Koh Kong developer says hotel, resort in the works
Written by May Kunmakara, FRIDAY, 03 OCTOBER 2008
In addition to a luxury resort and hotel, the proposed project includes a new hospital, school and residential housing
A NEW development project is in the works in the Modol Seyma district of Koh Kong province designed to attract tourists and investors to the province, a representative from the company leading the development told the Post Tuesday.
Long Sarin, general manager of the Souy Chheng Investment Co, said development plans for the province include resorts, hotels, residential housing, shopping complexes and infrastructure improvements expected to include a new hospital and school for local residents.
The new development - the first of four commercial and residential projects planned for the area - is slated for a 127-hectare area one kilometre outside Koh Kong town, Long Sarin said.
Improving infrastructure
He said the first stage of development will include a $20 million investment in infrastructure improvements, residential apartments and an outdoor market, Long Sarin said, adding that his company is in negotiations with a prospective partner in Singapore for additional stages over the next five years.
In its second stage, the project will add a luxury hotel and resort, commercial office space and a modern shopping complex, the company said.
He said the province's natural beauty and its proximity to Thailand make it an ideal location for developmental investment.
"We will build a modern city, a hotel, commercial buildings, markets and other shopping facilities, a clubhouse and resort, and a school and hospital," he said.
"This is not a land concession from the government. We purchased this land ourselves, and the project will not negatively impact local people."
Targeting tourism
Long Sarin said the development aims to make Koh Kong a major target destination for tourists, particularly from nearby Thailand.
"In the past, Koh Kong province was difficult for travel," he said.
"Now everything is different due to infrastructure improvements and a new bridge connection with Thailand that will boost trade as well as tourism in the province."
Long Sarin said the company has already cleared land in the first zone of construction and has installed drainage and electricity systems as well as roads.
He said several investors have already purchased land at the site with legal land titles and the option of contracting with Souy Chheng Investment to build them a home.
Improving local economy
Chan Sophal, president of the Cambodia Economic Association, said crowding in Phnom Penh and its satellite cities has pushed new development further into the provinces, creating new opportunities for investment and employment for local residents.
But bolstering tourism remains a central part of the new development.
"The number of tourists [in Koh Kong] has increased year on year, especially after the bridge to Thailand was completed," Bun Bich, director of the provincial Tourism Department, told the Post.
"Most visitors come here for our beach," he said. "Koh Kong has 237 square kilometres of beachfront."
Acleda: Growth strong in Laos
Written by Kay Kimsong , FRIDAY, 03 OCTOBER 2008
CAMBODIA'S ACLEDA Bank Plc collected more $1 million in deposits from customers in Laos its first month of operations, more than 50 percent above initial expectations, a bank official told the Post Wednesday.
The bank was expecting to net less than half a million dollars in deposits at its first operation in Vientiane over its opening month of July 2008.
"It is very positive that Laotians trust Acleda," said Cheam Teang, Acleda's executive vice president and chief treasury and international officer.
The bank is scheduled to open two more branches in the town of Parkse in Champassak and at an as yet unspecified town in Savannakhet province.
The Laotian economy grew at a robust 7.4 percent in 2007 and 2008 growth is expected at seven percent.
Kengchai Sixannon, first secretary at the Laotian embassy in Phnom Penh, said the government hopes to see 7.5 growth over five years.
Interview: Phan Ying Tong,
Country head, Cambodian Public Bank
By Kim Natacha
Economics Today
Cambodian Publick Bank, also known as Campu bank, rapidly rose to prominence in the nation’s banking sector and loaned more money and accumulated more assets and paid-up capital than any other bank in the country, according to the National Bank of Cambodia’s 2007 Supervision Report.
However, as competition intensifies among Cambodia’s banking industry, a growing list of competitors are itching to dethrone the Malaysian-owned bank from top spot.
Phan Ying Tong, Campu Bank’s country head since 2002, shared his insights with Economics Today on Sept 10 about the state of the nation’s banking sector and his bank’s strengths and future plans.
Campu Bank has been in operation since 1992. How would you describe the banking sector when your bank established itself in Cambodia?
The banking system was relatively new in Cambodia in 1992. Campu Bank was one of the first foreign banks to open here then. The products offered by the Bank were basically deposit accounts such as savings account, current account and fixed deposits, loans, and trade finance. At that time, the total deposits far exceeded the loans.
Campu Bank is currently Cambodia’s largest bank in terms of loans, asset size and paid-up capital. How did you attract customers?
Firstly, we have a very strong parent company i.e. Public Bank Berhad in Malaysia which is one of the largest domestic banks in Malaysia, with a market capitalization of US$ 11 billion as of June 30, 2008 and listed on the Malaysian Stock Exchange. It recorded impressive achievements in terms of business, management and corporate governance, and has won many international and domestic awards and accolades over the years.
Last year alone, Public Bank Berhad received 31 awards from major international and domestic media companies and finance organizations. As of August 2008, Public Bank Berhad had already won 26 awards for its management, corporate governance and shareholder policy.
Secondly, Campu Bank has built a strong reputation of its own simply by keeping its business open during difficult times. During the financial crisis in 1997, there was a run in some of the banks due to the general lack of confidence of the public. Campu Bank was able to instill the confidence of its customers by keeping its doors open and ensuring that the customers’ interests are protected and the banking business uninterrupted.
Thirdly, Campu Bank was able to continue to provide effective and competitive financial solutions and services to meet the needs of the customers.
Lastly but not the least, Campu Bank is known for providing superior service, super PB Brand, strong governance and a corporate culture committed to excellence.
What is the profile of your clients? What is your market?
Campu Bank commenced as a one branch bank in the capital and our customer base is largely centered in Phnom Penh. But we have since begun to expand our branches to the provinces and now we have a branch each in Sihanoukville, Siem Reap, Poi Pet, Battambang, Takhmao and Kampong Cham. We now have a customer base of 37,000.
In terms of depositors, about 30 percent are businesses whilst the remaining 70 percent are individuals. As for loans, borrowers are split 50/50 between corporate clients and individuals.
We have a variety of customers ranging from individuals to large multi-national companies. Due to our strong reputation and PB branding, we also have nongovernmental organizations, embassies, and foreign companies.
According to a Public Bank news release, Campu Bank’s profit in the first half of 2008 accounted for one-third of the group’s overseas operations. How do you explain this given that Cambodia is such a small country?
Last year, Campu Bank recorded a net profit before tax of US$24 million.
This profit growth is mainly driven by significant growth in loans, which exceeded US$600 million as at August.
Cambodia is an emerging economy and many sectors are involved in the development of the country. There are ample business opportunities for the people and investors to conduct businesses not only in the real estate and construction sectors, but also in agriculture, tourism, manufacturing and services.
Our loan portfolio is well diversified and loans are concentrated mainly in general commerce, finance, insurance and business services, and manufacturing. They respectively represent about 30 percent, 23 percent and 10 percent of our loans portfolio.
We are very cautious in granting loans, especially to the real estate sector, which represents only 8 percent of our total loans portfolio. In general, we are very cautious and selective in this sector and will only finance real estate projects that are deemed viable and sustainable as we do not grant loans for speculative purpose.
As of June 30, 2008, we are able to maintain a clean balance sheet for our assets.
What have been your greatest achievements so far this year?
As of Aug. 31, our loans exceeded US$ 600 million, while it was US$363 million as of Dec. 31, 2007. Our deposits also increased from US$318 million last year to more than US$400 million in August this year.
How does Campu Bank plan to maintain its place as the nation’s leading bank in the face of strengthening competition?
In the face of increasing competition in the banking business today coupled with the number of new entrants especially foreign banks, Campu Bank will continue to be resilient and prudent in its lending.
We count on three key areas to sustain this position.
Firstly, we are one of the pioneer banks in Cambodia. The people and customers generally know and have confidence in Campu Bank and its trusted PB branding.
Secondly, we have strong backing from our parent company. Campu Bank is part of a dynamic group that focuses on a wide range of banking and financial services among others commercial banking, retail wealth management, investment banking, stockbroking and card business whose operations are also present in Hong Kong, Laos, China, Sri Lanka and Vietnam, for instance. This wide network and well-diversified financial services provide a leveraging for Campu Bank to expand its business in Cambodia.
Finally, Campu Bank offers full fledged banking services namely: deposits, loans, credit, ATMs, and cash management. Our staff are experienced and well-trained to provide services in an efficient and friendly manner. We strive to provide the best customer care.
What have been your key new products this year? What are your plans for 2009?
This year we launched a new savings product by the name of “Premier Savings Account” for high networth customers. The initial deposit to open an account is US$ 30,000 whilst the minimum daily account balance is US$10,000. There are many other benefits such as the offer of a free Nokia N95 hand phone with 8 GB and a free VISA and Mastercard credit card for life plus a higher interest rate of 1.5 percent per annum to the Premier savings account holders.
Premier savings account holders are granted VIP status as they are given priority banking service at all our branches.
