Sunday, June 27, 2010

Bank's golden opportunity

Sacombank opens a gold-trading subsidiary in Phnom Penh

Photo by: Heng Chivoan
A Sacombank employee in Phnom Penh on Thursday displays some gold that the institution has begun selling.
SACOMBANK’S gold- and gem-trading subsidiary Sacombank Jewelry Company (SBJ) opened its first office in Cambodia Thursday on the back of record global gold prices.

The company launched SBJ (Cambodia) with US$3 million funding from its parent firm after a “detailed” study of Cambodia’s market potential, officials told reporters at a press gathering in the Phnom Penh Hotel on Thursday.

The company plans to buy gold from vendors in Cambodia, then refine it to a higher quality for resale.

“We’ve invested $3 million directly from the parent bank in Vietnam to trade pure gold in Cambodian market in order to cut down the current poor-quality gold being traded by local vendors – that is our first objective,” SBJ Vietnam Chairman To Thanh Hoang said.

“Our second [objective] is that we want this market to trade pure gold made by our company, which we refine with a high-tech refinery system which comes from Australia and Germany,” he said.

The technology can refine gold to 99.9 percent purity and costs $1.5 million per unit, he added.

Sacombank Group chairman Dang Van Tanh said that Cambodia is ripe for expansion, based on research the group had undertaken for the past year.

“Before we decided to open SBJ in Cambodia, we conducted detailed research and set our strategy for the business in Cambodia.
“Although Cambodia has a small population, in the future the jewellery business will be very popular,” he said.

Director-elect of SBJ (Cambodia) Pham Anh Thai said while he could not predict how sales in Cambodia would pan out, the firm’s Vietnam business – which has been trading since March 2008 – had sold an average 10 tonnes of pure gold per year.

“I have no defined targets for this market,” he said.

Tal Nai Im, director general of National Bank of Cambodia, told the Post by phone Thursday that the new gold business would contribute to the economy’s growth.

“We welcome any kind of foreign investment to support our economic growth,” she said.

Dang Van Tanh said the group was also preparing to open a local stockbroking firm if the Cambodia stock exchange goes ahead, as planned, at the end of this year.

(source from Phnompenh post, Friday, 25 June 2010 15:00 May Kunmakara)

Saturday, June 26, 2010

Island project sparks concerns

Photo by: Sebastian Strangio
A fisherman off the coast of Koh Rung Sangleum island, which is expected to be the site of a development project financed by a Hong Kong-based investment firm.

A CONSERVATION NGO collaborating with an investment firm told residents of an island off the coast of Preah Sihanouk province this week that they would be restricted to a 12.3-hectare piece of land in order to make way for a development project, Paul Ferber, the founder of Marine Conservation Cambodia (MCC), said.

Ferber said the meetings between the residents of Koh Rung Sangleum and representatives of Fauna and Flora International (FFI) took place on Monday and Tuesday. He noted that the size of the land could be subject to change.

Toby Eastoe, project manager for FFI, confirmed that the meetings had taken place, and said his organisation was working with the Hong Kong-based investment company Lime Tree Capital on the development project. He said the size of the land for villagers and the details of the development project had yet to be finalised.

MCC, an ecotourism business based on the island, has criticised the restriction that could be imposed on the 92 families who stand to be affected by the project, saying it would constitute an unnecessary impingement on their rights.

“FFI, even with knowledge about the reduction of community land, seems happy to support a concessionaire that has created a master plan without any local consultation, regardless of the effects to the community,” Ferber said by email Thursday.

He said the restriction, which has yet to be approved by the Council for the Development of Cambodia (CDC), would leave “absolutely no room for the village to grow”.

But Eastoe defended FFI’s work with Lime Tree Capital, saying they were working together to mitigate the potential effects of the project on both the environment and the local community.

He said Lime Tree Capital was granted a concession with a 99-year-lease in mid-2008, and asked FFI later that year to act as environmental consultant for the development of the island.

He said he could not provide the size of the concession.

