authorised to speak to the press, said seven companies have received concessions in Kratie province, while four others have received concessions in Kampong Thom.
"Any company that does not follow the terms of their contract will lose their concession and the land will be reserved for social concessions [to benefit local residents]," the official said.
Cambodia Prepares Formal Casino Legislation
12/09/2008
James Kilsby
GamblingCompliance
Cambodia’s newly re-elected government will enact formal regulations for the country’s coveted casino sector once it takes office later this month, a senior official at the Cambodian Ministry of Economy and Finance has announced.
Chea Peng Cheang, Secretary of State for Cambodia’s Ministry of Economy and Finance, told delegates at this week’s Asian Casino Executive Summit in Singapore that the Cambodian People’s Party’s recent election victory would boost the country’s casino industry, adding that the new government would soon look to submit the sector to formal regulation for the first time in order to foster further growth.
“Our policy is still to develop the gaming industry in Cambodia,” Secretary Cheang said. “A new law on casinos has been drafted and I hope to submit it to the National Assembly soon after the new government comes in towards the end of September.”
Cambodia has issued licences to a total of 27 casinos, primarily situated near the country’s border with Thailand – where casino gambling is illegal. Cheang said the Cambodian government expects to receive total tax revenues of US$18m from its casino industry in 2008 – up from US$16.6m last year.
However, the Cambodian government has yet to pass any formal casino legislation in order to regulate the growing sector. An official at the Ministry of Economy and Finance explained to GamblingCompliance that the new legislation would facilitate the collection of casino taxes, as well as ensure that Cambodian casino operations conformed to international regulatory standards.
Hong Kong-listed NagaCorp is Cambodia’s largest casino operator, reporting profits up 26 percent to US$25.5m for the first half of 2008, according to a recently released results statement. NagaCorp has an exclusive licence to operate a casino within the Cambodian capital of Phnom Penh, although it recently hinted that it would be willing to offer a sub-concession to another operator for gaming within the city.
Cheang suggested that such a sub-concession would likely not prove possible under the terms of NagaCorp’s licence, however. “Under their agreement, NagaCorp is the exclusive operator [of casinos] within 200km of Phnom Penh,” he said.
Cheang added that government’s primary objective would be to use casinos in order to develop infrastructure in the Thai border region rather than authorize inner city gambling venues. But he nevertheless hinted that the government was also prepared to introduce a resort casino in order to attract tourists from further afield.
“Border casinos – that is the government’s main focus, rather than casinos in the city,” Cheang told delegates. “But the next phase will be focus on a destination casino in Cambodia that will attract international visitors.”
It has been rumoured that the Cambodian government may be preparing to offer a casino licence in Siem Reap, the city situated near the Angkor Wat temple that attracted four million foreign visitors last year. If so, the licence would be likely to attract significant international interest, industry insiders say, but only provided an appropriate regulatory structure is put in place first.
Rasmei Kampuchea: JBIC office to move in Cambodia
The office of Japan Bank for International Cooperation, currently located in Thailand’s Bangkok, will move to Cambodia as of October 2008 after JBIC and JICA have merged according to the Japanese government’s new policies. JBIC examines and provides loans for Cambodia’s development projects.
Cambodia Sin Chew Daily: First agricultural census to be held 2009-10
The government plans to conduct an agricultural census between 2009 and 2010 in a bid to improve and strengthen the agricultural statistics system and reduce poverty, said Planning Minister Chhay Than yesterday. It received US$400,000 from the UN’s Food and Agriculture Organization and will contribute to a total of US$969,000 to the project, the minister said, adding that, “we are still seeking US$3.2 million in aids to complete the census’ US$4.3 million budget.”
The Commercial News: Mong Rithy plans to invest in pig farming
The Mong Rithy Group plans to invest US$5 million in a pig farm in the area between Koh Kong province and Sihanoukville. It will import pure-bred sows from England to produce piglets to meet the growing demands of domestic pig-raisers. The investment is aimed at enhancing the economical effectiveness of domestic pig farming.
CPP senator to fund import of Yorkshire breeding pigs
Written by Hor Hab FRIDAY, 12 SEPTEMBER 2008
Officials hope the breeders will help ease Cambodia's reliance on pork imports and provide greater sustainability for local farmers and traders.
A PRIVATE company is set to import pigs from a breeder in Yorkshire, England, in a move that aims to improve agricultural production in Cambodia and satisfy increasing demand among consumers.
Mong Reththy, a Cambodian People's Party senator and co-chair of the Agricultural and Agro-Industry Working Group, said he will spend US$5 million to purchase and import the Yorkshire breeders.
"The only solution for meeting local demand for pork in the future is to import genuine breeders and distribute them to local pig raisers," said Mong Reththy, who heads the agribusiness company Mong Reththy Group.
The company is funding the purchase, Mong Reththy told a meeting of the Swine Business Forum on Wednesday.
"We will import 600 male and female breeders starting from December this year to February 2009," he said.
He added the breeding program would only be successful with the cooperation of local pig farmers.
The Swine Business Forum is sponsored by the Cambodia Micro, Small and Medium Enterprises (MSME) project, a joint effort between the Ministry of Industry, Mines and Energy and USAID that works with pig raisers to improve cooperation, production methods and health standards.
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WE WANT [PEOPLE] TO SEE THAT PIGS ARE A WORTHWHILE AND PROFITABLE ENTERPRISE.
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Chris Hundley, chief of party for Cambodia MSME, said the project's educational efforts have produced dramatic results.
"The pig mortality rate used to be about 50 percent prior to taking them to markets," he told the Post Wednesday.
"Farmers lacked the necessary technical skills. They did not know what medicines to use or how to take care of their stocks."
The current mortality rate is below 10 percent, he said.
Kao Phal, director of the Animal Health and Production Department of the Ministry of Agriculture, welcomed the announcement of the breeding program and said it was an important step towards greater sustainability.
"It will help us better develop the livestock sector and reduce our need for imports from other countries," Kao Phal told the Post.
"Cambodia currently needs about 7,000 pigs per day for domestic consumption, and Phnom Penh alone needs 1,600 per day," he said.
Kao Phal said Cambodia currently imports about 800 pigs each day from Thailand.
"We are cooperating with the private sector and USAID to find the best solution for a sustainable pork supply in Cambodia," he said.
"We want participants in the swine value chain to see that pigs are a worthwhile and profitable enterprise," said Reed Aeschliman, director of general development for USAID.
NCR Launches Next Generation Family of NCR SelfServ ATMs in Cambodia to Help Drive Banks' Revenue and Improve Consumer Satisfaction
Today announced the launch of its new NCR SelfServ(TM) family of automated teller machines (ATMs) in Cambodia. NCR SelfServ ATMs are designed to help drive more revenue by enabling easier introduction of multi-function services and ensuring higher ATM availability to customers, while reducing environmental impact.
ATM availability is one of the key priorities for banks in Southeast Asia, and the NCR SelfServ family with its "self-healing" capability addresses this need. This new ATM family recovers automatically from software failures without intervention, cutting down recovery time previously ranging from three to four hours, to just ten or fifteen minutes, therefore ensuring higher ATM availability.
Matthew Heap, NCR industry marketing director for Asia Pacific, said, "NCR is committed to the Cambodia market and the launch of NCR SelfServ today reinforces the same. The NCR SelfServ family reflects a key NCR strategy to link the consumer experience across the ATM, the Internet and mobility. Clearly, consumers want self-service banking to be convenient, easy to use, secure and always available when and where they want. As consumers do more through the ATM channel, it becomes imperative for financial institutions to ensure their ATM network is constantly up and running. NCR is committed to deliver the best in technology and services and will continue to innovate in changing the way consumers connect, interact and transact with businesses."
Over half of ATM downtime is due to low-level maintenance tasks - often performed by branch staff - such as replacing receipt rolls and clearing cards or paper jams. With intuitive interactive graphic operator panels, NCR SelfServ allows staff to fix more faults the first time and do so more quickly, leading to better availability. NCR SelfServ units include NCR's patented two-sided thermal (2ST(TM)) receipt printers that reduce the amount of paper consumed. Its larger paper rolls and dual receipt roll dispensers also include auto-change functionality.
The new NCR SelfServ family is designed to deliver the most advanced services, including bill payments and no-envelope intelligent cash and cheque deposits, while reducing environmental impact. NCR SelfServ is also the only ATM family to feature protected USB technology. This means that modules needed to deliver future services on ATMs can be added quickly, without compromising the security of the ATM. As 2D barcode technology emerges, bill payments and other transactions that use this technology can be handled on new modules available on NCR SelfServ. Technologies such as contactless card and mobile payment systems can also be easily integrated with NCR SelfServ ATMs to improve convenience for consumers and create revenue-generation opportunities for financial institutions and other ATM deployers.