In addition, Campu Bank launched its VISA and Mastercard this year whereby the fees to join and annual fees are waived for the first year.
We will launch more new products and services in 2009. We also plan to open more branches across Cambodia by the end of 2009.
What do you think of the current state of the banking sector in Cambodia? Will it affected by the global economic slowdown?
Competition will probably increase. There will be more new entrants in the banking business and the existing banks will have to strengthen and improve their operations so as to continue to stay relevant in the business.
The banks will also have to compete for qualified and experienced human capital, which will ultimately increase the cost of doing business. The NBC’s recent measure to increase reserve requirements from 8 to 16 percent for commercial banks also explains why costs have increased. Nevertheless, Campu Bank fully supports the measure taken, which is to curb inflationary pressure.
Still, there are rooms for expansion in business and banks in general. The country still requires a lot of developments especially in its infrastructure.
So there are plenty of opportunities for banks to grow. Demand for credit is there and other sectors besides the garments are very encouraging and promising in terms of generating positive growth to the country’s economy.
In comparison with neighboring countries, Cambodia has a stable political envinronment and the Government is very open and liberal in promoting foreign direct investments in the country.
Certainly, Cambodia cannot totally escape from the effects of a global economic slowdown, but there are many favorable factors here for the country to do better than other countries.
Cambodia’s securities market is expected to be established by the end of 2009. Do you have plans for it?
As we are one of the first foreign banks in Cambodia, we also plan to be the first company to be listed on the stock exchange. We also have plans in mind to provide additional services related to stock exchange. Depending on the regulations, we will either operate as one Campu Bank if a banking license is sufficient or otherwise, we will establish a new subsidiary or associate company for organic growth.
How do you feel about the future of Campu Bank?
Campu Bank was the first Malaysian bank to be established here. It showed the strong and long-standing relationship between Malaysia and Cambodia. Bank in 1992, Malaysia was among the first countries to encourage its investors to invest in Cambodia.
We believe Campu Bank will continue to do well especially with the strong leadership and far sighted guidance of Tan Sri Dato’ Sri Dr. Teh Hong Piow, the founder and chairman of Public Bank Berhad. With more than 40 years of experience in banking, we certainly have confidence that Campu Bank will continue to excel and contribute to the country’s economic growth and well being of its people.
British investors eye Cambodia investment
Written by May Titthara, THURSDAY, 02 OCTOBER 2008
The real estate sector was the major focus for a recent British delegation of business leaders
BRITISH investors are eager to get a slice of Cambodia's booming real estate sector with multiple delegations of businessmen arriving to scout out local partners in anticipation of expanding trade ties.
According to the chairman of the British Business Association of Cambodia (BBAC) Senaka Fernando, the most recent delegation to arrive was eyeing the energy, agro-industry, trade and real estate sectors.
They were particularly interested in Cambodia's skyrocketing real estate sector, where land values have risen 1.5 times in a year, Fernando told the Post Wednesday.
Brits abroad
Cambodia has attracted substantial British investments since 1995, and the BBAC currently has 77 members, Fernando said. No exact figures on British investment in Cambodia could be obtained.
"Investors from any foreign country can come to Cambodia and invest confidently and without restrictions," he said.
"More foreign companies should consider investments here because of our rich natural resources and the availability of a low-cost labour force," Fernando said.
Representatives for the CDC could not be reached for comment on Wednesday.
Ex Seng, a lecturer at Cambodia Mekong University, said a conference on the trade and investment climate in Cambodia last month attracted more than 40 Cambodian and British business representatives.
"We want to enlarge our relationship with British investors because we have so few of their businesses in the country so far," Ex Seng said.
"As we found at the conference, they are looking for local partners and evaluating investment potential."
Ex Seng said a partnership between the Mong Reththy Group and a British pig breeder, announced last month, shows the potential for creative developmental partnerships.
"We are proud of our country, and we have many Western investors with large-scale and long-term investments who feel the same about emerging investment opportunities," Ex Seng said. He added that British investment representatives expressed growing interest in future partnerships during last month's conference, and they expect to return to Cambodia later in the year to study the agribusiness sector.
Local palm oil brand set for launch next year: Mong Reththy
Written by Chun Sophal and Nguon Sovan THURSDAY, 02 OCTOBER 2008
Mong Reththy's palm oil products were intended for export but the Cambodian tycoon is now focusing on the domestic market
THE Mong Reththy Group expects to begin producing a local brand of palm-based cooking oil next year, company president and CEO Mong Reththy told the Post Wednesday.
Mong Reththy, also a Cambodian People's Party senator, was granted a concession on approximately 11,000 hectares of government land in 1997, of which some 7,000 hectares in Sihanoukville were used to establish palm plantations.
Since 2002 the company has exported all its palm oil products, but in 2009 it will focus on the domestic market, said Mong Reththy. "We will produce cooking oil from palm oil to sell locally because our production yields are enough to supply a new refining plant," he said.
By next year, the company's processing plant, currently working at 50 percent capacity, will be capable of processing 30 tonnes of palm oil every hour - a sixfold increase from 2002. By 2011, is expected to reach 60 tonnes per hour. The plant will also employ an additional 1,000 workers, he said, adding that crops were good this year.
Company reports say the Mong Reththy Group has exported nearly 20,000 tonnes of palm oil this year to Malaysia, India, Korea and Germany, earning US$12 million.
The company estimates it will be able to produce 300 tonnes of palm oil daily, beginning next year.
Mao Thora, secretary of state for the Ministry of Commerce said Cambodia is a good market for local brands, but he could provide no statistics on cooking oil imports. He said local oil would face stiff competition from cheap imports.
"In order to encourage local production and sales, the government may need to increase taxes on imported cooking oil," Mao Thora told the Post Wednesday.
Yoeung Royal, a sub-manager with Chip Mong Import & Export, said his company imports about 5,000 tonnes of cooking oil per year. He said he would consider becoming a distributor of a new domestic brand.
Plan for new national air carrier put on hold: official
Written by Chun Sophal and Hor Hab THURSDAY, 02 OCTOBER 2008
Negotiations continue with Indonesian partner Rajawali Group; govt wants to proceed slowly to ensure success
PLANS for a new Cambodian national airline, announced in May, have been put on hold as a result of difficulties with ongoing negotiations with an Indonesian investment group, government officials say.
Deputy Prime Minister Sok An was tapped to spearhead the deal in partnership with the Rajawali Group, but discussions with the Indonesian investors have not yet been finalised, he told the Post last week.
"We don't want our new national airline to fail like its predecessor Royal Air Cambodge," he said. "We need more time to discuss the project with our partners."
Prime Minister Hun Sen last year announced plans to re-establish a national flag carrier to compete with other private carriers and attract more foreign tourists to Cambodia.
"Our new national airline will be very competitive with other companies as tourism in Cambodia continues to grow," Sok An said during a signing ceremony with Rajawali in Phnom Penh in April.
"The new carrier is expected to be profitable because of the rising number of travellers coming to the Kingdom," he added.
The Ministry of Tourism projects that Cambodia will receive nearly three million tourists from overseas by 2010.
National need
Ho Vandy, president of the Cambodia Association of Travel Agents, said the government should not delay the project too long if it wants to avoid greater competition from the private sector.
"I want to see the government move on the new airline as quickly as possible," he said, adding that the absence of a national carrier could give potential visitors the wrong idea about development in Cambodia.
The new airline will be funded by an initial investment of US$50 million, and the government of Cambodia will hold a 51 percent stake, with the balance held by Rajawali.
Cambodia's previous national carrier, Royal Air Cambodge, was established in 1994 through a joint venture with Malaysian company Naluri.
The government held a 60 percent stake before the airline went bankrupt in October 2001 after losses that year of $30 million.
Is it the right time?
The Cambodian government had initially sought a Chinese partner to establish the new airline, but talks collapsed.
Soaring aviation fuel prices, a softer international tourism market and stiff competition have also complicated efforts to establsh the new national carrier.
The International Air Transport Association earlier this year reported that the airline industry is facing one of its worse crisis in history.
The IATA represents airlines around the world.
Officials, operators eye ecotourism as growth sector
Written by CHRISTOPHER SHAY THURSDAY, 02 OCTOBER 2008
But expert warns that ecotourism could be more about pandering to wealthy Westerners than actually helping local communities
CAMBODIA is keen to capitalise on the environmental craze by positioning the Kingdom as one of the world's most exclusive and uncharted eco-tourism destinations, officials say.
"The development of ecotourism in Cambodia has no limit," said Thok Sokhom, deputy director of international cooperation and Asean department at the Ministry of Tourism. "The Cambodian ecotourism sector is growing."
The Kingdom already sees more than two million tourist arrivals per year. That number is growing, but the government is eager to spread the benefits of the tourist dollar beyond the hub of Siem Reap and the Angkor temples.