“Because the company who took this lease on is a responsible company, they asked us to come out and conduct a survey, which basically tells us what sort of flora and fauna are on the island,” he said, and added that FFI staff conducted their first survey on the island in early 2009.

The meetings held this week, he said, were intended to outline provisional village boundaries, though he noted that these boundaries were at the centre of ongoing discussions with the CDC.

“There is a master plan that is being talked about with the CDC, [but] they are still negotiating exclusion areas that won’t be developed,” he said.
CDC officials with knowledge of the Lime Tree Capital project could not be reached for comment this week.

Eastoe said he was “probably going to advise the company to expand the exclusion area” following his trip to the island this week, but emphasised that such decisions were not FFI’s to make.

“We’re advisers to Lime Tree. We can’t tell them what to do,” he said.

Lime Tree Capital could not be reached for comment.

Eastoe said Ferber may have personal reasons for raising concerns about the size of the exclusion area.

“The exclusion area at the moment probably scares Paul because his bungalows are outside the exclusion area and the company probably has a right to throw Paul off the island,” he said.

However, village chief Lay Thai said Wednesday that he, too, was concerned about the project and the proposed restriction.

He said a group of 50 villagers had attended this week’s meetings with FFI representatives, who he said told them to immediately stop cutting down trees and constructing buildings.

Like Ferber, Lay Thai said he was worried that the restriction would prevent the village from growing.

“The FFI officials pointed out the border of the land for us to live on, and they don’t allow the villagers to build new houses when their children want to live separately from their parents after they get married,” he said.

Eastoe, however, said FFI had taken the unusual step of working with a development company because it saw an opportunity to help reduce the environmental impact of rapid coastal development.

“This is a new thing for FFI – we usually work with the government – but there are a lot of new land concessions along the coast, and we’re worried that if someone doesn’t work with them, things will get out of hand,” he said.

“We want to make sure developers don’t just wipe everything out and build hotels.”

Ferber said that he would be happy to work with FFI and developers, so long as conservation projects do not harm the local community.

“If FFI want to set up a conservation project and support the community, they have my full support and cooperation,” he said.

First Cambodia overpass road cut ribbon by PM

Prime Minister Hun Sen inauguarated first overpass on Thursday 24 June 2010. This overpass would help to avoid traffic jame along Preah Monivong Boulevard. The new "Sky bridge" costs of US$ 6 million, it is the first overpass in Cambodia. It was born. There will be second, thirsd, fourth and so on.

PM Hun Sen annouced that the municipality is conducting a feasibility study for a second overpass -- this one to be build on Russian Federation Blvd near Preah Kossamak Hospital- that he said would help to faciliate the dialy commute of around 170, 000 vehicles and 800,000 motorbikes.

Sem Panhavuth, Road Crash and Victim Information System project manager at Handicap International Belgium, said the premier was wise to draw attention to the benefits of wearing a helmet.

“According to our data ... the number of motorbike fatalities from head injuries decreased from 86 percent in 2008 to 76 percent in 2009 because more people are wearing helmets,” he said.

In 2008, there were 297 road fatalities in Phnom Penh and 1,638 throughout Cambodia, while last year saw 243 road fatalities in the capital and 1,717 throughout the Kingdom, he said.

Phnom Penh traffic police chief Heng Chantheary said he estimated that 90 to 95 percent of the public obeyed traffic laws, and that most violators were young people.

“In general, we have seen that the number of traffic accidents has decreased because more people are respecting the laws these days,” he said.
“Accidents usually occur when people are driving drunk or driving over the speed limit.”
(source from Phnompenh post newspaper, Friday 25 June 2010)

Friday, June 25, 2010

Govt seeks to boost tourist arrivals by land

CAMBODIA is simplifying procedures at border crossings in order to boost the number of tourists arriving by land to over a million visitors per year, Tourism Minister Thong Khon said Wednesday.

Streamlining requirements for vehicles crossing the border was a particular goal in the ministry’s bid to raise the number of visitors to Cambodia, he said at a workshop exploring different ways to increase international visits by land. “We are trying to find solutions to the issue of insuring vehicles who cross the border, and also in processing customs documents,” he said.

