The Mong Reththy Group Co Ltd plans to build the country’s first palm oil processing plant, able to produce candles, soap and cooking oil for the domestic market.
To fund the facility, the Cambodian government has borrowed $8 million from a state-owned Chinese bank that it will lend to the company, said Mong Reththy, president of the profitable agricultural and development group. The money should become available in February, he said.
The loan was obtained through the government to save the company paperwork, Mong Reththy said.
Currently, all palm oil-based goods sold in Cambodia are imported. Mong Reththy said 30 to 40 shipments of goods made from processed palm oil come into the country every month.
The company owns a palm oil plantation, but has been unable to export its goods because there is no overseas market for raw palm oil. Instead, the palm fruits have lain unused in the fields, Mong Reththy said.
The processing plant is expected to make a profit in its eighth year, he said.
Mong Reththy’s other major new agricultural initiative is tapioca. He said he has been encouraging farmers and demobilized soldiers around Sihanoukville to produce as much as possible, guaranteeing he’ll buy it.
“I need to buy 200 tons of tapioca. I’ll buy from any farmer with a fair price,” he said.
The tapioca plant is processed into flour at a $3 million plant in Sihanoukville that the Mong Reththy Group built last year. There is huge international demand for the flour; countries such as Malaysia and South Korea buy it and use it in MSG, Mong Reththy said.
The Mong Reththy Group currently farms 1,000 hectares in Sihanoukville and has plans to plant on 800 more. Private farmers in the area cultivate about 1,000 hectares.
One hectare produces about 30 tons of raw tapioca at a cost of about $200. The plant takes eight to 14 months to grow. At an average price of about $20 per ton, a farmer can make a $300 to $400 profit on each hectare, Mong Reththy said. Each ton of raw tapioca is processed into about a quarter-ton of tapioca flour.
“I don’t think the farmers should worry about selling their [tapioca],” Mong Reththy said. “I spent millions of dollars to invest in the factory.”
This year, the company has collected 112,000 tons of raw tapioca and exported 28 tons of flour.