China Banking Corporation is the first bank in the Philippines and in Southeast Asia to purchase the new ATMs, with an initial order of SelfServ units to fulfill its objectives of providing more convenient banking to its customers.
About NCR Corporation
NCR is a global technology company leading how the world connects, interacts and transacts with business. NCR's assisted- and self-service solutions and comprehensive support services address the needs of retail, financial, travel, healthcare, hospitality, gaming and public sector organizations in more than 100 countries. NCR ( http://www.ncr.com) is headquartered in Dayton, Ohio.
Ho Chi Minh City-Siem Reap Flights to Start Soon
Airliner Jetstar Pacific will offer daily direct flights to Siem Reap from Ho Chi Minh city starting Nov 3, the company announced Wednesday. A 168-seat Boeing 737-400 will initially service the route, followed by an Airbus A320, Jetstar said in a news release.
Siem Reap is a major tourism market, Jetstar CEO Luong Hoai nam said in the statement, and promises “strong future growth in passenger volumes.” Jetstar Pacific, a joint venture owned 30 percent by Jetstar Asia and 70 percent by Vietnam’s Pacific, currently services Siem Reap from Singapore and also services Phnom Penh from both Singapore and Ho chi Minh City.
Jetstar Asia Cambodia Manager Veoung Prayut said Wednesday he was too busy to comment. Khek Norinda, spokesman for SCA, which manages both Phnom Penh and Siem reap international airports, confirmed that Jetstar Pacific had applied to operate the new route to Siem Reap.
Johnnie Walker Cambodian Open To Return In December
September 10th, 2008
BunkerShot.com
The Johnnie Walker Cambodian Open will mark its return to the Phokeethra Country Club from December 11 to 14 with a promise of continuing the growth of golf in Cambodia.
Organisers are confident that the US$300,000 Asian Tour event will once again provide the platform for aspiring amateurs to make an impact at the highly rated Phokheetra Country Club and continue to place Cambodia firmly on the international golfing map.
Asian Tour’s Senior Vice President Gerry Norquist believes that the staging of Cambodia’s national championship bodes well for the future of golf in such developing countries and will act as a launch pad for exciting talents to emerge.
“We are truly excited about the return of the Johnnie Walker Cambodian Open as this event will not only provide the inspiration for Cambodians to learn more about the game but also allow them follow in the footsteps of our Asian Tour professionals,” said Norquist.
As the second from last ranking event on the 2008 Asian Tour season, the Johnnie Walker Cambodian Open will also shape the race for the prestigious Asian Tour Order of Merit title which is currently led by Mark Brown of New Zealand.
Defending champion Bryan Saltus of the United States who secured his maiden triumph at last year’s inaugural event will undoubtedly be amongst the contenders again.
The colorful American celebrated his victory by jumping into the lake next to the 18th green after his final putt last year.
The Johnnie Walker Cambodian Open is the only international golf tournament to be held in the Kingdom of Cambodia and is part of a record 2008 Asian Tour schedule where an unprecedented 30 tournaments with nearly US$40 million are on offer.
Didier Lamoot, General Manger of Sofitel Angkor Phokeethra Golf & Spa Resort & Phokeethra Country Club said: “We truly enjoyed being a part of history last year with the staging of the inaugural Johnnie Walker Cambodian Open and will continue to assist in laying the concerted effort to push the game to continue its growth in our country.”
Wednesday, September 10, 2008
Cambodia, U.S. to sign trade, agriculture, industry deal
PHNOM PENH, Sept. 10 (Xinhua) -- Cambodia and the United States will sign a trade, agriculture and industry deal on Sept. 15 when the U.S. Deputy Secretary of State John D. Negroponte visits here on Sept. 14-16, a senior official said Wednesday.
Negroponte's visit will make the two countries move a step forward for bilateral ties, said Sok An, Cambodian Deputy Prime Minister and Minister of the Council of Ministers.
Cambodian Prime Minister Hun Sen and Negroponte will preside over the signing ceremony of a grant aid project for 24 million U.S. dollars in health sector, he said, adding that the fund of the health project will be operated by NGOs but monitored by the Cambodian government.
During his trip, Negroponte will meet with government officials, opposition leaders and representatives of Cambodia's civil society, a press release from the U.S. embassy said earlier this week.
As the centerpiece of the visit, the deputy secretary of state plans to meet with Hun Sen, it said.
Cambodia's apparel exports to the U.S. totaled 1.16 billion U.S. dollars in the first half of the year, up from 1.13 billion U.S. dollars in the same period of 2007, according to official statistics.
SEZ port project stirs anger
Written by Khouth Sophakchakrya
THURSDAY, 11 SEPTEMBER 2008
Kampot Province
Fishermen in Kampot province complain that a new SEZ project will destroy their livelihoods and forever damage their mangroves and their coastline
MORE than 300 villagers have filed complaints with the Kampot provincial governor to stop a private company from developing a coastal fishing area.
Under a Special Economic Zone (SEZ) agreement with the government, businessman Wing Huor's Kampot SEZ has been filling in coastal mangrove forests with sand, according to local residents.
The project is to eventually include a new port, factory, market, condominium complex and public park located on about 1,000 hectares of coast.
Koem Da, a resident of Roluos village in Boeung Touk commune, said people in the community rely on the area being developed for fishing.
"The pumping has filled in many fishing areas and is taking away our ability to survive here," Koem Da said.
Patrolling the coast
She said local villagers have begun patrolling fishing areas to prevent the company from continuing to pump.
"We are following the law by protecting our environment, but the company claims that what we do is illegal."
Wing Huor was travelling on Wednesday and could not be reached for comment.
"We know the company has a development project with the government that is worth millions of dollars, but they never consulted us before they began about how it would affect our community," Lor Chhean, a fisherman from Prek Thanaut commune, said.
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If the company keeps pumping sand...everything we rely on will be lost.
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Pak Tyram, deputy chief of Treuy Koh commune in Kampot district, said more than 90 percent of people in the commune are fishermen.
"The mangrove forests are where we catch fish, prawns and crab. If the company keeps pumping sand to fill in these areas, everything we rely on will be lost," he said.
More projects expected
Tryy Chhoun, a Kampot coordinator for the rights group Adhoc, said many new development projects have been slated for coastal areas throughout the province, and the government has targeted prime fishing spots for the establishment of SEZs.
"This is Cambodia, not Hong Kong or Singapore. The government should rethink these projects," he said.
Khem Bunheng, director of Kampot's Department of Environment, admitted that the government has targeted beachfront land to attract foreign investment and that such projects would have an impact on local communities.
"Development always affects some people's living conditions, but we can't survive without development," he said.
Sar Sorin, director of the District Fisheries Administration of Kampot, said the government has carefully studied all proposals for coastal development and that whatever problems exist for local villagers will be temporary.
"I believe the villagers and the company will be able to find a way to work together for their mutual benefit," he said.
CIB to streamline investment procedures
Written by Hor Hab and Nguon Sovan
THURSDAY, 11 SEPTEMBER 2008
THE Cambodian Investment Board (CIB) is preparing to implement a new strategy for foreign investment that aims to simplify bureaucracy and improve the quality of services.
"We have already made changes in the import-export sector by adopting a Single Administration Document, whereby authorities check all goods at a single location to save time and money," said Suon Sithy, secretary general of CIB.
Previously, investments required a 28-day waiting period as paperwork moved between various ministries. Under the new strategy, simple investments will require only seven to 10 days for an answer directly from the CIB, Suon Sithy said.
He said more complicated investments related to the environment or politics will still be subject to the 28-day requirement.
"We are walking the right path, though we haven't yet reached our goal," Suon Sithy said. "We are making investment easier by not requiring the same documents be submitted to all relevant ministries."
Suon Sithy said the board has also put in place a risk-management strategy for imports and exports that requires inspection of only suspicious or "irregular" cargo, while simplifying the process for companies that respect the law while meeting the needs of their customers. "We have made progress in promoting Cambodia as an attractive investment target and creating a good business climate for potential investors, but more needs to be done," he said.
Economist Sok Sina said Cambodia's investment laws have improved and current trends show a strengthening investment market.
"We can already see that trade volumes are getting bigger and bigger," he said.
Cambodia's first agency to value business assets opens
Written by Chun Sophal and Nguon Sovan
THURSDAY, 11 SEPTEMBER 2008
Establishment of valuation association a key step in opening the Kingdom's stock market, but some business leaders say it will not be capable of doing the job .
CAMBODIA'S first agency to assess the value of corporate assets opened last week, in what company sources are describing as a key step in establishing a Cambodian stock exchange.
But business figures are sceptical the new body will be able to establish sufficient nationwide transparency in time to meet the stock market's 2009 deadline for opening.
Sung Bonna, chairman of the new National Valuation Association of Cambodia (NVAC), which is supported by the Ministry of Economy and Finance, said the body will play an important role in Cambodia's future growth.
