October 18, 2011

Entrepreneur urges big industry players to form an exporters’ association


Hun Lak
An entrepreneur who survived the Pol Pot regime and built his business up from a scratch is calling for the creation of a Cambodian rice exporters’ association to unite  Cambodians involved in every level of the rice industry to meet Prime Minister Hun Sen’s goal of a million tonnes of Cambodian rice exported in 2015.

“If we are all together, we will have strength in unity,” says Hun Lak, managing director of Mekong Oryza and secretary-general of the Feder-ation of Associations for Small and  Medium-Sized Enterprises of Cambodia (FASMEC).

Hun says he has checked with the big companies who export rice and found the biggest one exports only about 50,000 tonnes, while most smaller firms export between 20,000 and 30,000 tonnes a year.

 He wants all the stakeholders in Cambodia’s rice industry to sit down together as a result of today’s Cambodia Rice Forum and form such an association.

“I hope after the Cambodia Rice Forum, we will all sit down together and make plans,” he says.
“The quantity of rice is one issue; the quality is another.

“Cambodia is like a new-born baby, so we need to learn from the experience of the international rice business. From this point of view, the financing is a big issue.

“We need banks and the government to strongly support us.

“With this association, all the members will be stronger, and everything will come later, because we have all the strong voices to sit together and we can send a message to everywhere.

“Separately, that would be much more difficult.”

Hun, the sixth in a family of seven children, was born in Phnom Penh in 1966. He worked hard to survive the Pol Pot regime as a young boy, and his father was killed, but the rest of the family survived.

“It was crazy, because Pol Pot wanted all the Cambodian people stay at the same level, with no poor or rich.

“This was a very big mistake.  They killed all the people with an educated background including the professors, the teachers and all the people who had specialised knowledge.

“There wasn’t enough food, so they were so weak and easy to beat to death.”

Having survived and witnessed those horrors, Hun started in business for himself in 1992. Today, he  has an environmental-services and pest-control company called HCC Group with nearly 1,000 employees.

He also owns a share of Hotel on the Monivong.

Hun and a group of others founded the rice merchant company Mekong Oryza Trading earlier this year. Through it, he and his partners intend to invest “in the whole rice chain”.

Hun’s four partners in Mekong Oryza Trading haveall  been in business for 30 years or so. They have a garment factory, hotels, rubber plantations, a pure-water factory and Cambodia’s largest fertiliser distributorship.

Hun and his partners intend to build a warehouse, for which they already have the land, near the new  Phnom Penh river port, 30 kilometres from central Phnom Penh on National Road 1, which goes to Ho Chi Minh City.

“We started with rice trading in the second quarter, and since then we have continued building warehouses, silos and rice mills,’’ Hun says. “The purpose is to create a whole rice supply chain.” 

Hun says the first phase of the new Phnom Penh river port should come into operation on July 1 next year and will be able to load 120,000 TEU, enabling shipping traffic to begin. The second phase, due to begin in 2013, will be completed in 2015, according to a source from the port authority.

In order to address the rice bank concern, Hun and his partners are looking at building new rice mills and silos in Prey Veng, Pursat and Kampong Thom provinces in the near future.

“We are Cambodian people and we don’t want all the paddy to go to the neighboring countries.

“We need to put Cambodians to work. Production here will be better for the Cambodian economy, increase jobs and benefit the people a lot after the milling.

“That’s why we came up with the Cambodia Rice Forum, so all the businessmen could come together and discuss the rice industry – for the first time ever.”

Hun says the Cambodia Rice Forum has been designed to  bring all the players including sellers, suppliers, importers, exporters, transportation companies, and banks “all in one spot, to sit down and discuss their experiences. We also want to display our Cambodian rice to the outside world.

“Now we are ready to export with quality and standard.

“This year, we expect at least 180,000 tonnes of rice exports to the world; in 2010, only 51,000 tonnes were exported. “

In order to meet Prime Minister Hun Sen’s challenge to promote the export of one million tons in 2015, Hun says all the key players in  the private sector and the government have to work hard and in concert.

“The urgent part is the financing.  The main point is the government and the banks have to be concerned about providing the loans directly to the farmers, the rice millers and the rice exporters,’’ he says.

“My message is that all the rice players have to join together and then we can come up with the quantity and standard specificat-ions for big orders from internat-ional buyers.

“If we are Cambodians in the rice business and we run separately, it’s difficult to compete with our neighbours, but if we join together, we can at least have a fighting chance to compete with them.

“We don’t have enough unity yet currently to accept big orders from the international buyers based in European Union and the United States,” he said.

Hun is also promoting the break-bulk river barge transport mode, which can handle 1,000-tonne, 1,500-tonne and 2,000-tonne capacities in one shipment.

Once the bagged rice is loaded into break-bulk barges at the Phnom Penh port, it takes only 48 hours to get to Ho Chi Minh port, on the Mekong, then trans-ship to mother ships that can load 6,000MT and more by using sling nets with a  capacity of 3 MT at a time.

“Cambodian rice goes to Russia, Belgium, Italy, France, and North America,” he said.


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