Some 334,273 tourists entered Cambodia overland during the first four months of the year, with 157,708 travelling from Thailand, 163,797 from Vietnam, and 12,768 from Laos, Ministry of Tourism statistics show.

Some 855,697 tourists crossed into Cambodia by land last year, out of a total of 2.16 million visits to the Kingdom from abroad, statistics show. Cambodia had 10 land crossings in operation between Vietnam in 2009, along with six entry points to Thailand and one to Laos.

Streamlining border crossings requires addressing shortcomings in a number of key areas, Cambodia Association of Travel Agents president Ang Kim Eang said.

An inadequate number of processing counters at the border causes congestion at official checkpoints, he said, and there are still too many procedural requirements for cars and buses to meet on arrival.

Cambodian bus transportation firm Paramount’s president Sok Chanmony said that moving tourists is made more difficult by buses and cars being allotted parking at places that are not tourist destinations. “I think that if the ministry can facilitate ways for buses and cars to carry passengers straight to their destinations, the number of tourists ... will increase,” he said.

On the Frontier of investment

New private equity fund targets Cambodia’s still-developing agriculture sector

Photo by: Pha Lina
A woman sells rice, sometimes referred to as Cambodia’s “white gold”, at a market in Phnom Penh on Tuesday.
A PRIVATE equity fund run by Frontier Investment and Development Partners’ is on track to raise US$200 million to plough into the agricultural sector in Cambodia and Laos, according to its associate director Kwan Tuck Pong.

In constrast with earlier reports in London’s Financial Times stating that the first close for the fund was due next month, officials told the Post that the company is holding out to raise its first $50 million by September this year.

“More or less, we’re on track [to reach $200million] simply because we are very focused on agriculture. In the last six months or so there’s been a lot of interest with regards to this sector in Cambodia,” said Kwan Tuck Pong via phone on Wednesday.

Cambodia’s agricultural sector has been regularly touted by the government as a key area for economic growth.

Cash crops such as rubber have attracted millions of dollars’ worth of foreign investment and, according to the Ministry of Agriculture, Cambodia plans to increase paddy yield by as much as 3 tonnes per hectare by 2012.

According to Frontier, managers looked at “many sectors” before deciding on agriculture as the focus for its first $50 million – but Kwan Tuck Pong did not rule out expanding the fund’s focus in the future.

The fund is set to make investments worth between $5 million and $30 million, which must make up less than 20 percent of a single project.

According to Kwan Tuck Pong, Frontier is in the process of building confidence with potential local partners, which, he said, “takes time”.

But his positive outlook for the future of investment is shared by many fund managers currently operating in Cambodia – many of which have struggled to hit fundraising targets over the past two years.

The latest private equity fund to launch in Cambodia, Emerging Markets Investments (EMI), aimed to attract $20 million by its first close at the end of 2009, but only raised $10 million.

However, EMI managing director Joshua Morris was pleased with the result.

“We were satisfied with the amount that we raised. I think the latter months of 2008 and the whole of 2009 was a relatively difficult time with the developed markets undergoing a lot of financial strain. There wasn’t a lot of risk capital looking at more emerging markets like Cambodia,” he said.

As Morris moves forward in finding targets for EMI – which is set to invest $250,000 to a maximum of $2 million per company – other managers are considering their below-target fundraising not only as success, but as an opportunity for growth.

Leopard Capital’s Managing Director Douglas Clayton said he is pleased with its fund, which had originally aimed to earn $100 million in Cambodia and now has interests in ACLEDA bank, Phnom Penh’s Kingdom Breweries and a seafood-processing plant near Sihanoukville.

“Leopard Capital raised $34 million for Cambodia during the worst global financial crisis in eight decades, which depleted investor appetite for illiquid investments everywhere,” said Clayton.

“As it turned out, the reduced fund size carried some positives, as it allowed us to access some interesting [small to medium-sized enterprises] that would have been considered too small for a $100 million fund.”

Meanwhile, other leading businessmen are considering their options in the Kingdom.