"We will try to push this nascent association to attract foreign investors and to assist in the process of setting up a stock exchange next year," he said, adding that the stock market will not go ahead in the absence of credible asset evaluations.
"If we have professional assessors and good management, the stock market process will be smoother," he said.
In Channy, CEO of Acleda Bank, said the new agency could provide independent assessments for firms wishing to register on the Kingdom's stock market.
"We need an assessor that has enough independence to determine the accurate value of a company's assets. This concept generally exists in other countries," he said.
'2012 more realistic'
But Nguon Meng Tech, director general of the Cambodian Chamber of Commerce, said he does not think the association will be successful.
"I do not believe that they are capable enough for this work for the time being," he said.
He added that the 2009 deadline for a Cambodian bourse was little more than a pipe dream.
"Cambodia does not have enough human resources and experts," he said, adding that 2012 was a more realistic target.
In Channy said Acleda currently assesses its own assets and is unlikely to use NVAC until it establishes more branches across the country. "We do not reject the use of the service, but we trust our own assessment," he said.
Likewise, Kong Triv, CEO of KT Pacific Group, said that he has not considered using the NVAC to evaluate his company's assets. "We will wait and see how independent [it] is and how it builds confidence, and then we will consider it," he said.
Sung Bonna admitted the NVAC was untested, but he said he was optimistic it will valuate properties accurately. "The association will seek training from foreign experts to make sure that the evaluation is internationally acceptable," he said.
Cambodian Economic Association President Chan Sophal said Cambodia must have a property evaluation association that is fully independent, "otherwise companies could lose confidence".
FAMILY SECRET
The requirement that companies declare their assets is widely believed to be one of the biggest obstacles to establishing Cambodia’s stock market, sources say. Most enterprises that could list are family-owned and guard the value of their businesses.
ADB to submit plan for $38 mln project in Cambodia
PHNOM PENH, Sept. 8 (Xinhua) -- The Asian Development Bank (ADB) will submit next month to its board of directors a proposal for an emergency food aid project following the Cambodian government's request for 38 million U.S. dollars to ensure food security between 2008 and 2011, local newspaper reported Monday.
The project would benefit more than 500,000 people in five provinces and the Tonle Sap river and some poor areas in Phnom Penh, Arjun Goswami, the bank's country representative, was quoted as saying by the Phnom Penh Post.
He said worldwide price hikes for food and fuel have pushed traders to sell their rice to neighboring countries, thus driving down domestic supply.
Tuesday, September 09, 2008
Kuwait agrees "Open Skies" accords with Cambodia, Laos and Myanmar
09-Sep-08
Peanuts! Online (Australia)
Talks led by a delegation of the Directorate General of Civil Aviation (DGCA) during an official visit to the Kingdom of Cambodia, the Republic of Laos and the Union of Myanmar have resulted in the signing of Open Skies agreements.
The visit, from 19-27 Aug-08, was headed by Dr. Ismail Al-Shatti, Adviser to the Diwan of the Prime Minister and followed up on the recent tour by H.H. the Prime Minister Sheikh Nasser Al-Muhammad Al-Ahmad Al-Jaber Al-Sabah (may God protect him) to numerous Asian countries from 24 July-16 Aug-08.
The signing of the new agreements frees air transport between Kuwait and these countries from all operational constraints, enabling their national airlines to operate any number of flights to destinations within those countries using aircraft of any type and passenger capacity.
The new agreements for air carriers – the Kuwaiti operator to all international airports in those States in particular – are based on the principle of multiple airlines designated as authorised operators between Kuwait and those countries.
The DGCA delegation was headed by Mr. Nabil Al-Zamel, Deputy Director General for Aviation Safety and Air Transport and Mr. Abdullah Al-Rajhi, Chief of International Affairs and Air Transport Management. The signing of the Convention on the organisation of air services between Kuwait and each country was carried out in the presence of all members of the Kuwaiti delegation and included a Memorandum of Understanding covering all the agreed issues.
The new conventions are consistent with the Kuwaiti government policy to liberalise airspace with countries around the world. The move aims to boost links between Kuwait International Airport and international airports worldwide and foster closer bilateral aviation relations with friendly nations, providing increased options for travel in Kuwait's air transport market.
Processor could hurt shrimp supplies
Phnom Penh Post, by Nguon Sovan
A new shrimp processing plant slated to begin operations early next year has raised concerns that local shrimp stocks won’t be adequate to supply the facility, Sam Peou, president and CEO of Nautisco Seafood Manufacturing, told the Post.
The Canada-based firm borke ground on the US$4 million Sihanoukville plant, capable of processing 30 tonnes of shrimp daily, in January and expects construction to finish in January 2009, Sam Peou said.
“We are very concerned about the availability of shrimp in Cambodia,” he said Sunday. “We can’t fish 30 tonnes of shrimp per day from local waters, so I expect to buy farmed shrimp from neighbouring countries.”
He said the palnt expects to get only 20-25 percent of its supply from local sources and the rest will be imported from Vietnam, Thailand and China, depending on quality and price.
Sam Peou said he hopes local aquaculture farmers can also help supply the plant. “We want the government to encourage farmers to raise more shrimp,” he said.
But one government official said an increase in local production was unlikely.
“We have no plans to promote shrimp farming,” Nao Thuok, director general of the Cambodian Fisheries Department, told the Post Sunday. “If we tried, then people would cut down the mangrove forests and devastate the environment.”
Nautisco plans to export between 300 and 500 tonnes of shrimp monthly in its first year of operations to markets in Japan, Canada, the US, Russia and Eastern Europe.
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In Takeo: there are 24 places for producing baby fish and lobsters including 13 places of 4,557 families in Tramkak district alone.
Monday, September 08, 2008
Govt's claim of production rises due to aquaculture 'fishy': SRP
Monday, 08 September 2008
Written by Nguon Sovan
The Phnom Penh Post
"We already know that our fishing resources are nearly gone" - SRP MP Yim Sovann
GOVERNMENT claims that the fishing industry has shown steady growth because of aquaculture has drawn criticism from the opposition Sam Rainsy Party.
Nao Thuok, director general of the Cambodian Fisheries Administration, speaking last week at a workshop attended by local and provincial officials, said Cambodia's fishing industry output has increased 18 percent year-on-year.
"About 35,000 tonnes of fish, including 5,000 tonnes of non-farmed fish, were caught last year, and that number is expected to reach 40,000 this year because of more reliance on aquaculture practices," he said.
But SRP lawmaker Yim Sovann called the figures "distorted".
"The increased output of fish exists only on paper," he told the Post last week. "In practical terms, fishing resources are getting poorer and poorer due to rampant illegal fishing in collusion with corrupt government officials."
Nao Thuok admitted Cambodia still lags far behind regional neighbours in total tonnage of fish caught annually. Vietnam processes about 2 million tonnes each year. That number is 600,000 in Thailand and 60,000 in Laos.
He said fish provide as much as 75 percent of the protein intake of all Cambodians, who eat about 50 kg individually each year.
With a population of approximately 14 million, Cambodia needs about 700,000 tonnes of fish annually.
"The government is encouraging greater investment in fisheries and aquaculture to ensure the sustainability of the sector," Nao Thuok said.
Despite a growing domestic need, Cambodia exports fish throughout the region, including to Australia, Hong Kong, and the United States.
"Some 20,000 tonnes are exported every year, at a value of about US$40 million," he said.
Cambodia, "environmentally sustainable" tourism to save Mekong dolphin
09/06/2008
AsiaNews.it
CAMBODIA
Overfishing, war, and pollution have decimated the dolphins, and only a few dozen of them are left. Environmentalists have begun a project aimed at contributing to the development of the villages and to saving the dolphins, but their numbers continue to diminish.
Phnom Penh (AsiaNews/Agencies) - Saving the few dozen freshwater dolphins still remaining in the Mekong River, and helping the local population by guaranteeing them a source of livelihood: this is the aim of the "ecotourism" project begun in the border area between Laos and Cambodia by the Cambodia Rural Development Team (CRDT), which has the twofold objective of protecting wildlife and providing an alternative source of income for the inhabitants of the villages.
For centuries, the waters of the Mekong River - which crosses China, Laos, and Cambodia, before reaching the ocean in Vietnam - were the uncontested habitat of thousands of freshwater dolphins. The Sino-Indian War and the increase of industrialization, together with high pollution levels, have decimated the species, only a few dozen of which survive; 71, according to the latest count provided by the World Wildlife Fund.
The village of Sambor, in the north of Cambodia, is one of the places selected by the CRDT as a model of environmentally sustainable development: tourists are given the opportunity to live in contact with the local population, to help the inhabitants protect the natural habitat of the dolphins, and to teach a little English to the children. The most frequently requested activities include well digging, sewer construction, and work in the fields.