Seven new tourism projects in the rural northeast are in the works, which will help diversify the Kingdom's top-earning industry and bring the benefits of economic development to isolated rural communities. Officials also hope transportation infrastructure and better sanitation in the jungle provinces of Stung Treng and Ratanakkiri will follow.
About 16 percent of Cambodia's gross domestic product comes from tourism, up from 6.3 percent in 2000, and tourism receipts have risen from US$347 million in 2003 to US$1.4 billion four years later, according to government figures.
Ecotourism on the rise
No specific statistics for ecotourism arrivals are available, but private companies and government officials insist the sub-sector of the industry is booming.
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Right now, ecotourism [in cambodia] is still in its early days.
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"About 30 percent of the total number of tourists in the country [last year] went to the northeastern provinces to see dolphins, forests and ecotourism villages," said Thok Sokhom.
Mark Ellison and Yin Chouleang, who founded Asia Adventures, a Phnom Penh-based sustainable ecotourism company in January 2007, say the industry is small but growing.
"Right now, ecotourism [in Cambodia] is still in its early days," Ellison told the Post, "It doesn't compare with Thailand, Vietnam or Laos, but the beginnings are there."
But it is not just about providing people with an amazing holiday, Ellison said.
"Ecotourism ... can help people in communities understand the value of nature and become an endless source of income for these people," he said.
No coherent policy
While the Ministry of Tourism is an active promoter of sustainable tourism, others, such as the Ministry of Mines and Energy, are less keen, Ellison said. "The areas where ecotourism are being promoted have more valuable [natural] resources. The other ministries are eyeing the areas for other things. There seems to be limited joined-up thinking between the ministries," Ellison said.
Another problem that Cambodia's ecotourism industry could face is the country's rapid deforestation.
"When people envisage ecotourism, they envisage forests. A decrease in forests will make Cambodia less attractive," Ellison said. Despite the potential drawbacks, ecotourism shows all the signs of becoming a significant part of Cambodia's growing tourism sector - with massive ancillary benefits for local communities.
Thailand has a sizable and lucrative ecotourism industry, and experts say it could serve as a model for Cambodia.
"Communities with natural beauty and culture want to develop ecotourism sites," said Thok Sokhom.
Cambodia's recent "Kingdom of Wonders" advertising campaign makes ecotourism one of the pillars of its campaign.
Appearing on CNN International, advertisements feature ecotourism sites prominently, an attempt to show the world Cambodia has more to offer than just Angkor Wat.
Customers, however, need to be careful when choosing an ecotourism trip. Not every ecotourism company delivers on these promises.
Tim Forsyth, from the Development Studies Institute at the London School of Economics, warned that tourism operators may claim to be sustainable, but their rainforest or cultural experiences may not be joint ventures with the local community.
Forsyth said that there's a possibility that "cultural or green themes pander more to what they [tourism operators] think rich, Western tourists want, rather than actually engage with local ecosystems and cultures."
For Ellison though, sustainable ecotourism is simple.
"It is just treating the country and the people you meet with respect."
Ecotourism: Just a marketing ploy?
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Ecotourism is not always what it’s cracked up to be. Tim Forsyth, from the Development Studies Institute at the London School of Economics, warns that not every ecotourism company is a joint venture with the local community. Forsyth wrote “there’s a concern that eco-tourism is being used in many less developed locations as a springboard for unsustainable mass tourism.” This means that eco tourism can be simply nature-based tourism and not concerned with sustainability or local participation. “[Ecotourism] can actually wreak a lot of damage on fragile ecosystems or increase the pressure upon remote people,” Forsyth has said in a lecture, saying that communities can become dependent on tourism and not develop skills that give them flexibility in the economy. Forsyth emphasizes “sustainable tourism,” should take into account all aspects of tourism. Ecotourism is “the development of a niche product aiming to add value to tourism packages by focusing on green or cultural themes.” Forsyth is a UK-based tourism expert. BY CHRISTOPHER SHAY
World crisis, local hitches might delay CamEx launch
Written by George Mcleod and Brendan Brady WEDNESDAY, 01 OCTOBER 2008
CamEx's 2009 launch date was widely regarded as optimistic, but now some business leaders say global financial crisis could push things back further
WITH global markets in turmoil, business leaders say the much-anticipated launch of the Cambodian stock exchange could slide back by up to a year.
"Before the crisis hit, we had some doubts over whether the market would be able to launch [on time]. Now [the crisis] adds to the problems," said In Channy, CEO of Acleda Bank, in an interview with the Post last week.
The exchange was scheduled to start trading by 2009 under an agreement with Korea Exchange signed September 2007.
Initial progress was encouraging with Cambodian lawmakers debating and passing a 69-page securities law within a week of the deal being inked.
But with the global financial turmoil slowly spreading to Korea, China and Japan, liquidity has evaporated as investors flee equities.
The second biggest lender in Cambodia, Acleda, was among the first major companies to say they wanted to be listed and had specific capital expansion plans. But the bank's CEO now says that while the company fully supports the stock exchange in principle, current market conditions may delay the launch.
"Perhaps it will take until 2010," said In Channy.
Even before the crisis hit Asia, the nascent stock exchange had encountered a string of problems.
Key questions about the joint venture between the Korean Exchange and Cambodia's Ministry of Economy and Finance remain unanswered, including how restrictive the audits and disclosure requirements will be and what size companies will be allowed to apply.
Crisis not relevant
According to Nguon Meng Tech, director general of the Cambodian Chamber of Commerce, the US economic crisis's impact on Asian markets is not linked to the delay of the CamEx launch.
"Even before this problem in the US, I didn't think the stock market would be ready for another three, four or five years," due to a lack of transparency in Cambodia's business environment, he said.
While he identified a lack of transparency as the main culprit, he told the Post Tuesday that the 2009 deadline was also unrealistic as the county lacked a class of informed and knowledgeable investors.
"Even rich people in Cambodia know nothing about stock markets. They have money but they are from the war generation. We'll probably have to wait until their kids who are educated overseas return, so we'll need another few years."
Nguon Meng Tech cautioned the stock market not be rushed into a launch in the absence of credit asset evaluations.
The requirement that companies declare their assets is widely believed to be one of the biggest obstacles to establishing Cambodia's stock market. Most enterprises that could list are family-owned and guard the value of their businesses.
A prominent business leader in Cambodia said that the predictable teething pains of the stock exchange were a sensitive issue.
"Everyone supports the idea of launching the exchange, but there has been an understanding for some time that the country and the legal system just aren't ready," he said.
Much-needed capital
But many Cambodian business say new capital is just what the economy needs. When plans for CamEx were first announced in September 2007, Prime Minister Hun Sen called a securities market "the lifeblood of a capitalist economy which will actively contribute to mobilising financial resources."
Marvin Yeo, Managing Partner at Frontier Investment and Development Partners, said that even with the difficulties facing the exchange, he expects the market may be launched on time in a limited form.
"I think the stock market is a great thing for the country, and I see it being launched on time. It will probably take one or two years to go through its teething process, but I think it will work out."
Cambodia's first agency to assess the value of corporate assets opened earlier this month, but business figures were skeptical the new body will be able to establish sufficient nationwide transparency in time to meet the 2009 deadline.
Investors to trim the fat off pig farms
Written by Chun Sophal and Nguon Sovan WEDNESDAY, 01 OCTOBER 2008
Investment in sanitation to boost pig-breeding industry
Vandy Rattana
CPP senator and business tycoon Mong Reththy speaks to reporters at the Swine Business Forum in Phnom Penh last Wednesday.
ALOCAL company is set to invest US$4 million in a new slaughterhouse and facilities to control the quality of imported pigs, in a bid to boost quality in the Kingdom's nascent pig-breeding industry.
"This is an initiative which aims to revolutionise and bring, for the first time, international sanitary standards to Cambodia," Mong Reththy, a Cambodian People's Party senator and co-chair of the government's Agricultural and Agro-Industry Working Group, told the Post on Tuesday.
Last month, his company Mong Reththy Group announced plans to spend $5 million importing pigs from a breeder in Yorkshire, England, in a move that aims to tap soaring pork demand in Cambodia.
The first phase of the project - quality control facilities to assess imported pigs - is now complete, Mong Reththy said. The facilities, located on five hectares of land in Phnom Penh's Dangkor district, cost $1 million to construct. They are now operational and have the capacity to process up to 10,000 pigs per day.
The second phase - a $3 million state-of-the-art abattoir - will be funded by contributions from the owners of existing abattoirs in the capital, he said. Construction is expected to begin next year and all equipment will be imported from Germany.
"When the project materialises, pork eaters will have safer pork, [giving them] better health," said Mong Reththy. "It will be easier to control the sale of imported pigs."
In a bid to boost take-up of the new facilities services in the first year of operation, pig importers will be charged just 50 cents per pig to have them inspected and - if they are healthy - certified as such. Next year, the inspection fee will be raised to $2.
"If we do not build these facilities, both imported pigs and those who slaughter them will be in a difficult situation in terms of sanitary control," he said. "I hope that we can do well on this project."
