The Khmer Mekong Foods processing factory in Phnom Penh. (Photo by: Souen Say)Wednesday, 27 May 2009
Written by Soeun Say
The Phnom Penh Post
PICH Chan, general manager of Khmer Mekong Food Enterprise, walked into a supermarket in Phnom Penh in 2003, and he was dismayed.
He counted 90 different products that had been imported from neighbouring countries that could have been made in Cambodia.
"I wanted to see a Khmer product at markets," he said. "My friends and my relatives said my juice was good, so I started to think about producing juice for the market."
In late 2005, Pich Chan invested US$40,000 in a fruit-juice processing enterprise, and now four years later, his business produces juice from mangoes, pineapples, tamarind and guavas.
With eight workers, Khmer Mekong Foods is a small business only producing about 50 cases of juice a day. A case, which holds 24 bottles, is sold to retailers for $7, according to Hok Sovanna, Khmer Mekong Food's marketing manager.
But Hok Sovanna says Cambodians are starting to acquire a taste for fruit juice after initially shunning it.
"Now Cambodians have started to accept its flavour with up to 80 percent natural fruit," he said.
But despite increasingly positive feedback about the product, in 2007, Khmer Mekong Food lost $60,000.
Pich Chan blames the losses on his own lack of marketing expertise.
"I only have skills at producing not at selling, that's why poor marketing is our weak point" he said.
Also, as a small enterprise, Pich Chan says it has been impossible for his company to break into the international market because he cannot produce enough bottles to fill a shipping container, which is necessary to supply countries like the United Arab Emirates, Canada and the United States.
"I was sad to hear that they need one big container per month. I regret that I could not meet their demands," he said, adding many other Khmer agricultural products face the same limitations.
In the next one to two years, Pich Chan hopes to expand his company so he will be able to export his product overseas.
But the economic crisis has hit his company hard. Since late 2008, sales have dropped between 30 and 40 percent from the same period last year. Nevertheless, Pich Chan says that by continuing to improve the quality of his juices and diversifying his product line he will be able to increase Khmer Mekong Foods' market share in Cambodia.
In order for him to follow through with his expansion plan, however, Pich Chan says the company will need to borrow money. But, he says, Cambodian interest rates are too high at up to 12 percent per year.
"There are a lot of things to produce, but I don't have the capital. I need to find which bank has a low [interest] rate," he said.
Pich Chan said that he wished Cambodia had a bank with an especially low rate for small and medium-sized enterprises.
"I need a chance to borrow money to improve my business," he said.
Inside Business is a new section every Wednesday that will profile Cambodian small and medium-sized enterprises.
He counted 90 different products that had been imported from neighbouring countries that could have been made in Cambodia.
"I wanted to see a Khmer product at markets," he said. "My friends and my relatives said my juice was good, so I started to think about producing juice for the market."
In late 2005, Pich Chan invested US$40,000 in a fruit-juice processing enterprise, and now four years later, his business produces juice from mangoes, pineapples, tamarind and guavas.
With eight workers, Khmer Mekong Foods is a small business only producing about 50 cases of juice a day. A case, which holds 24 bottles, is sold to retailers for $7, according to Hok Sovanna, Khmer Mekong Food's marketing manager.
But Hok Sovanna says Cambodians are starting to acquire a taste for fruit juice after initially shunning it.
"Now Cambodians have started to accept its flavour with up to 80 percent natural fruit," he said.
But despite increasingly positive feedback about the product, in 2007, Khmer Mekong Food lost $60,000.
Pich Chan blames the losses on his own lack of marketing expertise.
"I only have skills at producing not at selling, that's why poor marketing is our weak point" he said.
Also, as a small enterprise, Pich Chan says it has been impossible for his company to break into the international market because he cannot produce enough bottles to fill a shipping container, which is necessary to supply countries like the United Arab Emirates, Canada and the United States.