The experiment promoted by the activists is intended to save the dolphins from extinction by radically changing the habits of the inhabitants of the village, who for decades have used aggressive fishing methods like explosives and high-capacity nets. Now the freshwater dolphins are seen as a resource to be "exploited" in order to attract foreign capital and tourism; the visitors pay 60 US dollars for three days in contact with nature, and the money is used to support the local population. In a country in which half the population lives on a dollar a day, the inhabitants of the village earn five dollars a day by providing food (two dollars) and lodging (three dollars) for the visitors.
But recent studies have demonstrated that if the benefit for individuals is beyond question, the same cannot be said for the dolphins: in spite of a small increase in their numbers in the initial phase of the project, it is not yet clear whether this is truly effective for preserving the species. Scientists affirm that a new and not yet identified disease is spreading rapidly, killing the offspring. Researchers fear that the new virus - caused by pollution in the water, infested with chemical agents and the runoff from gold mining projects - could soon lead to the total extinction of the dolphins.
Kampot farmers try to tap into Asian birds' nest boom
As the price of swallows' nests rises on the international market, govt is encouraging farmers to begin keeping the birds
Swallows swoop around a concrete bunker at a makeshift swallow farm in Kampot province on Friday.
KAMPONG BAY - In this village on the outskirts of Kampot town, the delicate chirp of swallows nesting comes not from the actual winged creatures, but are instead piped through loudspeakers attached to the side of squat concrete bunkers.
The bizarre and somewhat unsightly constructions are part of a project that government officials hope will serve the dual purposes of commerce and conservation: the harvesting of swallows' nests.
Across Asia, demand for swallows' nest - used primarily is the manufacture of high-end alcoholic drinks - is rising, with one kilogram of the material fetching as much as US$4,000 to $6,000, according to Deputy Director of Forestry Administration Chea Samnang.
In a bid to boost the incomes of farmers, many of whom manage to just scrape by on subsistence harvests of rice, officials are encouraging them to pursue swallows' nests on a commercial basis.
"Swallow farming not only helps us to protect and preserve the swallow population in Cambodia, it will also help us to increase the income of rural farmers," Chea Samnang said Sunday, adding that most of the nests from Cambodia are exported to Thailand, Malaysia and China.
The government has so far targeted farmers in Koh Kong and Kampot provinces, as well as Sihanoukville, Chea Samang said.
Koh Kong provincial governor, Yuth Phouthang, a swallow farmer himself, said that in 2005 he invested $100,000 in land and on the construction of swallow shelters to attract the birds.
Over the first year of operations, he harvested around two kilograms of nest and has since expanded, building shelters in Sihanoukville and Kampot.
"Now I can collect five kilograms of swallow nest [at one time], and I can earn more than $100,000 a year," Yuth Phouthang said. "I have only spent money on creating the swallows' shelter, but I do not pay for swallows' food," he added.
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...People say swallows' nest is good for the lungs and skin diseases.
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He said that he hopes to increase his profits, taking advantage of the swallows' thrice-yearly nesting habits.
It takes around 100 nests to make a kilogram of salable birds nest product, and the number of nests the swallows can produce depends on how much food they have access to.
Koy Luon, 72, a villager in Kampong Bay's Sovann Sakor village, said swallows make their nest from tiny tree branches, dry grass and mud.
The nests themselves are not edible, but if brewed into a drink, the mix is purported to have healing properties.
"People say swallows' nest is good for the lungs and for various skin diseases. It is beneficial to the elderly," he said, adding that he collected about 100 swallows' nests over the first six months of this year.
New exports vital to aid sluggish garment sector
As increased competition and a shortage of workers continue to affect garment exports, some see diversity of trade as key to economic growth
Tracey Shelton
Cashew farmers weigh their crop in Ratanakkiri province in this file photo.
TEXTILE TURMOIL
Garment exports dropped 46 percent in the fourth quarter of 2007, capping off a dismal year in a key sector, according to figures from the Ministry of Commerce, which is pushing the US, Cambodia’s largest customer, to lower import tariffs.
Cambodia must diversify its exports to compensate for an ailing garment sector ravaged by competition from Vietnam and China, Sok Hach, president and research director of the Economic Institute of Cambodia (EIC), told the Post last week.
"As we see greater competition in the region, products such as organic rice, cashew nuts, rubber and tourism will be vital to generating alternative employment for affected garment workers," Sok Hach said.
"We want to promote these products as a means of diversifying Cambodian exports," he added.
Robust foreign trade will play a critical role in Cambodia's economic growth in coming years, Sok Hach said, adding that trade already comprises some 50 percent of current fiscal expansion.
Mao Thora, undersecretary of state at the Ministry of Commerce, agreed that the agriculture and tourism sectors should be a priority for diversification, but denied the garment sector was weak.
"It is still strong and continues to rank fourth or fifth in the US market," she said. "But we are facing a shortage of nearly 20,000 workers as agricultural profits continue to rise. Some workers are choosing to grow crops rather than remain in the garment industry."
Cambodia's garment industry is the country's largest source of income, generating 80 percent of all foreign exchange earnings and employing an estimated 350,000 workers.
However, Cambodia exported US$1.16 billion in garments to the United States in the first quarter of 2008, an increase of 2.2 percent over the same period last year.
Moreover, garment exports for all of 2007 showed an annual rise of only 2.2 percent, representing $2.9 billion in trade revenue, compared with previous averages of around 20 percent.
Targeting new markets
Ricarda Rieger, deputy country director of the UN Development Program, told a group of about 50 trade specialists from Cambodia, Bangladesh, Laos and Nepal at a workshop last week that the country has the potential to boost economic growth by targeting new international markets.
"Cambodia has a vast assortment of natural resources that can be used to support a diversified export economy," she said.
"Oil and gas holds considerable potential, the mining industry is on the rise and forestry and agriculture are also interesting sectors," she said.
However, sustaining trade development in Cambodia will require strict adherence to government standards, Sok Hach said.
"The rules and regulations must be respected and promoted," he said.
Micro Finance grew in rural area
672 725 Cambodians has taken credit in the first semester this year at 73% growth rate, according to NBC. While 166,588 has deposite their money in the banks, at 31 % growth rate.
The total loan was $207 million while the deposit was $5.6 million.
Currently, Cambodia has 41 micro finance institutions but only 17 were registered. The total capital of all is $682 million.
Positive start for the new taxi company
One month after the first rides of his 12 taxis, Lim Sovann, Executive Director of the Global Cambodia Trade Development Company gives a positive assessment. “We strongly believe that our business will become successful over a long term period. We don’t expect to make any money during the first year”, explains the director who considers his prices and the quality of service encouraging. Every day, between 200 and 300 customers are using the taxi service. For the moment the fleet includes 12 cars.
This taxi company is a Sino-Khmer joint venture. Its particularity: each vehicle is equipped with a taxi meter. The first two kilometres cost one dollar, then every 200 meter is charged 10 cents. The director of Global Cambodia Trade Development declares having invested more than a million dollars. By the end of September, 60 new Chinese-made cars will join the taxi fleet.
Cambodia Ups Textile Export to US: Report
By Stephen Kurczy, the Cambodia Daily
Cambodia’s apparel exports to the US increased over the first half of 2008 despite an overall decline in the US’s importation of apparel, according to a report released Tuesday.
Because of low overhead costs and cheap labor, Cambodia’s gross apparel exports to the US rose 2.15% during the first half of this year compared with a 4 % decline in worldwide apparel exports to the US, according to the Emerging Textiles, a US publication that complies and analyzes data on the textile industry.
The US has sharply increased Cambodian-made hosiery, cotton dresses and cotton sweaters, the study found in data supplied by the US Commerce Department.
Cambodia’s apparel exports to the US totaled $1.16 billion in the first half of the year, up from $1.13 billion in the first half of 2007, according to Emerging Textiles.
At the same time, however, Emerging Textiles said the unit value of Cambodia’s apparel exports to the US had decreased by 2 percent, meaning that Cambodia is selling more apparels but for lower prices.
By contrast, US apparel imports have declined from China by 4%, from the Philippines by 17.2% and from Thailand by 1.8%, according to Emerging Textiles. Vietnam, however, saw exports increase 25%, Bangladesh saw exports increase 6.7% and most Central Amercian countries also saw exports rise.
Census: Nation’s 13.4 Million Seek Elbowroom
By Douglas Gillison
And Kim Chan
the Cambodia Daily
With 70,482 inhabitants, Pailin, the town on the Thai border built for and by the Khmer Rouge, has more than tripled in size since its rebellion ended in 1998.
Oddar Meanchey province, with 185,443 people, is also three times more populous than it was when Pol Pot died there that year.
Battambang province, with a little more than 1 million people, has grown by 30 percent in the period.
