Unofficial Translation

Selected Comments at the Inauguration of the Sugar Factory in Chikhor Leu Commune, Sre Ambel District of Koh Kong Province

25 January 2010

I am so glad to be here with our people to put into official use the sugar factory launched by the Sugar Industry Company Ltd, which I call the Koh Kong Sugar Industry Company. The company has come into existence at the collaboration of three shareholders – one from Thailand, one from Taiwan and another by HE Ly Yong Phat, the local shareholder. The three makes a good investment bringing to life again the sugar factory in the Kingdom of Cambodia. Why do we say it is a reinvestment and revival of the sugar industry?

Sugar production is not a freshly new project in the Kingdom of Cambodia. Under the Sangkum Reastr Niyum (Popular Socialist Community) in 1965, under the leadership of Samdech Preah Norodom Sihanouk, our then Head of State, Cambodia had its sugar factory at Kampong Tram of Kompot province. Later in 1968, we had two smaller factories that produced sugar as well at Mehmot in Kompong Cham province and another one at Kompong Kul in Battambang province.

Having said so, I may recall that if the 1970 coup were not to take place, we would not say we have this sugar production here today as a reviving project at all. Because the wrong politics carried out by the coup makers of March 18, 1970, war and destruction had plagued upon us, not only the sugar factory at Kampong Tram of Kompot province but also those in other places, and our infrastructure of all sorts alike. The country later was plunged into the Khmer Rouge genocidal regime and civil war, which caused even more deaths and destructions.

That is why today we are talking about starting all over again the sugar production, and it has happened after we lost a good long 40 years. Though the time has been rather long, still I am so happy today that we finally get the process commencing again.

I may share with you some of the backgrounds about expression of interest by various groups to invest in growing sugarcane and building sugar industry. I was at my wooden house in Takhmao then. We have provided them with good recommendations. We even made efforts to find them a plot of land for sugar production factory to be established. It was so sad that those who came then took pictures with Prime Minister and handed them out for media publicity only. This had repeated more than once. That is why I never set aside my time to meet or listen to this kind of ‘investor.’

I just met the Thai shareholder two weeks ago, whereas the local holder, Ly Yong Phat, I have learned and trusted his works from his investment in building the bridge across the seacoast at Koh Kong province. The Ly Yong Phat’s company is currently putting a new bridge over the Tonle Sap River near Phnom Penh. The company has gained my trust. Because of his successes I provide him and his partners from abroad with more chances so that he can work to set up more local developments.

During my mission to Uddar Mean Chey, HE Ly Yong Phat asked for my presence to put the factory into official use. I said to him to have it done in the month of January 2010. Having flown over a sugarcane field on my way to and from Uddar Mean Chey, I asked to HE Ly Yong Phat how much sugar has been produced and he replied that about 24,000 tons per annum. Isn’t it strange, when I did not meet anyone about this investment, we have the factory in place?

The same is also true about an ethanol factory with a South Korean investment. I never meet the investor or hear of the investment prior to the time when I was invited to inaugurate it. When I asked the Ministry of Industry, Energy and Mines, the project has already been in place and operational with some have gone into export already. The sugar factory here is also similar. I met him only two weeks ago and then he brought out a plan on what to do next.

That is why I make my remarks that for some investors, the real ones, I never even met but their projects have actually taken place, whereas some ‘fake ones,’ despite our recommendation and encouragement, they have just been a bunch of liars. I bring this issue up because this type of investors might continue to seek more land on concession from the Ministry of Agriculture, Forestry and Fisheries, after the reception, they would again leave the land empty or unplanted.

As you all know that this company is short of land for growing sugarcane. Let’s take back those land earmarked for concession and give them to the company. Those ‘fake investors’ are no other than middlemen who lie to get land and sell licenses to other interested persons or companies. I warn you all that land given out on concession, but found to be unused, is subject to confiscation and I would not accept world financial crisis and economic downturn as an excuse at all. It has been too long an extension that has been asked for and provided.

No more extension would be necessary. I seem to have talked too much on this. It is the Ministry of Agriculture, Forestry and Fisheries that has the duty to get all this straightened up.

