Fertilizer Factory to Open Next Year

KHMER TIMES
CHEA VANNAK



To meet local demand for affordable fertilizer, a $2 million factory is currently being built in Phnom Penh and is due to begin operations early next year. This is a joint venture between Bayon Heritage Holding Group and Japanese-based Nangoku Kosan Co.

Speaking at a ceremony announcing the Nangoku Agriculture Development joint venture on Monday, Bayon CEO Chan Sokheang claimed that once fully operational, the factory would meet five percent of the country’s total demand for fertilizer, or 30,000 tons.

“Establishing the factory is due to the demand for fertilizer to increase agricultural output,” Mr. Sokheang said. “It will help farmers reduce their expenses. Right now they spend quite a lot in buying costly imported fertilizer.”

The factory promises to sell its fertilizer at lower prices than current imports fetch, with Mr. Sokheang estimating prices will be between $15 and $17.50 per 50-kilogram sack, compared to up to $27.50 for imports.

Mr. Sokheang added that the fertilizer would carry the tag line “Made in Cambodia to Japanese Standards.”

Materials for fertilizer production will initially be mostly imported from Nangoku Kosan, with who Bayon has worked since 2007, explained Mr. Sokheang. He said that long-term plans would involve reducing material imports from 85 percent to about 60 percent, hopefully through Cambodian sources.

Cambodia presently imports about 700,000 tons of fertilizer a year, mostly from neighboring countries, said Mak Soeun, deputy director-general of the Ministry of Agriculture’s agriculture department.

He hailed the factory, which will join two existing factories in the country, as a good step in reducing imports, and highlighted government efforts to boost Cambodian production of goods and commodities currently being imported.

The fertilizer market in Cambodia is evolving rapidly to meet farmers’ demands. It is a free market, led by a competitive private sector with prices determined by market forces. Fertilizer supply has increased rapidly in response to high demand prompted by the shift towards crop intensification.

According to the UN Food and Agriculture Organization (FAO), fertilizer is important for achieving an increase in crop productivity.

“If there is a sufficient supply of nutrients in the soil, crops will grow well and produce high yields. Since the majority of the poor depend largely on farming for their livelihoods, increasing crop productivity is a key to improving the income of farmers and rural people and, ultimately, to reducing poverty,” said a recent FAO report.

In the first three months of the year, Cambodia imported more than 160,000 tons of agricultural fertilizers, according to the Ministry of Agriculture. Most of Cambodia’s imported fertilizer comes from Vietnam.