After 10 years of peace, Cambodians are not only more numerous, they are spreading north, northwest and northest, to plant cashews, build roads, clear mines and dig for gold, according to provisional figures released Wednesday from this year’s second-ever decennial government census.
Where there were four Cambodians, there are now about five: As of midnight on March 3, there were a total of 13,388,910 Cambodians, a 17 percent increase from 1998, with an annual growth rate of 1.55 percent, slightly higher than the regional rate of 1.3 percent.
Compiled by more than 30,000 census takers who interviewed Cambodians in 2.8 million households over 10 days in March, the census results have yet to be mined for data on age, fertility, mortality and migration, the things that help tell government planners how to project population figures for the years between censuses.
But one dividend of a decade of peace is already clear: Cambodia’s smallest, remotest populations are growing the fastest, and, within these places, the rural communities are rising faster. Areas once too dangerous even for census takers are now increasingly inviting for migrant populations, the census found.
Of the 10 fastest-growing provinces, six are inhabited by fewer than 100,000 people. Three quarters of Pailin’s population, the fastest-growing area, live in rural areas outside the municipality, and their numbers are rising yearly at 13.37%, more than twice as fast as urban Pailin (6.11%).
On the other hand, the most populous province, Kompong Cham, with 1.68 million mainly rural people, is growing at only 0.44% a year.
As a whole, the growth rate in Cambodia’s urban population (2.55%) is still higher than in the rural population (1.3%), and one in five Cambodians now lives in an urban area, which is defined as a location with a population density greater than 200 people per square kilometer and where fewer than half the men work on farms.
But the numbers still tell a story of migration from bigger places to smaller ones.
“Stung Treng is bustling with activitiy due to rapid expansion of agro-industry plantations […] and construction of a road and bridges connecting it with neighboring Laos,” the census report’s authors wrote.
“Kompong Cham and provinces that have shown marginal increase in population during 1998 to 2008 are likely to be the out-migrating provinces of […] the economically active population,” they said.
Differing professions are also drawing the sexes apart: Men are drawn to manual labor in remote places while Phnom Penh, Takhmau town and Takeo province are now teaming with young women, thanks to the employment opportunities offered by garment factories.
For every 100 women, there are 105.5 men in Pailin, 104.9 in Mondolkiri, but only 88.2 in Phnom Penh and 88 in Kandal.
The implications for policy prescriptions are not subtle: Government and administration must extend to places that previously were only sparsely inhabited.
Created in 1999, the once wartorn province of Oddor Meanchey, for example, still has no courthouse.
Finance Ministry Secretary-General Hang Chuon Naron said Thursday that the findings had not taken the government by surprise.
“The reallocation of resources is happening already,” he said, adding that the roads under construction in Pailin and Oddar Meanchey, the very projects drawing migrant labor, were planned in expectation of growing populations in those areas.
The national budget is apportioned both by the ministry and by province, he said.
“There is no bias in terms of the allocation of resources. It’s on an equitable basis,” he said.
San Sythan, director-general of the National Institute of Statistics, which produced the census, said Thursday that the census figures had fallen short of projections. The government had projected a total of 14.6 million Cambodians for 2008, 9% more than the census actually found.
San Sythan said this was due in part to the rising levels of wealth and years of double-digit economic growth.
“With this economic development, the [population] growth rate is decreasing. When people have money, there is family planning,” he said.
Yim Thin, deputy governor of Oddar Meanchey province, said Thursday that Cambodian authorities had long tried and failed to entice people to move to his region.
“Since the time of [then Prince Norodom Sihanouk], the government wanted people to come live in border provinces and sometimes promised to provide them oxcarts and cows,” he said. “Not many came. Now they come by themselves.”
The new lure of Oddar Meanchey, he said, has proven to be the promise of cheap, plentiful land.
“People are coming here from all provinces, chiefly from Svay Rieng and Prey Veng. They have family who are soliders, and they come as whole families. They say they have no land and come to claim land here,” Yim Thin said.
Cambodia's population approaches 14 million
PHNOM PENH, Sept. 4 (Xinhua) -- Cambodia's population is approaching 14 million people, more than half of whom are women, according to preliminary results from the first general census, local media reported Thursday.
"According to the preliminary results, the population of Cambodia stood at 13,388,910 at midnight on March 3, 2008, consisting of 6,495,512 males and 6,893,398 females," Deputy Prime Minister and Minister of Interior Sar Kheng, who also chairs the National Census Committee, was quoted as saying in the Phnom Penh Post.
The provisional figures at the national level indicate that the total fertility rate and growth rate of the population has slowed down as predicted, he added.
The census also found that while Cambodia remains a largely rural country, more people were living in cities, the newspaper said.
The average household contained 4.7 people, according to census figures.
The projected annual growth rate in 2010 is expected to be 1.54percent, still higher than that of East Asia, which stands at 1.3 percent.
Rise of machines could spur economic boom
As Cambodia's agricultural sector moves to compete in a robust global market, farmers are embracing new technology over traditional methods
Proposed improvements to Cambodia's agricultural infrastructure and a growing reliance on agribusiness as a principal engine of economic growth are changing the way farmers produce and market their goods.
Srey Bun Doeun, who earned a master's degree in agricultural engineering after studying in Russia and Thailand, spent more than a decade waiting to find a market for his skills in the production of machines that simplify labour-intensive tasks and generally make life easier for farmers.
"I noted that Cambodian farmers have begun changing their habits," Srey Bun Doeun said. "They are moving from subsistence farming to large-scale production to compete in Cambodia's growing agro-industry."
Those changes could mean big profits for Srey Bun Doeun, a father of two whose line of homemade agricultural machines includes a waste shredder, grass cutter, cassava peeler and peanut sheller.
Shortage of farmhands
Srey Bun Doeun said his products could soon be in high demand because many farmers face a shortage of manpower to cultivate and harvest their land.
"Some farmers have hundreds of hectares of land but can't find enough workers to harvest crops," he said. "My aim is to replace people with machinery in order to increase the capacity and efficiency of the process."
________________________________________
A strong and growing agricultural sector will lead to growth in other sectors as well.
________________________________________
The budding industrialist works with a partner in a Meanchey district workshop that can produce as many as 30 machines each month. His prices range from US$2,500 to $3,000 per machine.
Ngov Sroy, a farmer in Kampong Thom province, purchased one of Srey Bun Doeun's waste shredders to make effective micro-organism (EM) organic fertiliser for his 30-hectare cashew plantation.
He said the production of EM materials is time-consuming but much safer for the environment than chemical-based fertilisers.
"My waste shredder is a locally made machine that can replace 20 to 30 workers," he said.
The growing popularity of agricultural machines follows a push by government officials to modernise the Kingdom's agricultural sector in the wake of booming exports.
Last month saw the beginning of negotiations with Kuwait for nearly $600 million in development loans to upgrade irrigation systems throughout the country. As agriculture plays a larger role in the national economy, farmers must increase efficiency and output to compete.
Yang Saing Koma, director of Cambodia Center for Study and Development in Agriculture, said agriculture has become the foundation of economic growth in the Kingdom, and new agricultural technologies will play a vital role in sustaining that growth and strengthening the economy as a whole.
"A strong and growing agricultural sector will lead to growth in other sectors as well," he said.
New techniques needed
Kasie Noeu, former secretary of state for the Ministry of Justice and current president of the Peace and Development Institute, said traditional agricultural techniques can no longer sustain the necessary market growth.
"It is the right time for farmers with large-scale operations to take advantage of new machinery. Otherwise, they will miss an incredible opportunity," he said.
He said many Cambodian workers have turned to other labour markets in South Korea, Thailand and Malaysia for jobs in agriculture or construction, leaving a shortage of available manpower at home. "At my own farm, I can't find enough people to harvest bananas for my cattle, so I'm currently negotiating for a banana tree cutter."
Kasie Noeu said he strongly advocates innovations in agricultural engineering and hopes that new products for planting, harvesting and processing will soon be available.
"If we can employ all these machines on farms across Cambodia, our agricultural output would increase more than 100 times what we have been able to produce by traditional methods," he said.
28.5%
of GDP comes from the agriculture sector
As the Kingdom moves to develop its agro-industry sector, the government is trying to push farmers to abandon traditional methods.
Srun Darith, deputy secretary general of the Council for Agricultural and Rural Development, said agriculture comprised 28.5 percent of Cambodia's GDP in 2007, but that a shift toward a new "era of machines" could see that number rise in coming years.
He said Cambodia produces more than 6 million tonnes of rice each year, only 4 million of which is consumed by the domestic market.
"If we could use machines for agriculture and use all available land, Cambodia could produce as much as 15 million tonnes of rice in a year," Srun Darith said.
Openness to trade is transforming Cambodia's capital
By Sonia Kolesnikov-Jessop
Published: September 4, 2008
The three-story showroom for Gold Tower 42 is as imposing as the gold-tinted residential structure that, once it is completed, will dominate Phnom Penh's skyline.