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When the project materialises ... it will be easier to control the sale of imported pig
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Piggie went to market
Currently, there are six companies importing some 1,600 pigs a day from Thailand and distributing them throughout Cambodia. Phnom Penh currently has ten slaughter houses, Mong Reththy said.
The Kingdom consumes an estimated 7000 pigs a day - including 1600 in Phnom Penh, said Kao Phal, director of the Department of Production and Veterinary Science in the Ministry of Agriculture.
Suon Sotheoun, deputy director of the Department of Production and Veterinary Science of the Ministry of Agriculture, welcomed the project on Tuesday, saying it would be a boost to public health.
"It is a step towards taking care of our people's health, and we will arrange for five officials from our department to join the pig quality control at the checkpoint," said Suon Sotheoun.
The director of Phnom Penh's municipal health department, Veng Thai, said Tuesday that he welcomed the plan.
"It will be good to ensure that pork is free of diseases, and it will guarantee that people eat good quality pork," he said.
He added that having just one slaughter house in one location will make it easier for authorities and government officials to inspect the facilities regularly.
"Currently there are a few licensed slaughter houses, but lots of unlicensed ones, so it is hard to control them. When all the [licenced] slaughtering is done in one place, it will be easier to identify unlicensed abattoirs," he said.
Rabbit Island set for five-star development early next year
Written by Cheang Sokha and Thomas Gam Nielsen
WEDNESDAY, 01 OCTOBER 2008
Kep governor says the tiny island will become Cambodia's next big tourism destination, but local residents insist they will not leave unless the government offers fair compensation
AFIVE-STAR resort and golf course is slated for the idyllic 600-hectare Koh Tunsay, or Rabbit Island, off the coast of Kampot province's sleepy seaside town of Kep. Construction is slated to begin early next year, officials say.
Kep Municipality Governor Has Sareth told the Post on Tuesday the Council for the Development of Cambodia has granted permission to the Pol Cham Group.
"I think this project is good, as it will provide jobs and income to local people, and it will make Kep one of the most attractive tourist destinations," he said.
Pol Cham Group representatives were unavailable for comment on Tuesday, but Has Sareth said construction will begin early next year.
Currently, visitors to Koh Tunsay can reach the island only by a 40-minute boat ride with local fishermen. It is home to just 14 families who run small restaurants and bungalow guesthouses that lack running water, steady electricity supplies and proper sewage systems.
The principal trade of Rabbit Island residents is fishing and farming, as it was when the first families took up residence in 1954. The island, like all islands in Cambodia, technically belongs to the state, and none of the islanders have papers to show ownership of their land.
Compensation claims
One resident, 29-year-old Kensi Mach, told the Post that nine families were moved from the island in 2006 after only a brief residence. They were given less than US$900 in compensation.
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...IT WILL MAKE KEP ONE OF THE MOST ATTRACTIVE TOURIST DESTINATIONS.
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Another resident, Chea Om wants much higher compensation than the families that have already been relocated.
"I do not object to the development project, but if they offer only a small compensation, I don't know how I will survive," she said.
The 65-year-old has lived on the island for more than 20 years and does not want to leave. "I live here in happiness," she said. "And I run a good business."
All families that remain say they will demand significant sums to leave their homes.
A man from one of the island's oldest families, who spoke on condition of anonymity, said his family would demand $20,000 in compensation.
Has Sareth acknowledged that the remaining families have lived for years on the island and that the municipality and the Pol Cham Group would need to resettle them with a fair compensation agreement.
"We are looking at the price of the land," he said, adding that "the villagers will agree, as we are developing [the island] for their benefit."
Water-treatment plants to meet rising demand
Written by Chun Sophal and Nguon Sovan TUESDAY, 30 SEPTEMBER 2008
The plant hopes to supply water for over 140,000 families
Heng Chivoan
Anco hopes to bring inexpensive tap water that’s ready to drink to more than 140,000 families.
ALOCAL company has disclosed details of its more than US$6 million investment in two water-treatment plants that are intended to supply Cambodia's rapidly growing population with clean water.
The Anco Brothers' plants will eventually supply fresh water to some 144,000 families, said company owner Phu Kok An.
One plant, located in Kandal's Kien Svay district, became operational last month, while another is yet to be built.
Phu Kok An, who is also a Cambodian People's Party senator, said the plants will secure much-needed water in regions where growing populations have taxed local supplies.
Construction began last year when the company broke ground on the Kien Svay plant, and a second facility in Sihanoukville is forthcoming.
"The $2 million facility in Kien Svay has already supplied clean water to about 4,000 of the 30,000 families in the district since production began last month," Phu Kok An said.
Local residents pay 1,700 riels ($0.43) per cubic metre, he said.
Heng Thiem, governor of Kien Svay, said greater awareness of the health risks of unsafe water has made district residents shun well and river water for clean water supplies. "We expect the water-treatment plant will improve the health of our families here," he said.
The new Sihanoukville plant will harness water from the Kbal Chay waterfall to produce as much as 1.5 million cubic metres of water in the first year of operations, Phu Kok An said, adding that the cost will be 1,000 riels ($0.25) per cubic metre.
"We have invested an additional $4 million to fund the new Sihanoukville plant, and we expect it will be completed in three months," he said.
"We hope this project will maintain sustainable water supplies for at least the next 30 years," he said.
Prak Chanroeun, head of Sihanoukville's Department of Industry, Mines and Energy, said the municipality faces a clean-water shortage of nearly 50 percent.
Nearly 140,000 families in Sihanoukville require about 12,000 cubic metres of clean water daily, but local authorities can provide only about 6,000 cubic metres, he said.
A Ministry of Environment official would not comment on whether Anco has an environmental permit.
Nordic telecom firm buys Applifone
Written by Brendan Brady AND George Mcleod TUESDAY, 30 SEPTEMBER 2008
CAMBODIA'S fourth-largest mobile phone operator, Applifone, has been taken over by Scandinavian telecoms giant TeliaSonera. The company is also buying 80 percent of Nepal's Spice Nepal in a $488 million deal.
"One of our top priorities is to grow our business in [Asia]...Nepal and Cambodia have a combined population of 43 million, low mobile penetration and growing economies," said Lars Nyberg, president and CEO of TeliaSonera, in a statement.
Applifone has more than 97,000 subscribers, a 3 percent market share as of August 2008.
TeliaSonera has expanded into developing markets in recent years, in part due to slow growth at home. The company is embroiled in a dispute with Russian-controlled Altimo over control of Turkish operator Turkcell.
While fixed-line penetration has remained largely static since 1995, mobile phone use has exploded, with an estimated 2.5 million subscribers now using one or more of the five mobile providers in Cambodia and the hand phone an essential accessory for urban dwellers.
As Cambodia's mobile subscriber base is expected to rapidly expand, competition is heating up, and some experts predict an industry shakeout ahead, particularly as the new international entrants into the market take aim at industry leader Mobitel.
Mobitel, which provides the 012, 092 and 017 exchanges, controls the largest share of the market, with more than 1.5 million subscribers today.
Organic rice set to be exported to Germany and United States
Written by Khouth Sophakchakrya TUESDAY, 30 SEPTEMBER 2008
CEDAC says the plan would see more than 230 tonnes of organic rice exported, boosting incomes of rural farmers in Cambodia
THE Cambodian Center for Study and Development in Agriculture (CEDAC) will export more than 230 tonnes of organic milled rice to Germany and America, Yang Saing Koma, president of CEDAC, told the Post on Thursday.
The shipments would include 200 tonnes to Germany for Rickmers Rice in November and another 30 tonnes to America for the Lotus Food Co early next year.
"We now have more than 600 tonnes of organic milled rice to sell locally and to export to Germany and the United States," Yang Saing Koma Koma said.
This year, CEDAC plans to buy about 2,000 tonnes of organic paddy rice, up from 1,200 tonnes it bought last year.
"We hope farmers will increase their production of organic paddy rice with market demand," Yang Saing Koma Koma said, adding: "The price we provide to farmers is always 10 to 20 percent higher than the market price."
Lim Virak, 45, a farmer in Prek Treng village in Prey Veng province said that in his village, organic paddy rice sold to other vendors at $250 per tonne, but his family and other villagers who sold to CEDAC received $300 per tonne.
"We expect CEDAC to provide a price that is about 20 percent higher than the market price," Lim Virak said.
He said that he and other villagers have grown organic paddy rice since 2004, after CEDAC taught them organic farming techniques.
"I am very happy if farmers produce organic rice crops," Phou Puy, president of the Rice Miller Association said.
"The organic husk rice is easier to sell, and sells at a higher price than husk rice that has been exposed to chemicals."
Cambodia sets sights on nuclear power
Written by Kay Kimsong MONDAY, 29 SEPTEMBER 2008
Cheap power option seen as vital to growing energy needs
CAMBODIA may develop its first nuclear power plant as early as 2020, government officials say.