"I was sad to hear that they need one big container per month. I regret that I could not meet their demands," he said, adding many other Khmer agricultural products face the same limitations.
In the next one to two years, Pich Chan hopes to expand his company so he will be able to export his product overseas.
But the economic crisis has hit his company hard. Since late 2008, sales have dropped between 30 and 40 percent from the same period last year. Nevertheless, Pich Chan says that by continuing to improve the quality of his juices and diversifying his product line he will be able to increase Khmer Mekong Foods' market share in Cambodia.
In order for him to follow through with his expansion plan, however, Pich Chan says the company will need to borrow money. But, he says, Cambodian interest rates are too high at up to 12 percent per year.
"There are a lot of things to produce, but I don't have the capital. I need to find which bank has a low [interest] rate," he said.
Pich Chan said that he wished Cambodia had a bank with an especially low rate for small and medium-sized enterprises.
"I need a chance to borrow money to improve my business," he said.
Inside Business is a new section every Wednesday that will profile Cambodian small and medium-sized enterprises.
6 comments:
Pich Chan has a very good vision toward what Cambodia needs. Many things could be pruduced locally but we consumed imported products as our tradtion. The problem I can see on that are:
1-It's very hard to compete with neighboring country.
2-Even we all know that Cambodia is WTO member, the government still have to find ways to restrict some imported goods, and enhence local production by assisting people like Pich Chan through his hardship. Assisting, helping and encouraging people to the " Made in Cambodia" process is the duty of the related ministries such as Argriculture, Commerce,Industry etc...
There were argicultural surplus in Cambodia every year and that hurts both our farmers and people who need works. Well, it's very hopeless for Cambodian people nowaday, because thos in charge of taking of their people only have their mind in making easy money and getting more power. Cambodian leadears need to change their vision toward how to run the government.
Bravo !!!!!!!!!!!!!Pich Chan!!!!You are realy khmer not the same Ah Hun Xen dislike our homeland,Hun Xen destroy his own people and his nation!!!
I think beside the local fruit juice made, so the local people didn't interest in it while they can find those fruits anywhere and cheaper. So they should consider the exotic fruits, or invent others kind of flavors for the local markets. On the other hand, it's the packaging beauty. The most important thing, the marketing, the government should promote and educate the local people to interest and support the local products. The price is also an important issue: local products mostly more expensive than the imported ones. Try your best!
Prices are competitive. The most important thing of Cambodian product is the quality of product especially food products. Some food products are used with uncontrolled chemical substance that in turn can damage the health of users. 30 years have been passed and khmers should produced various goods and product for their own use. Which unit who is responsible to control the quality of those products? PM should consider the long term effect of chemical substances on the health of the public rather than politics.
the best way is open his company for public share or invite foreign investment to share with. and try to make it fresher and encourage local people to plant more fruit without chemical . talk to ministry of commerce to push export quality control department with sign that can let oversea company recognize and try to reduce import stuffs from neighbor or increase import tax higher .
he totally has brilliant vision , I would like to share my marketing skill for his company if I got chance :)
Cheers
don't give up, every business start-up need time and funds before it can becom lucrative; it's the nature of doing business, any type of business. it's all about take risks because some risks are very rewarding eventually. i think in the case of cambodia, since there it is like starting all over again due to the KR destruction, etc, there are plenty of good opportunity and abundant of raw materials especially in agriculture to produce a niche in the food and drinks market. i think this is a good business. hang in there, my dear; don't give up so easily, persevere and study and work hard to improve it. it will take trials and errors along the less-traveled road to get to where you want to be, but never give up already. please keep making juice drinks and concentrate on the marketing skill to get more sales and markets for your products. plus, it is a good sign to have local products, especially in food and drinks products for the local markets as well as exports too perhaps. we should be proud of khmer made stuff. there are lots of rooms for improvement and learning as well. god bless all khmer entrepreneurs.
Post a Comment