A security guard greets a visitor's car and ushers the guest into a large reception area, worthy of a nice hotel. Before going up the carpeted grand staircase, the guest is politely asked to take off his shoes and don a pair of comfortable slippers.
Once upstairs, a saleswoman stands in front of a large scale model and talks with animation about the features of Cambodia's first residential tower, including the golf practice range, the karaoke lounge and the library, before leading the visitor through the three model apartments on the third floor.
It looks as if no expense has been spared on the showroom - but then the developer, Yon Woo of South Korea, is selling a luxury dream to the few members of the local elite and foreign community eager to test the waters of a property market that appears to be doing surprisingly well, despite the ever-present reminders of Cambodia's Third World poverty.
Commercial spots, available on YouTube, have been stressing the luxury of the project. Agents say buyers have been attracted by features like the high-tech security system, home automation technology, walk-in closets and fully fitted kitchen. And while the apartments would not quite match up to high-end places in Singapore or Hong Kong, they are luxurious by Cambodian standards.
But then they are not as expensive as apartments in those Asian cities either. Unit size varies from 153 square meters, or 1,647 square feet, for a three-bedroom apartment to 336 square meters for a five-bedroom, with prices ranging from $460,000 to $1.6 million. (Cambodia's official currency is the riel but the U.S. dollar is widely accepted and real estate is routinely valued in dollars.)
Nov Ratana, a sales manager for Yon Woo Cambodia, says 60 percent of the Gold Tower 42's 360 residential units have been sold, many of them to foreigners, mainly Koreans and Chinese.
When the $240 million, 42-story development is completed in 2011, it will offer sweeping views of Phnom Penh toward the capital's bustling riverfront. But it will not stand out as the city's only skyscraper; several other high-rise developments also are planned or already are being built.
In mid-June, ground-breaking began on an even taller building, the 52-story International Finance Complex. This $1 billion, 737,000-square-meter project will include a main office tower surrounded by several smaller glass-and-steel structures housing 275 serviced apartments, 1,064 apartments and even a small international school.
Other projects being developed include the 33-story De Castle Royal Condominium, the 31-story River Palace 31 and the Phnom Penh Sun Wah International Financial Center, a mixed-use development of offices, a five-star hotel, shopping mall and three residential blocks.
While the towers have provoked some controversy - they will radically change the profile of this low-rise city and add some flashes of modern architecture to its faded colonial elegance - they also are being touted as a symbol of the country's speedy growth. Cambodia's economy has increased at an annual average of 11 percent over the past three years as the country has climbed back from decades of political instability.
Foreign investment, especially from South Korea and other countries in North Asia, has been key to this recovery, surging to 8 percent of GDP in 2007 from less than 1 percent in 2004.
Most of the new construction projects are headed by Korean construction and investment companies. The biggest foreign direct investment to date - $2 billion - is being made by World City of South Korea, for Camko City, being built on a 119-hectare, or 294-acre, site on the northwestern outskirts of Phnom Penh.
The project, started in 2005 and scheduled to be completed in 2018, will include residential, commercial and public structures.
Opening the country to foreign trade and attracting tourists, especially to the temples of Angkor Wat, has supported the expansion and even produced the beginnings of a middle class.
As a result, property prices have experienced their own boom in recent years. Charles Villar, general manager at Bonna Realty Group, the largest real estate agency in Cambodia, estimates that property prices in Phnom Penh rose between 50 percent and 80 percent in 2007 and between 80 and 100 percent so far this year, depending on location. Land prices in the city center have skyrocketed this year to more than $3,000 per square meter from about $500 a square meter in 2003.
Meanwhile, rental prices have increased 20 percent to 40 percent over the past year, Villar said. A large villa with five to seven bedrooms in a good location will rent for about $5,000 a month, while a two-bedroom place will average $1,300 to $1,500, depending on location.
Despite the sharp increases, prices still compare favorably with those in Bangkok, where a four-bedroom villa would cost more than 200,000 bhat, or about $6,000, a month. And the Cambodian sites are attracting plenty of speculative interest from foreign buyers, mostly from within the region.
Bretton Sciaroni, a senior partner at the law firm of Sciaroni & Associates in Phnom Penh, says foreigners still cannot buy land, but they can buy leasehold properties - typically a 99-year lease or a 70-year lease with an option to renew for another 70 years. The latter formula "was found in the 1994 investment law and, although it dropped out of the law when it was amended, the formula is still used," he said.
There are rumors that the laws will be changed to allow foreigners to buy land outright but that is unlikely, Sciaroni added. "If anything, earlier this year, the prime minister made it clear in various statements that foreigners will not be allowed to hold property freehold. For this to change, not only would laws have to be amended, but the Constitution as well," he said. "So we do not expect the law to change anytime in the near future."
SCT still bullish on Cambodia
NAREERAT WIRIYAPONG
SCT Co Ltd, an international trading arm of Thailand's Siam Cement Group, expects to increase its turnover in Cambodia by 25% from last year to $50 million this year despite border tensions between the two countries. SCT managing director Kalin Sarasin said the potential for the trading business with Cambodia was tremendous as few products were manufactured locally.
Thailand is Cambodia's third biggest trading partner with value of $550 million in 2007, behind China ($750 million) and Vietnam ($650 million), he said.
''Cambodia is a net-importer country with most of products shipped from Thailand, Vietnam and China. The trading business is shown to have the highest growth, expanding relative to stable gross domestic products (GDP) growth which is expected at 7.5% in 2008.''
Major products imported to Cambodia are construction materials such as cement, roofing materials, ceramic tiles, sanitaryware and steel.
Its subsidiary, Cementhai SCT (Cambodia) Co. also exports waste paper and aluminium scrap from Cambodia to supply many factories in Thailand, he added.
The construction business, according to Mr Kalin, is among sectors that have shown strong prospects in the neighbouring country along with oil and gas, plantations and agro-industries and labour-intensive ventures such as garments and logistics.
In every sector, many foreign and local companies have stepped up investments in Cambodia. Infrastructure is being built to lure more investors, he said.
Office buildings and serviced apartments are in high demand for expatriates. Several South Korean developers are investing in condominiums in Phnom Penh while the construction market is growing dramatically in Siem Reap and Kampong Som, added Mr Kalin.
''There are many oil and gas exploration activities in Cambodia, boosting the demand for related materials such as piping and structural steel for rigs,'' he said.
In the agricultural sector, Chinese and Thai investors are investing in plantation projects in Cambodia. Major crops are rice with tapioca, palm oil, and rubber becoming more attractive for investors.
Mr Kalin played down the impact of the border dispute over the Preah Vihear temple, saying it would not last long.
''The dispute has not affected our operations much,'' he said. ''With our strong distribution network and many local staff, we are ready to move on with our business plan there and adapt to all situations.''
Siam Cement (SCC) shares closed yesterday on the SET at 158 baht, unchanged, in trade worth 83.9 million baht.
Interview In Channy, President and CEO, Acleda Bank
“With our operation in Laos, we have truly begun to be a regional bank”
By Kim Natacha
Economics Today
Volume 2, Number 22, September 1-15, 2008
ACLEDA Bank scored a remarkable performance with a 46-percent increase in net profits after taxes to US$ 9.7 million in 2007, according to its annual report. The former NGO, which made a successful transition into a commercial bank in 2003, has its sights set on becoming a market leader and regional player.
But as the banking sector becomes more and more competitive, Acleda Bank will have to vie against other dynamic commercial banks.
In Channy, Acleda Bank’s president and Chief Executive Officer, talked with Economics Today Aug. 22 about Cambodia’s banking sector, his bank’s performance and future plans.
Q: Economic growth this year is projected to slow down from 10 percent last year to 7 percent because of a slowdown in the garment sector. What are the sectors that will support growth this year then?
A: Even if the garment sector is expected to slow down in 2008, the number of tourists is up and forecasts from agriculture crops are good. So those two sectors will drive the economy this year, with the garment sector to a lesser extent.
This is a good year for agriculture because although the rainy season has been late, rainfalls will be enough for crops. Government investments also have helped to improve irrigation systems in recent years.
And as a bank, we’ve seen that in the provinces of Kompong Thom, Takeo and Battambang, which are big producers of rice, loans were mostly provided in agriculture. In the banking system, loans to agriculture in 2007 were around 4.9 percent of total loans.
In ACLEDA, this kind of loans represented 11.3 percent of its loan portfolio. This year, we expect they will be more than 12 percent of its loans.
Q: As a bank, you have observed a slowdown in economic and business activities?
A: Actually the need for loans is there and it continues to grow. But regulations by the National Bank of Cambodia (NBC) have slowed down lending. The increase on reserves requirements is one of the measures. Another one is a ceiling put on real estate loans. The NBC limited them to 15 percent of banks’ loans portfolio.