Now let me get back to the sugar industry setup and production. In fact it is a joint investment between two companies – Sugar Industry of Koh Kong and Sugarcane Plantation of Koh Kong. They both have got a concession of about 20,000 hectares. The Sugar Industry of Koh Kong has just cleared 5,288 hectares and cultivated 2910 hectares of land, whereas the Sugarcane Plantation of Koh Kong has had 4,621 hectares cleared and 4,421 planted. Currently the factory has just harvested 240,000 tons of fresh sugarcane which relatively turns into 24,000 tons of sugar.

With this figure, it has suggested that the factory uses about 2,000 tons of fresh sugarcane for the daily production of 200 tons of sugar. The maximum output rate has been designed to reach 600 tons of sugar per day. This is calling for two third more of raw material. Mr. Chamroon Chinthammit, Chairman of the Board of Director, has just mentioned that the factory outreaching capacity would be 70,000 tons per annum.

According to a study in 1990, each person in Cambodia consumes about five kilogram of sugar per annum in average. That was calling for some 40,000 tons of sugar at the population rate of 8.6 millions. We had to resort to importing the entire amount to supply for the demand. By 2000, because of improvement in living standard, demand for sugar per person has increased to some 7.3 kilograms whereas our population figure was recorded to be eleven millions. As of now I am sure the demand for sugar must be higher.

That is why I am in the agreement with the figure suggested by Mr. Chamroon, because at 70,000 tons of sugar, with the increasing population, we may come close to the level of sufficiency for local demand. I wish the company will become a market for our people’s sale of sugarcane. I also suggest that other companies would do the same for corn and manioc or other raw materials for animal feeds. I am sure the factory here stands in front of us is a huge market for sugarcane buy from the farmers. Indeed, the company will have to provide growing expertise and skill to our people as they have been so doing by providing for free the sugarcane propagates for 80 families to grow on an area of 50 hectares.

I am encouraging the company to not only work on existing area and enlarge its sugarcane farming but also keep contact with our farmers, as I have instructed HE Sok Chenda, Minister attached to the Prime Minister and General Secretary of the Cambodian Development Council to mobilize with the local authorities of provinces adjacent to Koh Kong, like Sihanoukville, Kompong Speu and Kompot, to grow sugarcane for supplying for the factory.

There are three areas of integration between private investment projects and local community development. Firstly, our people will have access to new infrastructure. For example, the company invests in building roads that are also used by our people. As the company wires in electricity to the area, our people can also pay for the use of electricity, whereas the company may participate in building schools, hospital, etc.

Secondly, the investment will bring along job opportunity for our people in the region, and Chairman Mr. Chamroon told me in his visit to my house that the company is in need of up to 2,000 workers to complete a demand of 5,000 or 6,000 workers. I am sure our people are in search for jobs and they would not choose to migrate from their home villages if they have proper information about job availability close by to their homes. Let me take this opportune moment inform our people of about 1,000 to 2,000 job availability in this factory. That is why job creation is indeed one of the objective factors.

Thirdly, the investment project serves as a connection between factory and our people’s production. Our people have had difficult time in their planting for water scarcity. Cultivating sugarcane would give them a better option otherwise. They do not do that because there has no processing plant before. It is in this belief that I would urge HE Ly Yong Phat and the company to communicate with the sub-national level authorities for providing our people with techniques and sugarcane propagates so that they could grow and sell them to the company.

I am so happy with the fact that the country has come to this stage that we have our own sugar factory. As far as food security is concerned, rice is not the only crop to get our attention. Some count in tea leaves as food, whereas others count in coffee. Here, we pay attention to producing sugar which is part of our food need as well. They are not only for local consumption but also for exports. We have the possibility of meeting a surplus of corn, manioc, rubber, bean, etc, and we do not want to export them raw but after processing locally.

The Royal Government is putting more efforts in investment in rice mills, buying agents and warehousing. Every year we have about three million tons of paddy rice in surplus. This would turn to be about two million tons of milled rice. If we sell them in paddy, we would waste rice bran and husk and labor intensity among our people. In Khmer there is a saying that goes ‘there is gold, but there has no paper to wrap it.’ Therefore I wish to urge for thought put in processing for export. Look, here we do not have to sell our sugarcane afresh to another country but turn them into sugar locally.

Step by step we will surely meet our goal. Peace prevails in our country about eleven years now, starting from late 1998, whereas our territorial unity, militarily and administratively, has been achieved but we still have infrastructural integration to fulfill .../.

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