20000119

Cambodia seeks foreign funds for ailing rubber

CHUP PLANTATION: Cambodian state rubber growers are trying to expand production and encourage small-holder cultivation but know that only an infusion of foreign funds will breathe life into their industry.

The Cambodian rubber business, centred in Kompong Cham province, northeast of the capital Phnom Penh, has languished with minimal investment for years.

Many trees in the Chup rubber plantation in eastern Kompong Cham province were planted during French colonial rule before World War Two and are way past their latex-producing prime.

Chup is the largest of seven state rubber estates which altogether cover some 55,000 hectares and produce some 40,000 tonnes of dry rubber a year.

Agricultural and industry experts says rubber could be planted on as much as 300,000 hectares of Cambodia's rich, red basaltic soil and annual production could be as much as 200,000 tonnes.

"Our red soil is very good. There are no stones even if we dig one or two metres down. It's very good, fertile soil," the deputy director of the Chup plantation, Sok Sam, told Reuters.

"We have a lot of good soil, but we need more funds to support the plantations," he said.

The Chup plantation covers 15,733 hectares but only 8,360 hectares are being tapped.

Sok Sam said efforts to expand production are being made and 670 hectares of new trees will be planted this year compared with the usual 300-400 hectares a year.

NO PROGRESS ON PRIVATISATION PLAN: The government has been toying with the idea of privatising the plantations since the mid-1990s but no progress has been made.

Officials say the low price of rubber over recent years has stalled privatisation efforts but opposition politicians complain of mismanagement and say little if any revenue from the state-run industry ends up in public coffers.

Sok Sam said the only way the industry will progress is with foreign investment and he supports privatisation.

"The government has to privatise or seek foreign partners to participate in the industry," he said. "I believe the industry can make much progress but it's up to the government to decide."

The governor of Kompong Cham said he was opposed to the wholesale privatisation of the plantations but supported joint ventures with foreign partners.

"Foreign investors can't just come and make profit from the existing rubber here," governor Chieng Am told Reuters.

"They have to bring money to plant more trees. They have the money, we have the land," he said. "We're looking for foreign investors who wants to set up 50-50 joint ventures.

He said potential investors from France, Japan, China and Germany, have been looking into the industry.

SMALL HOLDERS EXPAND TO BLACK SOIL: In the meantime, Sok Sam said he and his colleagues are trying to encourage small-holder production in new areas.

Small-holder production accounts for only a tiny fraction of total output but Sok Sam said he has been seeing good results in some areas previously thought unsuitable for rubber.

"We've seen that trees are growing well on black soil," Sok Sam said. "Even during French rule they never planted on black soil but now we have new experience, we can plant on black soil and the trees grow well."

There are also hopes that a Japanese-funded bridge over the Mekong river will spur investment in the plantations, most of which are on the east bank of the river, now only accessible by slow and expensive ferries.

"The construction of the bridge will help the rubber industry. We plan to expand rubber by another 40,000 hectares when the bridge is finished," said provincial governor Chieng Am.

Work on the $56 million bridge in Kompong Cham town, 75 km (46 miles) northeast of Phnom Penh, began in February last year and is due to be finished by early in the year 2002. -Reuters