Cambodia Emerald, a private investment fund touted as being worth $100 million when it launched in November 2007, was effectively put on hold as the global financial crisis hit in 2008.

“We postponed the fundraising efforts at the advice of several investors. It was a difficult but wise decision,” managing directors Brad Gordon and Peter Brimble said in an email Tuesday.

Both, however, say they have faith that Cambodia still offers opportunities, and they pointed out that New York seed investors, such as hedge fund LR Global Partners, did not want the fund to close completely.

“We believe strongly in the future of the country and have recently received positive encouragement about restarting our activities in the future from investors,” they wrote.

Wednesday, June 23, 2010

Decentralisation gets a mixed NGO review

THOUGH attendance at local governance meetings has increased over the past two years, participation has been largely passive, and many people – especially women and the poor – say they have doubts that decision-makers will take their views into account, according to a report released by a local NGO Tuesday.

Pact Cambodia’s Second Citizen Satisfaction Survey, which follows a 2008 baseline survey, was designed to monitor the progress made with respect to the goverment’s decentralisation effort.

That effort began in 2001 with the passage of laws on commune administration, management and elections, and was implemented with the first commune council elections in 2002.

The survey, conducted between December and February, included 2,341 respondents from 130 communes across eight provinces: Battambang, Kampong Cham, Kampong Thom, Kandal, Prey Veng, Pursat, Svay Rieng and Takeo.

More than half of all respondents surveyed reported that they had attended at least one local governance meeting within the past year, compared with around 25 percent of respondents in the 2008 survey who reported having attended at least one commune council meeting in the previous year.

But of those who reported that they had attended meetings, only 5 percent said they had spoken during a meeting, and only around half of all respondents surveyed said they agreed with the statement that “when a person like me speaks, the leaders listen”.

The report also found that compared to other participants in local governance meetings, “women and the poor are less likely to speak and less likely to believe that their views will be heard”.

Erin Blake, Pact’s monitoring, evaluation, reporting and learning coordinator, cautioned that the increase in citizen participation at the local level may not be as significant as the figures suggest, because the survey had been amended this time around to include not just commune council meetings, but all local governance meetings.

This is where real democracy begins, at the grassroots level.

He said, though, that the survey’s findings were generally positive, and showed that there have been some “small but important” improvements in local governance over the past two years.

“It bodes really well for democracy in Cambodia,” he said. “To me, this is where real democracy begins, at the grassroots level.”

The report also found that overall citizen satisfaction with local governance had improved over the last two years, backing up the results of a similar report that was released by the UN Development Programme on May 31.

More than 80 percent of respondents said that commune councils “use resources well”, up from around 60 percent in 2008. And around 30 percent of respondents said commune councils were “very responsive”, up from around 20 percent.

Leng Vy, general director of local administration and deputy head of the National Council for Sub-national Democratic Development (NCDD) Secretariat, said during a speech at the report’s launch on Tuesday that the survey could be used in formulating policies to improve
decentralisation efforts.

“The findings will be important for different stakeholders and institutions of the government in order to carry out reforms,” he said.

(source from Phnompenh newspaper, Wednesday, 23 June 2010 15:03 Brooke Lewis)

Buzz of success for forest honey hunters

Provincial honey collectors sign sales contract

Bees bred at the Tokyo Grain Exchange last year. Cambodian honey collectors are to see a rise in the amount of honey they bring to markets. Bloomberg
HONEY collectors from four provinces signed an agreement with the Cambodian Centre for Study and Development in Agriculture (CEDAC) Tuesday in order to bring more to market.

CEDAC president Yang Saing Koma told the Post that under the agreement bee-hunting communities would supply 4,000 litres of pure forest honey per year for sale in 10 shops across Phnom Penh.

“We hope that, through this agreement, CEDAC and forest honey hunter communities will benefit from both increasing their income and preserving natural resources for each community,” Yang Saing Koma said.

Pich Phony, president of the Cambodian Honey Hunter Community, which represents about 300 members in Mondulkiri, Koh Kong, Kratie and Preah Vihear provinces, said honey would be sold to CEDAC for US$9.70 per litre.