With hydropower and coal capacity expected to peak in the next decade, the government says nuclear energy is the best option for the country.
"Cambodia has a long way to go before meeting electricity demand. After 10 years, we will not have enough hydropower capacity," said Sat Samy, a secretary of state for the Ministry of Industry, Mines and Energy.
He said Cambodia's nuclear plans are in line with efforts by Asean to promote atomic energy among member states.
Asean energy ministers reached a joint agreement last year in Bangkok to pursue new sources of power for the region's growing electricity needs.
Singapore is heading the Asean plan to study nuclear policy and develop new strategies for the region, said Sat Samy.
He said the announcement is only a first step and that hydropower remains the focus of Cambodia's short- and medium-term energy strategies.
Ith Praing, a secretary of state for the Ministry of Industry, Mines and Energy, confirmed that Cambodia hopes to develop nuclear energy by 2020-2025.
"Energy ministers believe by 2020, electricity demand will be very high...and there will be no extra capacity for hydropower or coal power," Ith Praing said.
He added that Vietnam is currently studying a plan to build a 2,000-megawatt nuclear power plant in the north, and other Asean members are exploring clean coal technology. Thailand plans to start building nuclear plants in the next 5 or 10 years.
"We cannot avoid nuclear power. It will be the only choice for producing cheap electricity," he said. Ngy San, deputy executive director at the NGO Forum, said nuclear power could be an important advance in Cambodia but only if it was done safely.
"Many developing nations are already operating nuclear power plants for electricity, but Cambodia may not be ready for that step," he said.
He added that Cambodia has already invested US$1.4 billion for seven hydropower plants nationwide. "I would be happy if we could build a nuclear power plant, but we need technology to protect the environment, from toxic waste that would destroy our water," he said.
Cashew market crumbling
Written by Nguon Sovan and Brendan Brady
MONDAY, 29 SEPTEMBER 2008
The dearth of domestic cashew processing plants means many farmers are abandoning the nut and growing more profitable crops: rubber and cassava
FACED with a stagnant market for local cashews, farmers of the high-end nut are switching to other crops, according to local agriculture experts.
Without domestic processing plants to purchase cashews, farmers are forced to sell to the nearest buyer, Vietnam, which is one of the world's biggest cashew processors and exporters, according to Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture.
Cashews in Cambodia are harvested mainly in the provinces of Kampong Cham, Kampong Thom and Ratanakkiri, which are near Vietnam.
"Currently, the cashew nut market in Cambodia is very small, and what we export to Vietnam is just raw product so Cambodian farmers get a bad price," said Yang Saing Koma.
Vietnam imported about 150,000 tonnes of cashews from Cambodia and South Africa in the first half of 2008.
The country has exported about US$850 million worth of cashews this year, according to a Vietnamese news report.
Yang Saing Koma said that in Cambodia the industry would continue to decline unless local processing infrastructure was developed to provide Cambodian farmers a deeper pool of buyers.
Cambodia's only cashew processing plant, the now- defunct CAMAG in Kampong Cham, used to purchase a minuscule 150 tonnes per year, according to Tim Purcell, an agriculture specialist based in Phnom Penh with the NGO Agriculture Development International.
A June 2007 report from the Economic Institute forecasted a decline in the domestic cashew industry.
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We export [Raw product] to vietnam...so cambodian farmers get a bad price.
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The agency warned that by exporting 95 percent of its raw product to Vietnam, Cambodia was forgoing too much of the value-added chain for its cashew industry to remain profitable.
According to the EIC report, the main barrier to investment in processing plants in Cambodia is staggering energy costs, which remain significantly higher than in Thailand and Vietnam.
Farmers who once dedicated their fields to cashews are now growing rubber and cassava.
"Cashew nuts are only exported to Vietnam, there's really no local market. But with cassava and rubber, they are purchased by local companies at competitive prices," said Suon Dy, head of the Department of Industry, Mines and Energy in Kampong Cham.
He said that at current market prices, one hectare of cashews yields around US$1,000 worth of product per year, compared with nearly $2,500 for rubber and cassava.
Global demand for rubber and cassava has climbed in recent years.
Cassava is used to produce ethanol, one of the main alternative fuels promoted by the global campaign against climate change.
Natural rubber has also been increasingly prized, by China especially, following dramatic hikes in the price of oil, as it is used to make its synthetic alternative.
Local processing conditions also favour the prospects for both crops: Cambodia processes about half the cassava it grows, and by law refines all of its locally harvested rubber.
Meas Sothearvy, head of the agriculture ministry's statistics office, said that while it was too early to tally nationwide yields for this year's harvest, inspections suggest there are significant declines in cashews.
For 37-year-old Prum Chorn and others in the former cashew growing district of Memot in Kampong Cham province, the benefits of switching to rubber crops were overwhelming. "Cashew nut yields once a year and is bought at low prices from middlemen to go to Vietnam," he said.
"Rubber yields daily and is purchased at high prices from rubber factories within the province."
Similarly, Ing Taingleng, 73, from Kampong Thom's Baray district, said he's following the lead of other farmers in the province and this year would replace half of his 20-hectare cashew farm with rubber crops.
"The price of cashew nuts has not changed for several years now; it's still $500 to $700 a ton depending on the quality," he said.
"And we can only export to Vietnam. With rubber, the price is going up a lot and there is a strong market in Cambodia."
Hong Kong eyes garments
Written by Nguon Sovan MONDAY, 29 SEPTEMBER 2008
Trade delegation meets with officials
A DELEGATION consisting of 18 representatives of large companies from the Hong Kong general chamber of commerce met with Hann Khieng, vice president of the Cambodia chamber of commerce, to eye investment opportunities in Cambodia.
The meeting took place on Friday and the delegation was headed by Neville Shroff, vice chairman of the Hong Kong chamber's Asia/Africa committee.
"Those business people are interested in investing in the garment and textile sectors in Cambodia. Their visit was meant to look for local partners for their investment," said Nguon Meng Tech, director general of the Cambodia chamber of commerce, on Sunday.
"Those investors look firmly and eagerly to invest in the sectors. We hope they will put their investment here soon."
"This is a good sign for the start of the new government, showing confidence among foreign investors," he said.
The delegation arrived in Cambodia after eying investment opportunities in Laos.
Kong Sang, vice president of the Garment Manufacturers Association in Cambodia, said he welcomes new investment in garments and textiles.
However, Kong Sang said that competition from Vietnam and China has meant that many of the trade delegations end up investing outside of the country.
"They just came and looked, but didn't make a firm decision," he said.
Garment sector growth has slowed this year, mainly due to declining US demand.
Casino show gets mixed response
Written by Hor Hab and Chun Sophal MONDAY, 29 SEPTEMBER 2008
New gaming and casino technology went on display for the first time in Phnom Penh last week
A CASINO gaming exhibition held in Phnom Penh last week produced mixed reactions from the government and opposition over the future of gaming in the Kingdom.
The event, hosted by Macau-based Well Entertainment Ltd to showcase new gaming and casino technology, was the first of its kind in Cambodia.
"We can see a potential market in Cambodia because the gaming industry here is improving," Antonio Fong, managing director for Well Entertainment, told the Post Thursday.
"We are targeting the Southeast Asian sector, and in particular the Indochina region. Cambodia stands at the centre of markets in Singapore, Vietnam, Laos and Thailand," Fong said.
The company aims to bring its products, which are designed in the United States and manufactured in China, to Cambodia to meet the growing demands of the gaming industry in the Kingdom, Fong said.
Phu Kok An, a Cambodian People's Party senator with substantial holdings in the Kingdom's burgeoning gaming industry, said the local sale of Well Entertainment's products would generate much needed tax revenue for the government
"Generally, we need governmental approval for the import of casino equipment, and we usually buy from the United State or Australia, accounting for hundreds of thousands of dollars," he said.
"I think the casino industry [in Cambodia] shows every sign of strengthening in the future," Phu Kok An said, adding that he expects to earn nearly US$1 million from his interests in the gaming sector in 2008.
"I expect to get even more profits in the future," he said. "[Many] people are crossing the Thai border into Cambodia to visit casinos, even though tensions have been high on the border."
Chhea Peng Chheang, secretary of state at the Ministry of Economy and Finance, said he was not aware of the exhibition but acknowledged that the gaming industry in Cambodia has boosted national revenues.
"The government expects to earn $18 million in national income in 2008. This is up from $16 million in 2007," Chea Peng Chheang told the Post last week.
"Cambodia currently has about 29 casinos, mostly along our borders with Thailand and Vietnam, which employ more than 15,000 people," said Chea Peng Chheang. "We expect more casinos in the future, particularly near the Vietnamese border."
Opposition parliamentarians criticized the industry's growth, saying the social costs outweigh the economic benefits. "I want Cambodia to be famous for its rich culture and traditions," Sam Rainsy Party lawmaker Yim Sovann told the Post Thursday. "I would feel sorry if we were to become well-known only for our casinos."
