ASEAN KEY DESTINATIONS
Vietnam rice exporters face Cambodian challenge
Vietnamese rice exporters will face tough competition from foreign countries looking to exploit advantages that Cambodia presents as a beneficiary of the the EBA (Everything But Arms) initiative, says an Econet report.
Under the EBA, Cambodia, as a least-developed-country, enjoys zero tariffs and no quotas for exporting its farm produce, especially rice, to the EU.
"However, Vietnamese companies have not been able to take full advantage of its proximity to a country that produced 2.1 million tonnes of rice in surplus in 2001, and lacks investment and manpower to expand rice cultivation," the report says.
The plan to build a modern rice mill near Phnom Penh announced by a Vietnam-Cambodia joint venture nearly two years ago has made no progress.
Complicated formalities have been blamed for the delays in building a plant that aimed to process rice for export supplied by Cambodian farmers.
Cambodia-Viet Nam Foods Co (Cavifoods) - a joint venture between Viet Nam's Southern Food Corp (Vinafood II) and two Cambodian firms - International Development Co (IDCC) and Green Trade Co, was established in October 2009 with a registered capital of US$8 million.
Cavifoods has since focused on purchasing Cambodian rice for export.
In November 2011, Viet Nam's Thai Thinh Co signed with Takmoa Cambodia a $22.4 million contract to produce rice for export on 20,000 ha in Kompong Cham and Kompong Svay provinces.
Meanwhile, companies from other countries are preparing to enter the Cambodian rice market, presenting a stiff challenge to Vietnamese companies.
In March 2011, Toyota Tsusho, a subsidiary of the Toyota Motor Corp (Japan), joined hands with Thailand's Huay Chuan Rice Co Ltd to invest in Cambodia's rice growing industry.
The alliance, which includes Malaysian investors, has been in talks with Cambodia businessmen for a venture that would set up an export-oriented rice mill.
Takeo Province on the Vietnamese border has been chosen for building the rice mill.
Takeo, 150 kilometers east of Cambodia's deep-water seaport Sihanoukville, is expected to help realise the Cambodian Government's target of exporting 1 million tonnes of rice annually.
Thailand's Asia Golden Rice Co is also working with Japanese partners to invest in Cambodia's rice industry.
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