He added that the honey hunter communities in the four provinces are able to collect from 5,000 to 8,000 litres of honey in total per year at present.
According to MSME Bee Project, only 10 percent of the 500,000 litres of honey demanded domestically each year is currently supplied by Cambodia’s collectors.

It is hoped the deal will also help strengthen community conservation of hives and natural forest resources.

“Previously, we collected honey by cutting tree branches and then taking the whole nest, but we no longer do so now.

“We collect only the honey, and we leave the nest and young bees there so that they will produce honey again,” Pich Phony said.

CEDAC hopes to buy honey from collectors in three more provinces if the scheme goes well.

(source from Phnompenh post newspaper, Wednesday, 23 June 2010 15:01 Chun Sophal)

Restoration of Baphuon temple

France has committed over half a million euros to projects aimed at restoring Baphuon temple in the Angkor temple complex and eliminating counterfeit pharmaceutical drugs. According to two agreements – signed by Sun Saphoeun, secretary of state at the Ministry of Foreign Affairs, and French Ambassador Jean-Francois Desmazieres on Tuesday – France will give €480,000 (US$588,619) for the continued renovation of Baphuon temple and €123,500 for the fight against counterfeit drugs in 2010. Renovation work at the temple began in 1995 with assistance from the French Ministry of Foreign Affairs, and in the past 15 years has cost around €7.8 million, Desmazieres said in a statement released by the French embassy.

Arrest in Samlot land row

A VILLAGE representative involved in a land dispute pitting residents of Battambang province’s Samlot district against military officials and an unidentified Korean company was arrested last week in connection with the case, villagers said Monday.

Sim Mey was questioned on May 24 and arrested the following day, said Man Ny, who was also questioned but then released. Man Ny added that the questioning concerned their alleged involvement in the torching of a tractor belonging to an official with Royal Cambodian Armed Forces Military Region 5 in 2008.

Man Ny said he suspects that Sim Mey was arrested for his continued advocacy on behalf on 141 families involved in disputes over 705 hectares of land. On April 4, Sim Mey was shot and injured by an unidentified gunman in an incident that villagers suspect was related to the dispute.

Tuy Bun Ly, deputy commander of RCAF Region 5, said Sim Mey had been arrested over a complaint filed in 2008 by a military officer whom he identified as Pen Savoeun. Provincial court prosecutor Sar Yos Thavrak could not be reached for comment Monday.
(source from Phnompenh post, Tuesday, 01 June 2010 15:01 May Titthara)

Market plan meets rejection

Local company abandons scheme after encountering strong opposition from vendors

Photo by: Pha Lina
A mix of umbrellas, tarpaulins and corrugated metal protect Daun Penh district’s Phsar Chas, or Old Market, from the rain on Tuesday.

A LOCAL company has backed out of plans to overhaul Phsar Chas, or Old Market, in response to strong opposition from vendors, a company representative said Tuesday.

On Sunday, Overseas Cambodian Investment Corporation Ltd (OCIC) invited 360 vendors from the Daun Penh district market to a presentation on plans to transform it into a modern “business centre”, and had solicited feedback from them afterwards via written surveys.

Nou Netra, an investment manager at the firm, which also owns Canadia Bank, said the vendors had voiced unanimous opposition to what was presented.

“Vendors were not interested in our company’s development plan, so we have decided to abandon our development plan,” he said.

According to the OCIC’s vendor survey, the company, which was behind the development of complexes including the Sorya and Sovanna shopping centres, laid out plans to develop Phsar Chas – the oldest market in Phnom Penh – into a “business centre including a modern market, restaurants, entertainment, residential apartments and wide and safe parking spaces”.

Vendors who attended Sunday’s meeting and filled out the surveys said Tuesday that they had been made wary by the fact that vendors at other markets had been evicted once massive upgrades were approved.

Touch Sreymon, a clothing vendor at Phsar Chas, said she and her colleagues have heard of several cases in which vendors were asked to pay exorbitant fees for stalls in upgraded facilities.