Cambodia's gaming industry has seen strong growth with Naga Corp, the country's largest gaming company, reporting 68.5 percent revenue growth for the first half of 2008.
Israel set to become major investor in Cambodia: embassy
Written by George McLeod, THURSDAY, 25 SEPTEMBER 2008
Agriculture and high technology earmarked by Israeli businesses as embassy says the country hopes to become a top investor
CAMBODIA may see a flood of Israeli trade and investment over the next year, according to an embassy spokesman.
"There is huge interest in Cambodia [in Israel]. Businesses are looking to [the Israeli government] to open new markets for them in Cambodia," said Tzahi Selzer, the economic and trade attache at the Israeli embassy in Bangkok.
The embassy said the first stage would see investment in agriculture, real estate, high technology and irrigation.
Israel is well-known for its agricultural technology, which includes high-tech drip irrigation and advanced greenhouses.
On the longer term, Cambodia could see Israeli investment in medical equipment and hydro-technology, such as desalinization plants.
"In the next year, you will hear a lot about Israel in Cambodia ... there aren't many places that are as promising as the Cambodian market. Israel has been in Vietnam and India, and is looking for new markets," said Selzer. The Bangkok embassy is in charge of Cambodia, but the attache said the Israeli government is considering opening a representative office in Phnom Penh.
The Israeli efforts come on the back of increasing interest in Cambodia on the part of Middle Eastern countries. A delegation from Kuwait visited Cambodia in August, and investment from Saudi Arabia and Iran has grown substantially. Dubai Group from the United Arab Emirates is expected to invest heavily in Cambodia through the Leopard Fund.
Selzer said his government's efforts are not intended to counter Arab and Iranian investment in the Kingdom.
"We hope to become one of the top-10 investors in Cambodia," he said. Israeli-Cambodian trade and investment is small, and only about 30 Israelis live in Cambodia, said the embassy.
The Israeli government's plans for Cambodia also include negotiations to ink investment agreements on double taxation and protection of investment.
Campura inks deal with US developer
Written by CHRISTOPHER SHAY, FRIDAY, 26 SEPTEMBER 2008
SOFTBRANDS, a global software leader for the manufacturing and hospitality industries, has partnered with Campura Systems Corp, a local company that provides management systems to hotels, banks, restaurants and telecom operators, Campura said.
The partnership would see SoftBrands Campura promote, sell and support SoftBrands' property-management software used by hotels around the world, including hotels in Phnom Penh and Siem Reap, said Campura's chief executive, Volak Sao. He said the deal will allow Cambodian companies using Softbrands' Hotel Information Systems to work through Campura, instead of Thai partners.
Campura was founded in 2007, and its yearlong sales are around US$1 million. Campura Systems Corp expects to earn about US$500,000 from the SoftBrands software in the first 12 months and expects to see at least 100 percent growth every year, he said.
Korean developers critical of new construction rules
Written by Chun Sophal, FRIDAY, 26 SEPTEMBER 2008
Builders say regulations could stifle Kingdom's construction boom but others see rules bringing order to chaotic sector
AN association of Cambodia's leading foreign developers has lashed out at recently approved regulations requiring builders to place large cash deposits with the government and obtain a raft of additional licences before breaking ground on new projects.
"Cambodia would be seen as a ‘high risk' country if the new regulations on housing development take effect," said Shin Woo Kim, a legal adviser to the Korean Real Estate Development Association (KREDA), whose members are involved in some of the Kingdom's most ambitious construction projects.
The Finance Ministry in July issued the new rules, which require all developers to obtain licenses from an Inter-Ministerial Task Force, purchase construction site insurance and deposit at least two percent of the total project cost in a ministry account at the central bank.
The Finance Ministry said the regulations will tighten up a largely unregulated construction sector, and set this coming Tuesday as the deadline for all developers to apply for new licences.
But Shin urged the government to delay the law until next year.
"Developers normally have to sign many contracts with partners and related parties. The regulations would make these negotiations more difficult," he said at a seminar earlier this week at the Finance Ministry.
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THE BEST PERIOD FOR ENFORCEMENT TO BEGIN IS IN THE FIRST QUARTER OF 2009.
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Govt to consider delay
Ngy Tayi, an undersecretary of state at the ministry, defended the rules, saying they would protect developers and customers. But he added that the government would consider the delay request. "We will evaluate the suggestion, but we can't delay as long as one year," he said.
Five hundred developers operate in Cambodia, but only 80 have obtained government permits, the ministry said, adding that only 20 companies have applied for the real estate valuation licenses.
Sung Bonna, president of the newly formed Cambodian National Valuation Association, agreed that rushing to enforce the regulations would stifle the construction boom.
"I think the best period for enforcement to begin is in the first quarter of 2009," he said.
Risk and confusion
Finance Minister Keat Chhon, however, told the seminar this week that the regulations would generate more tax revenue and service fees, and improve project management.
"The real estate market in Cambodia has become a confused and high-risk process. Both housing developers and their clients have become increasingly nervous," Keat Chhon said.
"We think the regulations will strengthen the development sector by boosting customer confidence and creating sustainable economic growth.
"They will also bring the housing development market into compliance with national and international standards," he added.
Licences cost between 1.5 million riels (US$375) and 12 million riels and remain valid for two to five years, depending on the size and scope of the project, according to the Finance Ministry.
One prominent local business leader who did not want to be named welcomed the new rules. "Some of the construction that is being done is a disaster waiting to happen," he said.
Prey Veng bridge set to grow trade with Vietnam
Written by MAY KUNMAKARA
WEDNESDAY, 24 SEPTEMBER 2008
The Japanese government is behind the US$70 million project to increase land links in Asean and stimulate trade in the region
CAMBODIA and Japan will accelerate construction of a new bridge over the Mekong River under a more than US$70 million project to improve Asean road links by 2011, public works officials told the Post Monday.
Touch Chankosal, undersecretary of state for the Ministry of Public Works and Transportation, said construction of the 2,200-metre bridge - connecting Kandal and Prey Veng provinces - will begin in 2011 if Japanese and Cambodian officials complete their preliminary studies.
"We are currently working with [Japan] to prepare a detailed study of affected areas, traffic flows, the environmental and social impact [of the project] and economic growth potential," Touch Chankosal said.
He added this was the third in a series of studies to assess the impact of the bridge project.
"Our partner is focusing on the costs of construction, while we are working on mine clearing and compensation fees for local people affected by the project," he said.
Touch Chankosal said the bridge was part of a strategy to improve trade between Cambodia and its Asean neighbours.
"We have worked for three years to build this bridge, and it will be completed by 2014 if all goes smoothly," he said. A Cambodian official involved with the project, and who refused to be named, said Monday the grant project was first proposed to Japan in 2001 and that initial studies in 2004-06 pinned the cost at $74 million.
"The recent study shows that past estimates do not account for the high price of construction materials, so the grant will be higher," he said.
He said Japanese advisers have conducted careful studies of affected areas and initial results look positive, but added the project remained conditional on limiting the negative impact on local communities.
Pol Sittha, an official at the Ministry of Economy and Finance, said the bridge's primary economic impact would be to improve national trade by providing a better conduit to markets in Vietnam and elsewhere, but that local residents would benefit as well.
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Estimates do not ACCOUNT for the high price of construction materials.
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"Once the bridge is completed, we will have more opportunities with our Asean neighbours, but it will also ease traffic and improve transport across the river," Pol Sittha said.
Touch Chankosal said Cambodian officials are waiting for results from the latest impact study, which he expected some time in November.
"Now, we can't do anything but wait," he said.
Seng Choun, a provincial public works officials with the Neak Leung ferry that runs cargo and passengers across from Kandal province, said the new bridge would have a substantial impact on the local economy.
"The ferry takes more time to cross the river, especially during national holidays," he said. "Also, the ferry prices have not gone up even though petroleum prices continue to rise."
He said the new bridge would open up the provinces to increased overland trade with Vietnam. "This bridge will connect the West Mekong in Kandal province to the East Mekong in Prey Veng along National Road 1 leading to Svay Rieng and Vietnam," Seng Choun said.
Commercial arbitration council expected to launch
Written by HOR HAB AND BRENDAN BRADY, WEDNESDAY, 24 SEPTEMBER 2008
THE government is close to establishing a commercial arbitration body to keep disputes in-country and prevent those involved from going to court, commerce officials say.
"Companies with problems won't need to go overseas anymore," said Mao Thora, an undersecretary of state at the Ministry of Commerce.
"With commercial disputes in the past, the parties involved filed their cases to Singapore because there was no court in Cambodia to address commercial problems," he said, adding, however, that in its current proposed form, the National Arbitration Council (NAC) could not deliver legally-binding decisions.
The bill, which falls under the 2007 Law on Commercial Arbitration, is being reviewed by the Council of Ministers and should be passed once a new government is formed, Mao Thora said.
If approved, the NAC would be limited to non-criminal cases where both parties have consented to accept its judgment, he explained, adding that appeals would be passed to the civil court.
