No bank, no improvement

[PHNOM PENH POST]

A worker mills rice at Chhoeung Kam’s mill

Local rice traders have been able to build their businesses over the past three years by after working with ACLEDA Bank to access more working capital.

Chhoeurng Kam, 44, a rice-mill owner in Kandal Khanglech vill-age, in the Phnom Srok district of Banteay Meanchey province, said his family began a  small-scale rice-milling operation in 1993 with about US$30,000 in capital.

In 1997, however, Chhoeurng Kam decided to suspend operat-ions, as a civil war seemed likely. In 2005, he opened a larger rice-milling operation with the financial support of relatives.

But he lacked the capital to buy enough rice, so in 2008 he sought a loan from ACLEDA Bank to expand production so he could meet the demand for milled rice in Cambodia and neighbouring countries.

So far, Chhoeurng Kam has taken out three loans from ACLEDA Bank — the first for US$30,000, the second for US$100,000 and the current loan for US$130,000 — to buy more unmilled rice to stock his warehouse soon after the harvest season began.

“I increase the loan amounts gradually because I borrow money to buy more unmilled rice to keep,’’ he says, adding that his mill can produce 15 tonnes of rice a day.

“Nowadays, I produce rice to sell, and most of it is exported to Thailand and Kampong Cham.”

Chhoeurng Kam admits his mill has been producing second-quality rice (broken rice) because there is a demand for it.

But he says he’s ready to raise more capital to modernise his mill and improve the quality of his product if the market demands it and more farmers turn to growing high-quality rice.

“I will take out an extra loan for improvements if the market requires it. I will not let my market be lost,” he says.

Chhoeurng Kam explains that the price of unmilled rice fluctuates. In late June, it was 7200 baht a tonne, but after milling, the price rises to 12,000 baht a tonne.

“My main task is to produce enough rice to meet my export orders,” he says.

Chhoeurng Kam estimates that his mill buys about 80 per cent of the rice grown in the district, which consists of six communes.

“I was inspired to set up a rice mill in my home town so I could employ some local people. I now have a staff of about 20.”

Banteay Meanchey province ACLEDA branch manager Lay Chham says the  majority of his clients are farmers who produce rice, and the bank covers as much as 80 to 90 per cent of  loans.

Because of better transport links between Poipet and markets, he believes people will diversify into opening businesses.