“Vendors have the ability to repair their shop by themselves if the authority does not develop [the market],” she said. “We are not asking any company to help us.”

Sok Pagna, 52, a fruit seller at the market, said vendors were surprised by the invitation to give their feedback to the company, but remained staunchly opposed to the project nonetheless.

“We want to know why they want to develop our market while we are doing our business. We did not agree to allow them to develop because we haven’t money to buy a new shop,” she said.

She added: “If they come to develop without asking the vendors, we will go to protest everywhere to ask for help.”

Daun Penh deputy governor Sok Penhvuth declined to comment on plans for Phsar Chas on Tuesday, referring questions to So Vantha, the market’s director, who could not be reached for comment.

Phnom Penh deputy governor Pa Socheatvong also could not be reached.

(source from Phnompenh post newspaper,Wednesday, 23 June 2010 15:03 May Titthara)

Tuesday, June 22, 2010

Nine most horrible places in the world-Bassac apartments

Bassac apartments, Cambodia
(Photo: huanqiu. com)
Bassac apartments was one of the architectural jewels of Cambodia, the innovative apartment complex designed in the early 1960s by Lu Ban Hap.
Now it is a crumbling ruin inhabited by squatters. The prospects for this community have triggered more concerns.
(Photo: huanqiu. com)

Cambodian PM says war left over 90,000 disabled people

PHNOM PENH, June 21 (Xinhua) -- Cambodia's Prime Minister Hun Sen said on Monday that the civil war that lasted for more than two decades had left over 90,000 disabled people and about 300,000 children who are under their dependence.
Delivering a speech at the marking of the third anniversary of the Cambodian Veteran Day, Hun Sen said that his government has to help these people for their daily survival.
He said that in his name as president of Cambodian Veterans Association (CVA), he along with his wife and other generous people have built nearly 400 homes for the disabled veterans.
Hun Sen said the civil war in Cambodia was a result of the coup staged against then Prince Norodom Sihanouk in 1970.
While talking about the individual difficulties, Hun Sen said CVA has been well cooperated with friends around the world and in particular in the regional cooperation.
He said that CVA was admitted as a full member of the ASEAN Alliance for Veterans on April 26, 2010.
In his speech, Hun Sen highly valued veterans who had sacrificed a lot for the nation. 
Editor: Deng Shasha

Cotton exports

THE SELDAMAEX cotton-processing plant exported its first 100 tonnes of unprocessed cotton and 360 tonnes of cotton seed last month, managing director Kong Chan said last week. Based in Battambang province, it shipped 50 tonnes of unprocessed cotton to Vietnam, 40 tonnes to China and 10 tonnes to Japan, and the seed all to Vietnam. “The exports to factories in these countries are for sampling the quality of the cotton,” he said, adding a tonne of raw cotton sold for US$2,200 per tonne, while seed fetched $250. “They have said our cotton has good, acceptable quality,” he said, and the plant expects to export another 200 tonnes of raw cotton and 400 tonnes of seed to these countries throughout the year.

PP gold dealers sell at record prices

Growing international demand for gold sees Cambodian shops shift from imports to exports

Photo by: Heng Chivoan
Gold jewellery is displayed sale on Sunday at a shop near the Central Market in Phnom Penh.
CAMBODIA’S gold prices have surged 11 percent over the past two months, according to Phnom Penh dealers, as the precious metal fetched record highs in New York trading on Friday.

Gold briefly surged to a new high of US$1,263.70 a troy ounce on New York’s Comex exchange Friday, before closing at $1,258.30 for August delivery. The precious metal is often seen as safe haven by investors, analysts say.

Gold at Ly Hour Exchange, Cambodia’s largest dealer, sold at an all-time high of $1,510 per damlung, or 1.2 troy ounces on Sunday, rising 11 percent over April costs, owner Sieng Lim said.

“Gold prices have risen sharply over the last two months. It’s likely due to the demand of gold as a safe haven with the euro debt crisis,” she said.

