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Kratie’s first cassava processing factory delayed over high costs

Prathna​​   On June 9, 2020 - 10:53 am​   In Cambodia Insider  
Kratie’s first cassava processing factory delayed over high costs Kratie’s first cassava processing factory delayed over high costs

The cassava processing factory invested in by Hong Kong-based Green Leader Holdings Group Co Ltd in Kratie province has been put on hold because of the high cost of production, according to the Minister of Agriculture Forestry, and Fisheries Veng Sakhon.

He said the processing factory was 90 percent complete.

“The company informed the ministry about the delay and still I keep updating it. The company said it still keeps investing in the project but so far they haven’t provided the timeline when they will resume,” he said.

The minister said that the company is concerned about the high cost of production because the Kingdom’s infrastructure is making it less competitive with neighbouring countries.

“The company said after research and valuation it found that the production cost is too high compared with neighbouring countries and the transportation was entirely dependent on Vietnam,” he said.

Sakhon said: “The electricity price in Cambodia is too high compared with Vietnam and Thailand. As I Know the price in Cambodia cost between 600 to 700 riels per kilowatt compare with just about 250 riels in Vietnam so, even though we are trying hard, it is still impossible,” he said.

Private sectors have for a long time complained about the high cost of electricity and transportation.

Lun Yeng, CRF’s secretary-general, said the challenges for the country’s rice sector are not new. “They are still higher than neighbouring countries, so we find it hard to compete in the export market,” he said.

Green Leader Holdings Group Co Ltd is set to invest a total of $150 million in the cassava industry. It first broke ground in 2018 in Kratie province.

The factory is located on 20 hectares of land in Snuol district, making it the largest such facility in Cambodia. It will be able to process some 600,000 tonnes of fresh cassava roots per year, with an annual production capacity of 150,000 tonnes of modified starch.

The Ministry of Agriculture, Ministry of Commerce, and United Nations Development Programme (UNDP) officials has identified approximately 10 nearby farming cooperatives to supply 30 percent of the factory’s annual requirements and estimates it will identify close to another 40 percent for the year after.

According to Sakhon, the company is eyeing mango-processing plants in Kampong Speu and Kandal province from which they expect to get high return.

“I already did the report to Minister of Economy and Finance, who is in charge of the national policy committee about the issue. Our processing cost is too expensive and so is the transportation.

A report from the Ministry of Agriculture shows that Cambodia exported some 996,290 tonnes of cassava slices during the first five months of this year, up 9.7 percent compared with the same period last year. However, exports of cassava flour declined dramatically, by 97 percent to 10,272 tonnes

The minister said that exportation of cassava flour in both 2019 and the first five months in 2020 declined almost 100 percent.

Credited: Khmer Times