The conglomerate Chip Mong Group yesterday signed an agreement with Thailand’s Siam City Cement to begin a feasibility study for what could be a $200 million cement factory in Kampot province with the capacity to produce as much as 1.5 million tons.
The two companies have not submitted a plan to the government for approval, but depending on the results of the study, the factory would be completed in two years, said Philippe Arto, managing director of Siam City Cement.
“Assuming positive outcomes from our study, we will build a new cement plant which will provide Cambodia with a strong business for both local consumption and export,” he said.
Mr Arto said investment could reach $200 million, but many of the details of the project are still being worked out.
In addition to having a construction and real estate division, Chip Mong is the sole distributor of Siam City’s Camel brand cement. Chip Mong produces concrete, is building a brewery, and distributes a number of products, including produce, oil and construction materials.
Leang Meng, president of Chip Mong Group, said Cambodia’s demand for cement reaches about 2 million tons per year.
He would not reveal the name of the new brand or what districts are under consideration as a location for the plant.
“[The location] would be in Kampot province,” he said. “We are talking with suppliers that will supply machinery.”
The factory would be in direct competition with Kampot Cement, a joint venture between Khaou Chuly Group and Thailand’s Siam Cement Co, which is not related to Siam City.
If Chip Mong settles on Kampot province, it would also place the new factory near the refurbished railway, which began transporting Kampot Cement earlier this year.
Khaou Phallaboth, president of Khaou Chuly Group, said he expected the demand for cement to increase next year as the construction industry recovers.
His factory can only produce 1 million tons, and since most of Cambodia’s cement is imported, the Chip Mong venture wouldn’t necessarily cut into Kampot Cement’s business, he said.
“I think that is fine to us. We cannot expect to be the sole exclusive monopoly in the country. Competition is welcome. It is healthy,” he said.
(Additional reporting by Tim Sturrock)