He said that the US$500,000 earmarked for startup costs from a larger $10 million Asian Development Bank loan for financial sector development would likely be expanded to cover costs for a permanent facility.
The body would be expected to become self-funded over time from user commissions.
Business leaders said they were pleased with the panel in principle, but were hesitant to commit to using it until it had proven its integrity.
"Our members have said they will only use it if it performs properly. If it has corruption and is not fair, then they will not use it," said Som Chamnan, manager of the Cambodian Federation of Employers and Business Associations, which represents a wide swath of industries in the country, from garments to finance.
"So far we have no guarantee, we will see," he added.
Govt-private committee
Hem Vandy, from the ADB, which helped to draft the bill, said a government-private sector committee would be charged with running the body and elaborating on its administrative procedures, including setting user fees.
He added that the body would be staffed by local officials with backgrounds in Cambodian law and commerce.
"It sends a positive message about Cambodia's investment climate, and it should be a good mechanism to prove that Cambodia is moving forward and ready for the Cambodian Stock Exchange," Hem Vandy said.
Hor Soneath, a business environment specialist at the World Bank's private sector arm, the International Finance Corp (IFC), acknowledged that the NAC's requirement of joint-party consent provides a loophole for conflicting parties to not cooperate with the council.
But he expected the body would get a boost from "peer pressure in the private sector to use the arbitration centre and not have their reputation tainted".
The IFC helped to draft the bill bringing the council into existence.
"Resolving commercial disputes has always been difficult here," Hor Soneath said.
He added that there were significant advantages to having a commercial-specific arbitration body.
"It should be faster, more high quality and less costly than going through litigation in the main court system," he said.
"The body will offer judges with skills and background knowledge specific to the sector so they understand what the parties involved are talking about ... having a commercial arbitration body is the natural evolution of a developed business environment."
CTN’s Youth Channel Set for January Launch
Cambodia’s first youth-oriented television channel will launch in January 2009, CTN General Manager Glen Felgate said Wednesday. The free-to-air commercial satellite channel, called “MYTV,” has been the subject of internal discussions at CTN since early 2008, Felgate said, and ongoing focus groups have been conducted to determine the programming lineup, which will include teen dramas, educational documentaries and music programs. “There is an emerging youth market—a ‘mobile phone generation’—with modern tastes and trends that now needs to be catered for. This is the audience MYTV will cater to,” Felgate wrote by e-mail. “As was the case with CTN, millions will be spent on creating the channel and millions will be spent on the operation of the channel,” he added. A number of companies have expressed interest in advertising on MYTV, Felgate said. Information Minister Khieu Kanharith confirmed Wednesday that he had granted CTN a license to operate the new channe.
Cambodian commercial banks told to triple capital
PHNOM PENH, Sept. 23 (Xinhua) -- The National Bank of Cambodia (NBC) has tripled the minimum capital requirement for commercial banks in the Kingdom in an effort to tighten and strengthen the banking sector, national media reported Tuesday.
According to a copy of an NBC directive, commercial banks in Cambodia are now requiring to have a minimum capital of 150 billion riel (about 36.5 million U.S. dollars), the Cambodia Daily newspaper said.
Commercial banks will be allowed to maintain the current capital requirement of 50 billion riel (about 12 million U.S. dollars) if they have an influential shareholder that is a bank or financial institution with an investment grade rating from a reputable rating agency, the directive said.
While the Cambodia's four main banks - Acleda, ANZ Royal, Canadia and the Cambodian Public Bank - are likely to be unaffected by the change in conditions, it remains to be seen how many of the country's 17 other commercial banks will measure up tothe new rules, the newspaper said.
In addition, the country's six specialized banks, which only make loans and do not take deposits, must also increase their minimum capital to 30 billion riel (about 7.3 million U.S. dollars) unless they have a bank or financial institution influential shareholder with an investment grade rating, according to the NBC directive.
All existing banks have until 2010 to meet the new requirements, the directive states.
NBC Director General Tal Nai Im said that the new commercial bank requirements are aimed at making it more difficult for prospective banks to enter the sector in Cambodia.
"Some banks that don't have the minimum might have to withdraw," she was quoted as saying.
Hun Sen plans to visit Doha, Qatar
Wednesday, 24 September, 2008
By Arvind Nair
CAMBODIAN Prime Minister Hun Sen is expected to pay a state visit to Qatar next January as part of efforts to strengthen bilateral relations, reports said.
Hun Sen is also scheduled to stop by Kuwait and the United Arab Emirates.
The visit is part of a new government strategy that aims to make Cambodia a target destination for more Middle Eastern travellers.
The move comes amid efforts by Hun Sen to strengthen ties between Cambodia and the Gulf nations.
Cambodia last month signed a direct-flight agreement with Qatar. Cambodia’s Minister of Tourism Thong Khon was quoted as saying that a similar agreement with Kuwait was expected soon.
In April, Qatari Prime Minister HE Sheikh Hamad bin Jassim bin Jabor al-Thani announced a $200mn investment in Cambodia’s agriculture sector, while Kuwait last month pledged $546mn in soft loans to upgrade irrigation systems and roads throughout the country.
Cambodia has more than 300,000 ethnic Muslim Cham residents. Cham communities are currently marketed to Muslim tourists, Cambodia Association of Travel Agents has said.
“Cambodia has a Muslim Centre and other sites of interest, and several restaurants serve halal food,” the sources said.
Cambodia sees biofuel promise in jatropha
Filed from Singapore
9/24/2008
Energy Current
STUNG TRENG, CAMBODIA: Cambodia-based process rubber and crude palm oil exporter Mong Reththy Co. plans to grow jatropha on more than 100,000 hectares (24,711 acres) of land in the country. Mong Reththy has started a pilot project on six hectares (15 acres) of land in the Stung Treng province.
The pilot project produced eight tonnes (8.8 tons) of jatropha oil per hectare, company chief Mong Reththy said during an interview with the Phnom Penh Post. Mong Reththy expects the oil to fetch as much as US$720 per tonne overseas.
Mong Reththy entered into a joint venture with UK-based D1 Oils Plc last year to grow jatropha on 100,000 hectares (24,711 acres) of land in Stung Treng. The agreement is subject to the success of the pilot programme.
Mong Reththy said the company has also roped in a South Korean firm to assist in planting the crops. The company will receive US$400 million in funding to develop the plantations and build a biodiesel plant in the province.
The government of Cambodia sees biofuel from jatropha as an alternative source of energy that can be tapped to reduce the country's oil dependency and alleviate poverty among rural communities.
Chup rubber plantation privatized
Written by Chun Sophal, MONDAY, 22 SEPTEMBER 2008
THE Chup Rubber Plantation will be handed over to a private company next month, according to the plantation's director general, Mak Kimhong, becoming the last of Cambodia's rubber farms to leave government hands under a plan to boost private investment.
The 13,000-hectare plantation will pass from government control after bidding has been finalised, Mak Kimhong said, adding that at least five local and international companies have submitted bids.
"I think the government has made this decision [to divest] because a private company would be better able to manage the rubber operations," he said.
Chup has exported some 8,000 tonnes of rubber annually in the past several years but hopes to up that to 15,000 tonnes by 2013, he said.
Mak Kimhong said only about 5,000 hectares of the plantation is currently available for resin collection.
Ly Phalla, director general of the Rubber Department at the Ministry of Agriculture, Forestry and Fisheries, said the government began privatising its plantation holdings in late 2007.
Arjun Goswami, country director for the Asia Development Bank, told the Post last week that divestment of state-owned enterprises could be vital in bolstering private sector enterprises.
"Private control will always be more effective than state control," he said.
Real-estate sector is in danger of collapsing in Cambodia?
The Chinese apartments: the market is saturated
22-09-2008
By Ky Soklim
Cambodge Soir Hebdo in English
Click here to read the article in French
The real-estate agencies and investors will meet on Tuesday 23 September at the Ministry of Economy in order to assess the situation and supervise the sector.
The housing availability in Phnom Penh is likely to be higher than the demand, believe several observers of the sector, forecasting a burst of the real-estate bubble.
“The real-estate sector is in danger of collapsing if the crisis continues further, particularly regarding the Chinese apartments”, believes Sung Bunna, director of the largest agency of Phnom Penh, Bunna Realty.
According to the director of Visal Realty, the purchasing price per square meter is allegedly even decreasing in some neighbourhoods of the capital city: if the market doesn’t take off within a year, it’ll result in a crisis”, he says, emphasising that the current slowdown could be the consequence of the election period, traditionally bad for business.
However, other professionals of the real-estate sector think that the commotion observed during these last months is due to a speculation which isn’t linked to the market reality: “The land prices increased because well-off people bought several houses with the intention to sell them again”, indicated a real-estate broker.
Two other factors explain the recent increase: the foreign investments in the real-estate sector and the economical development.
It is estimated that between 8,000 and 10,000 apartments are built each year in Phnom Penh.
