Mong Reththy—The Path from Porter to Agribusiness Tycoon

Mong Reththy is one of Cam­bodia’s best-known big businessmen and head of the Mong Reththy Group Co Ltd, which has an extensive portfolio of interests, including large sugar cane, palm oil and acacia plantations, the import-export business and construction. Also a CPP senator, the 53-year-old from Takeo province has been used by critics as an example of the collusion of big business and political interests in Cambodia, with several large-scale land-concessions and land-swap deals in particular raising eyebrows recently. The Cambodia Daily’s Kay Kimsong and Fergal Quinn spoke to Mong Reththy this week about the future of agribusiness, his supposed government ties and some very historic footwear.

Q: List and describe the businesses the Mong Reththy Group is involved with.

A: My main business these days is agribusiness. The industry had faced many problems but now it is getting better. The price of palm oil has tripled in the last few years and our yield is growing all the time. Acacia and sugar cane are also growing in value. Altogether we have planted around 10,000 hectares [7,000 hectares of oil palms in Sihanoukville and 3,224 hectares of sugar cane and acacia in Koh Kong province], which we hope to extend a great deal in the coming years.

The Oknha Mong Port in Koh Kong is also growing quickly. We are planning to increase the water depth from 5 meters to 7 meters, which will mean bigger ships with larger loads can dock there.

I also have a lot of interests in construction and we are building more and more houses. We also have experience in building ports and are planning more. One of them is in Sihanoukville and the other is in Kampot. In the next few days we plan to start work on a new Appeal Court and municipal court on the outskirts of Phnom Penh.

Q: Your company has been awarded a number of government land-swap contracts. There have been complaints that the new ones are being built too far from the city center and you have gained a lot in the exchange.

A: The reason the government has decided to rebuild these buildings is because the previous offices lacked facilities. The new buildings will be a big improvement. When the swaps happened, the price of the old land, and the new land plus the building was the same. But now it is true that city center land increased in price a lot. But you must remember that the land outside fetches a better price too.

Also, those who have attacked the plans exaggerate how far away they are. The new courts will be out near the new Royal Academy of Fine Arts building, before the airport. From the actual workers there have been no complaints. They know they will be much happier in the new buildings.

Q: How is the construction sector progressing?

A: In developing Cambodia we will have to change a great deal. The older construction and infrastructure here is of poor quality. Some of the new buildings are not being built with an eye to the future either. I believe many of the current flats and buildings in Phnom Penh will have to be knocked down and replaced with taller buildings, especially as land in the city becomes more expensive.

Q: What makes palm oil so attractive?

A: When I looked at maps of the palm oil industry a few years ago, I could see its potential but only Thailand and Malaysia had plantations. I felt Cambodia should get in on the business, as it has good soil for this crop. In the future, the price of palm-oil products is expected to keep increasing.

I also felt it is an industry that can add to poverty reduction in the country. If I spend $1,000,000 investing in palm oil, $600,000 of that will find its way back to the people who live there. If I invest in a place, I provide schools, hospitals, irrigation, etc.

Q: How many people do you employ overall?

A: Over 10,000 people including families who are making a living as a result of my businesses.

Q: Tell me about how you started?

A: In 1979 we were all equal. Nobody had anything. These sandals [he points to a pair of Khmer Rouge-era sandals displayed in his office] were all I had then. I keep them here [in the office] to remind me where I came from.

If we forget who we are, we get into trouble. If I develop a bad reputation, everything I do or build will be destroyed and forgotten. If a business makes money but it is dirty money, I will reject it. I could survive with one pair of sandals so why do I need bad money?

Q: How did you start in business?

A: I had little education. In 1979, I became a porter at the Phnom Penh port. Then in 1980, I started working for the Central Council [the People’s Republic of Kampuchea equivalent of today’s Council of Ministers] as a construction worker. I helped build the park in front of the Royal Palace. This was the first success for me, and I built up from there.

Q: What has influenced you?

A: Before the 1993 election I traveled extensively. Singapore in particular made me realize what a small pond Cambodia is. Thailand, Malaysia, China, Taiwan and Korea all gave me many ideas. London is an amazing city. I look at the infrastructure there and think maybe Koh Kong can be like that some day. We would have to clear the chickens and animals from the main road first though!

Q: Was it hard to apply these ideas to Cambodia?

A: Cambodia was very slow for many years. The lack of financial support from the banks was a big problem. For example, after 1979 the government had seven rubber plantations but the processing plant was very old, so it could not compete. I built three new factories between 1995 and 1998.