Q: So will these measures by the NBC affect your bank’s performance?
A: I don’t think so because in terms of lending to real estate, housing loans reached about 43.8 million at the end of July. It is less than 10 percent of our total loan portfolio, which is about US$455.7 million at this date.
So it does not affect ACLEDA Bank’s performance. We still have room to grow. If we want to expand our housing loans, we can. But we set our own limit to 12 percent.
Actually we want our loan portfolio to be diversified. We set our limit 15 percent for loans to agriculture, while for other sectors, such as production, trade and services, we don’t place a limit.
Q: What do you think of the current situation of the banking industry, in terms of number of banks and in terms of services?
A: In 2007, there were 24 commercial and specialized banks in all. But in the first half of 2008, five new commercial banks opened or upgraded from specialized banks. That’s 27 banks this year to divide the same cake. So competition is there.
It’s good for the customers. But it’s good for the banks too because it pushes us to be more proactive and active to improve our products and services. Not just for the pricing because at some point we can’t continue to reduce the price. But we can always improve our service quality, our bank infrastructure and include electronic banking.
It’s also good for Cambodia because it shows more confidence in the country. In the eyes of the public, both internationally and locally, Cambodia is a good place to invest in banking.
Q: You said confidence is building up now. What has made people confident in the banking sector?
A: I think the action of the NBC in enforcing the Law on Banking and ensuring that all banks follow the rules and regulations. All banks’financial reports are closely reviewed by the regulator.
Also, Cambodian banks are part of a broader global network because the funds flow like water between banks from different regions. So what affects banks in the US or Europe, like the sub-prime crisis, will affect banks in Asia and Cambodia.
So the NBC watches other countries, keeps a close eye on Cambodia, and takes preventative measures. For instance, they notified banks not to exceed the 15-percent cap on loans for real estate and they put a brake on banks growth by increasing reserves requirements, although I think it should have been more gradual rather than (immediately) doubling the ratio from 8 to 16 percent.
Q: Talking about confidence, your annual report for 2007 indicated that loans were fully funded by domestic deposits. What does it mean for the bank and for the customers?
A: For any bank, anywhere in the world, a domestic source of funds to finance loan growth is the most stable. Especially deposits from individual households are a very stable source.
So depositors are confident because it shows that their bank is efficient, effective and strong.
As for borrowers, they are confident that ACLEDA Bank always has a source of funds to finance their loan needs. Also, borrowers look at our loan portfolio quality through our non-performing loan (NPL) ratio, which has been less than 1 percent for six consecutive years. NPL are loans that are not repaid in time.
Q: As you mention NPL, your report indicated that the ratio decreased from 0.1 to 0.06 percent, which is quite a performance. How did you manage to do this?
A: There are three reasons that explain how we maintain such a low NPL ratio. First, we select the right customers, that is, those who really want to start or to expand their business.That is why we work closely at the community level so we know our customers well by talking with them and also with their neighbors.
Second, we provide the right amount of loans. We work with the customers to develop their business plan so that we can figure out the amount of loans necessary for them to grow their business and the time they need to repay them back.
Finally, we provide loans at the right time. Actually most loans are seasonal. Customers usually need loans at certain months or on a certain day. For instance, they need money before Chinese New Year or Water Festival to secure enough stocks.
Q: What are the “Big Four” banks you mentioned in your report?
A: Based on NBC data, we closely watch the 10 best performing banks and, among them, four banks lead the pack in terms of the amount of deposits and loan portfolio. They are Cambodian Public Bank, Canadia Bank, ACLEDA Bank and ANZ Royal Bank.
They represented 77 percent of the total amount of deposits in Cambodia and 74 percent of the total amount of credit, as of June 2008. That is why I called them the “Big Four.” And at this time, ACLEDA Bank was number two after Campu Bank in terms of lending and number three after Campu Bank and Canadia Bank in terms of deposits.
If we consider the number of customers, ACLEDA Bank held only about 20 percent of the total credit in 2007, but our loans reached 94 percent of the total borrowers in Cambodia. This means that we provide more access to credit.
Q: How do you plan to compete among the “Big four” to reach first place?
A: As I said before, we cannot compete on pricing only. But there is always room to improve our services quality and our image also. For instance, we already started to brand our image by making all offices looking similar to our headquarters’ architecture.
But our main focus is on service quality to become the market leader. Can the other banks do that?
Yes, they can, but each of us has a different strategy.
For ACLEDA Bank, our strategy relies on scale by having offices everywhere, close to the customers, while other banks do not have the same facilities. I believe in scale, in broad branch network to do more at the local level in terms of deposits, lending, and means of payment. For instance, we have issued more than 112,000 ATM cards and we launched our VISA international card in July in all provinces.
Q: To sum up, ACLEDA’s strategy is to be everywhere, even in Laos, where you opened a branch in July. How many customers do you have?
A: So far we have 328 customers with close to US$ 300,000 in deposits. I am happy with our operations in Laos because in Cambodia we started with loans then deposits came. But in Laos, we’re started with deposits and loans will come later, so again it shows the trust of our customers.
Q: Do you also aim to open branches in other countries in the region?
A: In 2007 we were a local bank, but starting from now we are a regional bank. So we’ve branded ourselves and our new vision is to be a regional bank, starting with Laos. After our operations go well and are profitable in Laos, we will move the next country, including China and Vietnam.
But we need three to five years of penetration to move from one country to another. So in our medium- and long-term plan, we have those two countries in mind but it is subject to our board and shareholders’ approval.
But for sure, with our operations in Laos, we have truly begun to be a regional bank.
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Understanding the Hedge Fund
By Sok Sithika
Economics Today
The online encyclopedia, Wikipedia, defines a hedge fund as a private, largely unregulated pool of capital whose managers can buy or sell any assets, bet on falling as well as rising assets, and participate substantially in profits from money invested.
Hedge funds, like other alternative investments such as real estate and private equity, are thought to provide returns that are uncorrelated with traditional investments.
An increasing number of individual and institutional investors are drawn to hedge funds to further diversify their portfolios, which they hope will provide them with higher returns at lower risk.
During the early stages of the establishment of a securities market, when legal liquidity can be problematic, “hedge funds can provide more liquidity in the market. More liquidity promotes more activities in the Cambodia securities market,” said Han Kyung Tae, Cambodia chief representative of Tong Yang Investment Bank.
Hedge funds provide investors with “investment opportunities that: are structured to avoid direct regulation and taxation; have potentially higher returns; and , are highly diversified,” said Phan Pijeivibol, economist in the Governor’s office of the National Bank of Cambodia (NBC).
Financial journalist Alfred Winslow Jones is credited with creating the very first hedge fund in 1949. By using leverage and short selling, he effectively “hedged” risk in the marketplace.
In the last decade, the hedge fund industry has grown at a ferocious pace. Assets under management by the hedge fund industry totaled US$1,130 billion at the end of 2005. This was nearly twice the total from three years earlier, according to a 2006 report by London-based International Financial Services.
Cambodia plans to open its first stock exchange in the fourth quarter of 2009 in order to attract foreign funds for national economic development. Hedge fund will exist as an intermediate financial activity when Cambodia launches its bourse with tradable security.
“This type of financial company will appear when Cambodia starts the first country securities market,” said Huot Pum, deputy head of the Financial Market Division, Ministry of Economy and Finance (MEF).
In the early stage, financial companies will provide underwriting servies and once those are in place they will evolve into asset management companies are already interested in operating in Cambodia, such as Golden Bridge Vietnam.
“All asset management, hedge funds, and fund management have similar styles. They are intermediate investors who collect money from small investors as pooled investment to invest in the economic place,” said Huot Pum from the Ministry of Economics and Finance.
“But the target of those companies focuses on their nationals,” he continued, explaining that the target for a South Korean hedge fund company, for instance, would be Korean investors in Cambodia.
NBC’s Phan Pijeivibol doesn’t expect to see hedge funds operating in Cambodia “at least in the medium term (because) …. hedge funds require talented fund managers, who could promise potentially higher returns, to manage the fund and accredited wealthy investors to invest.”
But “Cambodia stock market, as far as I know, will initially aim at government securities and government securities are basically low risk and (provide) low returns.”
Han Kyung Tae of Tong Yang Investment Bank predicts some hedge funds will appear in Cambodia.
“There are foreign hedge fund managers who are interested to act, if Cambodia lacks human resources in this sector,” he said, adding that Tong Yang Investment Bank will act as a securities company and has permission to do asset and hedge fund management “when we decide to.”
Converting
Waste into Energy:
Biomass gasification is a cheap and environmentally-friendly source of fuel, say Cambodian users
By Teng Chankaruk Ratha
Economics Today
“It can substitute for up to 70-80
percent of my diesel consumption,”
said an enthusiastic Song Hong, 53,
the owner of a rice milling business
in Battambang.