The expected meeting on Tuesday 23 September at the Ministry of Economy will allow the professionals to prepare themselves for the coming market changes and to supervise the sector: out of approximately one hundred real-estate agencies in Phnom Penh, only about twenty have the required license.
Dubai Group in first Cambodia investment plan
Tuesday, 23 September, 2008
Bloomberg
SINGAPORE: Dubai Group, an investment company managing more than $40bn on behalf of the emirate’s ruler, said it may invest in Leopard Capital’s Cambodia fund, the group’s first investment in the Southeast Asian nation.
“We are interested in Cambodia,” said Lim See Teik, a senior private-equity analyst at Dubai Investment Group, the asset management unit, in an interview late on Friday in the Cambodian capital Phnom Penh, where he attended an investment forum organised by Leopard Capital. “There seems to be a lot of potential.”
The prospect of oil and gas development and political stability under the administration of Prime Minister Hun Sen are luring foreign investments in Cambodia. The economy of Southeast Asia’s second-poorest country, which abolished money and markets under the Khmer Rouge three decades ago, grew 9.5% a year from 2000 to 2007, the fastest pace in Asia after China.
Dubai Group has invested in other Southeast Asian countries, except for military-ruled Myanmar, said Lim, 41, who is based in Kuala Lumpur.
The group bought a 30 percent stake in Malaysian bio-diesel company GBD Investment Ltd for $49.5 million in April.
"Cambodia is probably the missing link in the jigsaw,'' Lim added, declining to say how much Dubai Group will invest.
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Cambodia's Leopard Group could manage investment from the UAE-based fund, with sights set on energy, agriculture and property development.
'Opportunities'
Dubai Group, which includes seven units with interests in asset management, conventional and Islamic banking, private equity and insurance, was set up as part of Sheikh Mohammed Bin Rashid Al-Maktoum's plan to diversify Dubai's economy.
Leopard Capital has invested in a housing project in Siem Reap.
The fund has identified potential investments in agriculture, commodities processing, a fast-food restaurant, banks, power plants and hotels, promising returns of about 25 percent a year, Chief Executive Officer Douglas Clayton said.
Earlier investments will offer much higher returns, he added.
"There is no shortage of opportunities,'' Clayton said. "Here, there are too many deals and not enough money; the country's changed faster than the perception has changed."
Leopard Capital told Bloomberg News it is taking longer than expected to raise the targeted $100 million amid the global financial turmoil.
The fund has raised $12.6 million and is set to attract additional commitments following meetings with investors from 17 countries in Phnom Penh last week Clayton, said.
Tougher environment
"The fundraising environment for everyone is a bit tougher right now given the Western banking crisis, but there are still plenty of investors out there looking for safe havens of growth, and private equity in Cambodia is certainly one of the few in Asia,'' said Clayton.
Cambodia's stock market, scheduled to open by the end of 2009, will have a capitalisation of as much as $2.5 billion in 2014, or about 20 percent of the nation's gross domestic product, said Ken Stevens, chief investment officer of Leopard Capital. Leopard Capital plans to cash out of most of its investments through share sales in the local market.
"The key thing is the development of a capital market which has sufficient breadth and depth to allow exits from investments,'' Dubai Group's Lim said.
"That would be a key concern for us,'' he said.
No information on the investment was available on the Dubai Group's website, and a company spokeswoman would not confirm or deny Dubai Group's plans.
There's more than casinos on Koh Kong
Monday September 22, 2008
ACHARA ASHAYAGACHAT
Bangkok Post
"Mr Thaksin has shown interest in leasing Koh Kong Khrao, an 80 sq km island off Koh Kong, to develop an entertainment complex..."
Thai tourists are being reminded that the Cambodian border province of Koh Kong offers much more than just the casinos for which it is famous.
Mayuda Mang, deputy chief of the Tourism Department of Koh Kong, said at the Greater Mekong Subregion (GMS) workshop on biodiversity conservation and tourism development in Bangkok that the 11,000 sq km province has a wide variety of tourist attractions.
"Koh Kong is home to the country's largest mangrove areas and we still have several small pristine islands eligible for ecotourism development," said Ms Mayuda.
She said that no matter how volatile relations between the two countries have been in recent months, Koh Kong and the opposite province of Trat have remained on good neighbourly terms.
Trat has sent experts to help Koh Kong villagers preserve mangrove forests, said Ms Mayuda, adding: "We appreciate that cooperation and would like to see deepened collaboration on nature conservation in our country."
However, she conceded that Road No 48, which was jointly opened by then-deputy prime minister Somchai Wongsawat and Cambodian Prime Minister Hun Sen, with a bridge linking the Thai border to Koh Kong and on to Phnom Penh, would inevitably attract all kinds of investors, traders and gamblers to Cambodia.
The Thai government gave financial support to build the road.
It takes about one hour to drive from Trat to Koh Kong and another three hours to go on to the capital Phnom Penh.
The owners of the casino projects are Thais and Cambodians and gamblers come not only from Thailand, but also from China and Taiwan, as well as a few locals.
Asked how much progress Thailand's former prime minister Thaksin Shinawatra had made in his reported investment in Koh Kong, Ms Mayuda said he had taken 10 interested parties to meet Hun Sen last April, but none of them, including Mr Thaksin, had yet confirmed they had initiated any projects.
"The picture will become clearer after Hun Sen's new government is up and running. Until that time, probably only two or three investors might seriously want to pursue business in Koh Kong," Ms Mayuda said.
Mr Thaksin has shown interest in leasing Koh Kong Khrao, an 80 sq km island off Koh Kong, to develop an entertainment complex, but she did not know how negotiations were progressing.
She also said that a South Korean company had been given a 99-year lease to develop hotel, entertainment and eco-tourism businesses on Koh Yo, another small island off Koh Kong.
And a Kuwaiti investor has pledged US$15 million (511 million baht) to help transform Cambodia into an agro-business hub.
Koh Kong's efforts to lure different kinds of tourists is part of Cambodia's wider strategy to develop the industry nationwide so that the impoverished country will not continue to rely on its top drawing card, Angkor Wat.
Anne-Maria Makela, senior tourism adviser for the Netherlands Development Organisation, said at the workshop that too much focus has been placed on Angkor Wat and Siem Reap, and the country should bring more communities into the tourism picture.
The Commercial News: Foreign firm proposes Sihanoukville investment project .
EverGreen Success & Asia Resort Development, a Hong Kong-Korean joint venture company, proposed its Sihanoukville investment project Sep 18 to Prime Minister Hun Sen at his residence in Kandal’s Takhmao district. The project includes the construction of a five-star hotel, golf course, resort, casino, park and hospitals.
Leading cement maker to expand production
Written by Nguon Sovan, FRIDAY, 19 SEPTEMBER 2008
200m investment hoped to decrease Cambodia's reliance on expensive imported construction materials, as building boom continues to create demand
KAMPOT Cement plans to invest US$200 million into production in order to triple its output by the end of next year as a local construction boom continues to push demand for cement, according to one of the firm's top officials.
Khaou Phallaboth, president of the firm's Cambodian minority stakeholder, told the Post that Kampot Cement would increase its current production from one million tonnes to three million tonnes by the end of 2009 on predictions that total domestic demand will rise over the next five years from three million to seven million tonnes, as heavy foreign investment fuels a surge in construction.
He also said the company has its sights set on the export market down the road if international prices remain high.
Kampot Cement launched in January of this year as a $127 million joint venture with Thailand's largest industrial conglomerate, Siam Cement Group (SCG), controlling a 90 percent share, and Cambodia's Khaou Chuly Group holding the remainder. Khaou Phallaboth said the Cambodian partner's share would double to 20 percent by next year.
While the plant's current production of one million tonnes a year represents nearly half of all domestic production, the company has to import from Thailand another half million tonnes at increasingly unfavorable prices in order to fill local orders, Khaou Phallaboth said.
He said that despite the growth in local demand for cement, Cambodia's exorbitantly high energy costs, which are three times higher than those in neighboring Vietnam and Thailand, continue to pose a major obstacle to the industry's expansion.
"So once we increase our production, we will switch from using heavy fuel to a coal-fired power plant," he said. "It will cost us $70 to $80 million at first, but it will save us several million dollars in energy costs every year after that."
Opposition party lawmaker Yim Sovann said that he supports industrial self-sufficiency, but expressed concerns over the effects on the surrounding communities of a coal-fired plant, which he said would "seriously damage the environment and health of local people if it is not built according to international standards".
Others, however, played down the potential effects of the plant, while saying Cambodia was too reliant on imported construction materials.
"It will be very good to reduce our reliance on imports from foreign countries, and we should support the use of local products," said Ith Priang, secretary of state at the Ministry of Industry, Mines and Energy.
"Oil has been really expensive, so a clean-coal power plant is a good, cheaper alternative.... There should not be any concern over the environmental effects because we will thoroughly inspect the plant to make sure it is in compliance."
Friday, October 3, 2008
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