Q: How did you finance this growth without banks?

A: I went out and found investors myself. I did not get loans as the interest rates were too high. It was very hard at times. The investment in the rubber plantations was big and when the price of rubber slowed down it was tough, especially during the [1997-]1998 Asian financial crisis. The business was almost dead many times. It would take a year to explain all the problems I had in those days.

Q: Did your political connections help you through them?

A: Some say you must have connections. But businesses that fail always complain that others had unfair advantages. The fact is there are many examples of businesses that have nothing to do with the government but are still successful.

Q: But you are a senator. Does that not give you an unfair advantage?

A: I think I can help politically because of my experience on the ground. I always protect the interests of the public. I have no desire to use my position to enrich myself. The Chinese have a saying that wealth never lasts for more than two generations. I want to change this in Cambodia and help create more sustainable wealth.

Q: How do you intend to do this?

A: I believe that by building more agricultural infrastructure, we can create wealth in the longer term. Look at palm oil. It will be 2013 before I recover all the losses I incurred by investing in it. Lots of other people make money before I do. I will take the long-term risk.

Q: You have many critics who see it differently.

A: I stay on my plantations for a third of every month. I see the improvements on the ground. Some will accuse me of anything.

For example, in 1997 they said I was growing marijuana because they confused the types of plants they saw on my plantation with marijuana. They say I plant palm oil just because I want to sell the land in the future. But how am I supposed to do that when they are land concessions? Then I hear I am supposed to have illegal sugar cane plantations in protected areas around Bokor National Park. But the soil there is no good for sugar cane!

Q: What about the 100,000-hectare Stung Treng land concession? Wasn’t that illegal? [Under the Land Law, which went into effect on Aug 30, 2001, land concessions are limited to 10,000 hectares. According to the Ministry of Agriculture’s Web site, Mong Reththy’s 100,852-hectare concession contract was signed after that date, on Nov 23, 2001.]

A: That is untrue. It’s like the other allegations against me. All false. The people who make noise are against development. For me, the schools and the hospitals I leave behind are evidence of the good I have done. There was nothing in that area before. I am trying to develop it.

Q: The recent Global Witness report criticizing the links between big business and politicians here singled you out.

A: I wanted to meet [Global Witness] face to face, for them to show me their evidence that I was doing something illegal, but they would not do it.

They said I was conducting illegal logging through my Koh Kong port. But there are police and customs officials there, so how can I use it for illegal logging? There is no such logging in any of my businesses. The authorities are responsible for other exports though my port, not me….

Global Witness has the right to make a report, but I have the right to meet them. I am open. Come and talk. Or I will go to Britain or the US. No problem. Any time.

There are two types of businesses. Ones that make prisons bigger, and ones that make them smaller. I develop my businesses in a good way. There are other tycoons that could learn from me though.

Q: Do these accusations make you angry?

A: I was a monk for five years. It taught me patience. I know the truth, so I don’t care what they say. They call me a criminal but my [Khmer Rouge-era] sandals tell me otherwise.

Q: How well do you know Prime Minister Hun Sen?

A: He was in the same pagoda that I attended [Wat Neak Kvoan in Phnom Penh]. In general, parents sent their sons to the pagoda back then because they were poor and could not support a big family. So we all had similar stories.

I knew [Hun Sen] then but not so well. Back then he was very gentle. He respected the monks and the rules. Then after 1979 he showed up as the prime minister! Sure Samdech has changed in ways, but I still think he has that old pagoda boy mentality. We all do.

Q: Do you believe in a free market economy?

A: The problem with Cambodia is there are too many imports and not enough exports, especially with agricultural products. All we export is garments and textiles. From my point of view, if the market is open we will compete better.

Q: But with no restrictions on trade, will Cambodia be able to compete with the bigger fish?

A: I believe we can. We have lots of untapped knowledge in the agricultural sector, from small farmers to big land concession managers. We can create revenue not by selling the land, but by using it to create revenue.

Q: How can the government encourage that?

A: There is not enough financial support for the agribusiness. More low interest loans for this sector would be a good idea. Maybe the government can encourage the banks in some way to do this.

Q: What is the future for the Mong Reththy Group?

A: We want to improve Phnom Penh by building upwards, and discourage people from migrating to the cities by improving conditions in the countryside. Very few have built as many schools and hospitals in the countryside as me.

 

 

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