The it he is referring to is a fuel
produced through a 200-year old
technology called gasification. A
synthetic gas or syngas is produced
from the combustion of carbonrich
wood, coal or petroleum waste
or biological waste.
Originally used to produce gas for
lighting and cooking in the mid-19th
to mid-20th centuries, the gasification
process was further developed
in Europe during World War II to
be an effective substitute to diesel,
which was scarce at the time.
After the war, an abundance of
cheap oil to power the world led to
a general decline of the gasification
industry, although some countries—
such as the United States
and Sweden—quietly continued research
and development.
Over the past three decades,
research has suggested that biomass
gasification using agriculture
or biological waste could be
an economically viable alternative
to conventional fuel in most
developing countries.
The research coupled with spiraling
crude oil prices and concerns
over global warming has sparked renewed
interest in gasification.
In Cambodia, biomass gasification
systems were first introduced
commercially in 2006 in Song Hong’s
rice milling factory by SME Renewable,
a pioneering renewable energy
company.
At a time when Cambodia is
stricken with high fuel prices and
is promoting more environmental-
friendly sustainable development,
biomass gasification appears
to be a clean and cheaper source
of energy, agree both operators
and authorities.
“The gasifier is very useful in
providing enough electricity with
low prices in response to the current
roar of fuel prices and the lack of
electricity,” said Touch Sovanna, director
of the Ministry of Industry’s
department of energy technique.
“Biomass gasifiers can help rural
Cambodians reduce their electricity
consumption costs,” said
Rin Seyha, managing director of
SME Renewable.
In particular, rural businesses
equipped with biomass gasifiers can
make their own gas fuel to supply
their power generators, he added.
A Clean Source of Energy that
Cuts Business Costs
Biomass gasification has been
gaining favor in both developing
and developed countries, such as
the US, China, India and now Cambodia
as a cost-efficient source of
renewable energy.
Its application in Cambodia,
where agricultural waste is relative-
ly abundant, can especially benefit
small and medium businesses that
usually rely on diesel to power their
factories and equipment.
According to SME Renewable
data, its first two customers cut
their diesel consumption by 6,000
to 6,500 liters per month. Thong
Visith, the owner of a brick factory
in Banteay Meanchey, used to spend
almost US$ 6,200 per month on
diesel. But he purchased a gasifier
system in July 2007 and now spends
only US$ 2,100 per month.
Although it needs to be fueled,
operating a biomass gasifier
is cheap.
“Our gasifier systems only need
to be fed with wood, rice husks,
corncobs or any fine agricultural
waste,” explained Rin Seyha, adding
that such fuel can be easily found in
the countryside at a very cheap price.
Indeed, the gasifier used by
Thong Visith’s brick factory uses
only US$ 33 worth of rice husks
per month.
Rice millers, meanwhile, are saved
the expense of fueling their gasifiers.
“I don’t spend even $1 to fuel
the gasifier because my factory has
already plenty of rice husks,” said
Song Hong from Battambang.
Although SME Renewable’s customers
include brick factories, ice
factories and private electricity distribution
enterprises, Rin Seyha acknowledged
that rice millers likely
have the most to benefit from the
system thanks to their ready supply
of agricultural waste.
In addition to the significant economic
economic
advantages, combustion from
biomass gasification is very clean,
producing limited residue, which
consists mainly of ash and tar. According
to specialists, the ash can be
disposed of safely while tar—a thick
black sticky liquid—can be used in
the construction of roads.
Unlike conventional diesel-powered
engines, gasifiers do not emit
carbon dioxide.
However, gasification systems
do present some risks. Fire, explosions
and carbon monoxide poisoning
are among the potential hazards
if safety rules are not properly followed,
say experts.
Rice miller Song Hong has been
using his gasifier system for two years
and has observed no such problems.
“The installation was safely done,”
he said, “and it does not make too
much noise, which could annoy my
family or our neighbors.”
Rin Seyha, who distributes the
gasifiers, said all the equipment is
imported from India, where biomass
gasification is widely used in
rural areas.
Gasifier Systems Require
Considerable Initial Investment
Prices vary depending on kilowatt
production capacity. But upwards of
US$85,000 is needed for a gasifier
system that will power a 200-kilowatt
engine for up to eight years.
SME Renewable offers a staggered
payment plan for buyers who
put 20 percent down on the price
of the gasifier. The remaining 80
percent is provided via loans from
E+Co, a US non-profit renewable
energy investment organization, at
an annual interest rate of 13 percent
over five years.
Cheaper fuel bills mean most
buyers can recoup their investment
in two years, said Rin Seyha.
The company’s director is lobbying
the Government to eliminate the import
tax on gasifiers. “If the Government
agrees, we would be able to decrease
the price by about US$ 10,000,”
said Rin Seyha, who also made formal
requests for tax exemption in letters to
the Ministry of Industry.
“We support projects which
aim at distributing electricity to the
people at a low price,” said Touch
Sovanna from the Ministry of Industry,
which has forwarded SME
Renewable’s request to the Ministry
of Economy and Finance.
However, import tax exemptions
must be justified, which
would be the aim to provide cheap
electricity to Cambodians, he explained.
The ministry already agreed to an
exemption in the case of Rin Seyha,
when he imported a gasifier system
without paying taxes three years ago.
The biomass gasifer was part of a
rural electrification project in Battambang
that was carried out with
grant aid from The Canada Fund.
Rin Seyha would like the Government
to cut or at least dramatically
decrease import taxes on
all renewable energy equipment
given that renewable energy such
as biomass, solar and wind has
proven to be a realiable, clean
and inexpensive source of energy
in other countries.
How do they work?
A biomass gasification system
generally consists of a biomass feeding
system (either manual or automated),
a gasifier vessel with an ash
removal system, gas cleaning system,
gas blower and water cooling system.
To begin the gasification process,
the users first fill the gasifier’s bunker
with agricultural waste and then
burn it, explained Rin Seyha. After
15 minutes of burning, the biomass
gasification system converts the agricultural
waste into syngas.
The gas then fuels an electric
generator connected to the gasifier.
Depending on the type of generators,
between 70 and 100 percent of
diesel use can be cut, by substituting
it with syngas.
Leuk Dana of SME Renewable’s
engineer department explained
that the gas consists of six
components: carbon monoxide,
carbon dioxide, methane, hydrogen,
nitrogen and oxygen.
For a user-friendly and easily accessible
gasification system, SME
Renewable provides “turnkey” projects
to potential buyers. “We conduct
system studies, project planning and
project financing with interested entrepreneurs,”
Rin Seyha said.
Electricity that Doesn’t Harm
the Environment
From a replacement for fossil
fuel to being further processed in
manufactured chemicals, numerous
biomass gasification systems are in
place around the world.
In Cambodia, gasification is used
primarily in the production of electricity
for businesses or for commercial
distribution.
In Battambang, the first biomass
gasification system was installed
in Anlong Tamey village in 2004
thanks to funding from The Canada
Fund and USAID through the Asia
Foundation and UNDP. The gasifier
produces electricity that is commercially
distributed by the Anlong
Tamey Energy Cooperative.
It is also the first Community
Energy Cooperative (CEC) in Cambodia
to be granted a power generation
and distribution license by the
Electricity Authority of Cambodia,
the government institution responsible
for energy in Cambodia.
Because biomass gasification is
fueled by biological waste, the system
also efficiently destroys agricultural
waste, which would otherwise be disposed
of in a manner that could be
harmful to the environment.
Since solid waste management
in Cambodia is still weak, there is
enormous potential for gasification
systems to contribute to a cleaner
environment and improve overall
hygiene.
“The gasifier systems we currently
import and install can only
use biomass,” said Rin Seyha. “But
I’ve already thought about such application
for garbage disposal. I am
currently doing research on it and
looking for a gasifier that can work
on plastic.”
—With additional reporting
by Kim Natacha
SME Renewable to Install 14 more Gasifers
SME Renewable is a joint venture between a local organization,
SME Cambodia, and E+Co, a US non-profit renewable energy investment
organization.
The company not only provides and installs gasification systems, it
also offers advisory services to farmers or investors who are interested
in developing commercial biomass plantations and tree farms to supply
biomass for gasification.
So far, SME Renewable has sold and installed 10 biomass gasifiers
in four provinces—Battambang, Banteay Meanchey, Siem Reap and
Kampong Cham.
Buoyed by the success evidenced by the dramatic decline in the operating
costs of Song Hong’s and Thong Visith’s businesses, 14 more gasifier
systems are to be installed in Banteay Meanchey, Pursat, Siem Reap,
Kampong Cham, Kampong Chhnang and Kandal, Rin Seyha said.
For more information, visit SME Renewable website:
http://www.smerenewables.com or call their office (023 882 354, 012 834 179).
Thursday, September 18, 2008
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