Cambodia traditionally imported gold from Singapore or Hong Kong, but increasing international demand is leading the Kingdom to export the precious metal, according to Sieng Lim.

“Shops are collecting gold jewellery and are melting them down as gold bars, and exporting them to foreign markets,” she said.

Phnom Penh-based dealer Virin Ratanak Gold Jewelry said the metal has reached record domestic prices in recent months, and that the surge is benefitting Cambodians who denominated their savings in gold.

“The Khmer people traditionally like saving in gold, so when gold prices rise, people are getting good returns on their savings,” Virin Ratanak said.

Precious metals are one of the favourite methods for Cambodians to store value, according to a 2007 Asian Development Bank report on rural savings.

“Saving in gold or jewellery is common, as these assets serve the purpose of elevating the social status of the households in their communities. They are also easily convertible to cash in times of need,” the report said.

Virin Ratanak added that Cambodians have been avoiding gold purchases with the soaring prices, and are increasingly turning to precious stones to store value.

“When customers buy diamonds, they can use them for however long they like, and sell them back to us, losing only 10 percent,” she said.
Gold prices have constantly increased in recent months, she said.

“It’s difficult to foresee the future, whether it will go up or down. I think prices may remain at the record level, or go even higher in the future,” she said.

Cambodian Association of Mining and Exploration Companies (CAMEC) president Richard Stranger said analysts’ predictions often differ, but that the prevailing opinion is that prices will remain high for some time to come.

“It’s very good from the perspective of the companies exploring for gold in Cambodia because it makes everything that’s discovered far more economically viable,” he said.

Consumers in China and India are buying and holding gold, he said, helping to drive up prices for the precious metal, and adding incentive for gold explorers.

“The bottom line is that we’re looking at a situation where there is a lot of demand. Some of the less feasible [mining] operations are getting close to being possible,” he said.

(source from Phnompenh post,

Monday, June 21, 2010

Vietnam to boost investment in Kingdom's rubber industry

Vietnamese Rubber Enterprise Federation to increase outlay by $200 million

Photo by: Chun Sophal
The Vietnamese Rubber Enterprise Federation breaks ground Sunday on a new rubber plantation in Cambodia. The group announced it would increase investment by US$200 million through 2012.
THE Vietnamese Rubber Enterprise Federation (VREF) announced it would invest an additional US$200 million on planting rubber trees in Cambodia from 2009 to 2012, on top of a previous $600 million commitment, officials said Saturday.

The 14-member federation intends to plant a total of 100,000 hectares of rubber trees in Cambodia, its chief of governing council Le Quang Thung said at the ceremony for rubber plantings by Vietnamese firms Dong Nai and Dong Phou in Sambor district, Kratie province.

“We are happy to increase our capital for growing rubber in Cambodia, because we hope it will help the federation form strong infrastructure for long-term rubber plantations,” he said.

Le Quang Thung said the initial announcement for $600 million might be enough for operating the plantations, but it would not be enough to improve infrastructure in the area.

“We will use the additional amount to build roads, bridges, healthcare centres, schools and houses, so workers can access the areas companies are developing,” he said Saturday.

The VREF announced the initial $600 million investment to grow rubber when it was granted 100,000 hectares of land concessions in Kampong Thomg, Kratie, Stung Treng, Ratanakiri, and Mondulkiri provinces in 2009.

Cambodian Rubber General Directorate director general Ly Phalla said the increased investment, now totalling $800 million, was a positive sign for the VREF, as it would help create a strong basis to carry out its future plans, but that cooperation is still to be worked out.

“We are not yet aware of the degree of cooperation required to help the Vietnamese Rubber Enterprise Federation succeed in its plans to grow rubber in Cambodia, as we have not worked together yet.”

The VREF first revealed plans to grow up to 100,000 hectares of rubber in Cambodia by 2012 following an agreement last year between leaders of the two countries.

It said the group’s 14 companies planted rubber on 10,000 hectares as a first step in 2009, adding 20,000 hectares in 2010, 30,000 hectares in 2011, and 40,000 hectares in 2012.

