November 28, 2011

Rubber industry growth a priority


Cambodia aimed to become one of the region’s main rubber producers over the next few years despite the industry’s low international recognition, officials said during the second Global Rubber Conference, held in Phnom Penh on Friday.

To that end, the Kingdom had encouraged companies and investors to expand production capacity, Ly Phalla, director-general of the General Directorate of Rubber Plantations at the Ministry of Agriculture, Forestry and Fisheries, said.

But the government also sought to catalyse so-called downstream operations, which comprised value-added manufacturing using home-grown rubber, to slow the rate of exports from Cambodia, he said.

“The introduction of a downstream sector is poised to create extra employment and promote the consumption of domestic products to reduce reliance on imports,” Ly Phalla said.

Yim Chhay Ly, chairman of the Council for Agricultural and Rural Development, noted the growing importance of the Kingdom’s rubber crop, saying the government had privatised eight state-owned rubber plantations in 2008 and 2009.

At the same time, Cambodia had begun to grant more economic land concessions of less than 10,000 hectares for rubber plantations, he said, although all of that raw product had been exported.

“To make a difference, the government has focused on the downstream development of the rubber industry, that is, helping local rubber producers to supply the production of rubber products in Cambodia,” Yim Chhay Ly said.

Rubber plantations in protected forests roused controversy in the Kingdom earlier this month. Villagers in the protected Prey Lang forest, in Kampong Thom, protested against a rubber concession held by the Vietnamese company CRCK Rubber Development, the Post reported.

In 2010, Cambodia produced 0.29 per cent, or 42,000 tonnes, of the world’s rubber latex supply, ranking it 16th among other natural rubber-producing countries, according to Yim Chhay Ly.

The sector faced several other challenges that hindered its development, Mak Kim Hong, president of the Association for Rubber Development of Cambodia, said.

Low international acceptance of the Kingdom’s rubber, unexploited access to international markets and limited availability of plant materials were among the hurdles to be cleared before the sector matured, he said.

The government was working to solve these problems, Chhay Ly said, pointing to initiatives such as a review of customs regulations and attempts to find less expensive energy sources for producers.

Growing demand for rubber in world markets, along with a conducive growing environment in Cambodia, were  reasons why the government had chosen to prioritise the rubber sector, Mak Kim Hong said.

“It is now one of the most significant opportunities for growth in Cambodia’s agricultural sector,” he said.

Ly Phalla said the ultimate goal was to reach 300,000 hectares of rubber plantations, with a production capacity reaching 290,000 tonnes, by 2020. Plantations totalled 181,400 hectares in 2010.

At a government-private sector forum last week, Prime Minister Hun Sen mentioned the possibility of establishing a government-mandated quota for rubber exports, similar to the goal of exporting one million tonnes of milled rice by 2015.

Agriculture experts and the World Bank, however, have expressed doubt that this goal can be achieved.

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