ARANEE JAIIMSIN
Bangkok Post
Phnom Penh - Khon Kaen Sugar Industry Plc (KSL), a listed sugar miller, has entered a partnership with a Cambodian tycoon and a Taiwanese investor to establish a sugarcane plantation and sugar mill in Koh Kong province in Cambodia.
KSL holds 50% of the two joint-venture companies, Koh Kong Plantation Co Ltd and Koh Kong Sugar Industry Co Ltd, which were incorporated in Cambodia in April. Cambodian senator Ly Young Phat holds 20% and Ve Wong Corporation of Taiwan holds 30%, according to KSL chief executive Chamroon Chinthammitr.
The three partners will provide a combined investment budget of US$100 million in proportion to their shareholdings to establish and manage the plantation and mill on a site covering 20,000 hectares (approximately 120,000 rai) in Koh Kong.
Of the total budget, $40 million was spent on the plantation and the rest will cover construction of the mill over three years, said Mr Chamroon.
The venture has a 90-year concession from the Ministry of Agriculture, Forestry and Fisheries of Cambodia, and could create as many as 600,000 job opportunities, according to Teera Sanguandeekul, KSL's assistant vice-president.
Mr Phat, an adviser to Prime Minister Hun Sen on investment projects in Koh Kong, was instrumental in helping the venture secure the concession.
The venture will pay no leasing fee for the first five years, after which the fee would gradually increase from $1 per hectare to a maximum of $4.
"The favourable concession eliminates our concerns about Cambodian politics, land occupation and land price, so what remains as our risk factor is the climate for the crop," said Mr Theera.
In addition, the Cambodian government is offering a corporate income tax holiday during the first nine operating years of Koh Kong Plantation Co and Koh Kong Sugar Industry Co. Then, the two companies would pay tax at the ordinary rate of 20% of total revenue, said Mr Chamroon.
Koh Kong Sugar Industry will manage the mill when commercial operations begin in early 2009. Initial crushing capacity would be 500,000 tonnes of cane per year, resulting in about 50,000 tonnes of sugar, said Mr Chamroon. Crushing capacity would rise to one million tonnes a year in 2010 and to 2.5 million tonnes from 2011.
Initially, all of the cane will come from plantations operated directly by Koh Kong Plantation Co. In the longer term, the venture expects to buy 70% of its cane from contract farmers and 30% would come from its own plantations in order to secure supply capacity, said Mr Theera.
Most of the output will be sold in Cambodian market where the current sugar price is 24 baht per kilogramme, considerably higher than in Thailand. Any surpluses would be exported to the European Union, China, Vietnam and Indonesia, according to Mr Chamroon.
KSL holds 50% of the two joint-venture companies, Koh Kong Plantation Co Ltd and Koh Kong Sugar Industry Co Ltd, which were incorporated in Cambodia in April. Cambodian senator Ly Young Phat holds 20% and Ve Wong Corporation of Taiwan holds 30%, according to KSL chief executive Chamroon Chinthammitr.
The three partners will provide a combined investment budget of US$100 million in proportion to their shareholdings to establish and manage the plantation and mill on a site covering 20,000 hectares (approximately 120,000 rai) in Koh Kong.
Of the total budget, $40 million was spent on the plantation and the rest will cover construction of the mill over three years, said Mr Chamroon.
The venture has a 90-year concession from the Ministry of Agriculture, Forestry and Fisheries of Cambodia, and could create as many as 600,000 job opportunities, according to Teera Sanguandeekul, KSL's assistant vice-president.
Mr Phat, an adviser to Prime Minister Hun Sen on investment projects in Koh Kong, was instrumental in helping the venture secure the concession.
The venture will pay no leasing fee for the first five years, after which the fee would gradually increase from $1 per hectare to a maximum of $4.
"The favourable concession eliminates our concerns about Cambodian politics, land occupation and land price, so what remains as our risk factor is the climate for the crop," said Mr Theera.
In addition, the Cambodian government is offering a corporate income tax holiday during the first nine operating years of Koh Kong Plantation Co and Koh Kong Sugar Industry Co. Then, the two companies would pay tax at the ordinary rate of 20% of total revenue, said Mr Chamroon.
Koh Kong Sugar Industry will manage the mill when commercial operations begin in early 2009. Initial crushing capacity would be 500,000 tonnes of cane per year, resulting in about 50,000 tonnes of sugar, said Mr Chamroon. Crushing capacity would rise to one million tonnes a year in 2010 and to 2.5 million tonnes from 2011.
Initially, all of the cane will come from plantations operated directly by Koh Kong Plantation Co. In the longer term, the venture expects to buy 70% of its cane from contract farmers and 30% would come from its own plantations in order to secure supply capacity, said Mr Theera.
Most of the output will be sold in Cambodian market where the current sugar price is 24 baht per kilogramme, considerably higher than in Thailand. Any surpluses would be exported to the European Union, China, Vietnam and Indonesia, according to Mr Chamroon.
2 comments:
Cambodian senator Ly Young Phat holds 20%. It means he put in 20 millions. Where did he get the money from? Being a senator and businessman the same time, he will write laws to protect his corporation. All the textile factory ownera, let's run for senators.
There are not many real investment like this one in Cambodia. All real and experienced investors are blocked by the land price and the corrupt system. How can a company pay millions dollars just for having a license to invest in Cambodia. Moveover, there are lacks of confidences on the government investment policy. So, real investment don't want to involve. To be there you need to be somebody, so then you can maintain your business.
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