Last year’s VREF planting took place on 10,500 hectares in Kratie, Kampong Thom, and Ratanakiri provinces.
Le Quang Thung added the Federation might expand future plantations in Cambodia pending future discussions.

“We will invest more on growing rubber in Cambodia if the country is able to give more economic land concession,” he said.

Minister of Land Management, Urban Planning and Construction Im Chhun Lim said the Cambodian government weighed forest loss against economic needs when granting concessions.

Firms investing in the domestic agro-industry created job opportunities, reducing poverty and boosting sources of income for the national economy, he said.

“We welcome the investment from Vietnam because it can help improve Cambodia to be as capable as other countries in the region.”
Low-quality rubber traded for $2,900 per tonne over the weekend, and high-quality rubber sold for approximately $3,800 a tonne.

The Vietnamese Rubber Enterprise Federation plans to be growing rubber on 200,000 hectares in Myanmar by the end of 2010, Le Quang Thung said.

In 2006, the federation also invested capital to grow rubber on a total of 100,000 hectares in Laos.

High temperatures over the year to date may restrict the Vietnamese federation’s planned yield, VREF’s Cambodia president Leng Rithy said.

He added that he expects a 10 percent smaller yield due to changing weather in 2010, and that the federation might be able to grow only 18,000 hectares of rubber this year.

Le Quang Thung did not mention the potential impact of hot weather when speaking Saturday.

Despite growing prices for rubber on international markets, several producers have said that poor weather and rising oil prices are slowing plans to plant the lucrative crop.

Modern Masterpieces

The Wall Street Journal
Independence Monument
Independence Monument
Vann Molyvann, Cambodia’s greatest living architect, recalls that the night his Olympic Stadium in Phnom Penh was completed, in 1964, “I took my wife to see the work.” Sitting in the top tier of the stands, they listened to Dvorák’s “New World Symphony” over the stadium’s speaker system. “It was one of the great moments of my life.”
In the years after Cambodia won independence from France in 1953, Mr. Molyvann—then scarcely in his 30s—set out under the tutelage of King Norodom Sihanouk to transform Phnom Penh from a colonial backwater into a modern city. But in the late 1960s the country was drawn into decades of war and terror, including years under the murderous Khmer Rouge regime, and Mr. Molyvann’s vision was virtually forgotten. The architect himself had to flee the country.
And while he returned in triumph after more than 20 years abroad, it was to find that grand titles didn’t translate into influence in today’s Cambodia. His legacy—structures in a style dubbed New Khmer Architecture—lives on, contributing significantly to the flair of the city, but even that is in danger as Phnom Penh, like other Asian capitals, clears historic buildings to make room for skyscrapers.
Cambodia is best known for its magnificent temple ruins at Angkor, remnants of a great Southeast Asian empire that covered the country’s current territory as well as parts of Vietnam, Thailand and Laos. After Angkor fell to the Siamese in the 15th century, a new Cambodian capital was founded on the banks of the Tonlé Sap River. That city, Phnom Penh, remained an unstable settlement, caught up in the geopolitical ambitions of Cambodia’s more powerful neighbors, until the French arrived in the 1860s. The colonial administrators drained the neighboring swamps and created a grid street plan, dotted with sumptuous villas, Art Deco markets and impressive government structures.
Even then, Phnom Penh was modest, small-town colonial France—and when Mr. Molyvann received a scholarship from the colonial government and set off for the Sorbonne in Paris, it wasn’t with the dream of returning to remake it. He was a law student. But as he pursued his degree, and struggled with the compulsory Greek and Latin, he had an encounter that changed his life.
“I met Henri Marchal, the curator of Angkor for the École Française d’Extrême-Orient [the French School of Asian Studies],” Mr. Molvyann remembers, “and suddenly I knew I wanted to be an architect, so I changed to the École Nationale Supérieure des Beaux Arts, where I studied until 1950 under Le Corbusier.” He regards that modernist architect and designer as his greatest teacher.
After that, Mr. Molyvann stayed on in Paris for several more years, studying Khmer art. While he looks back fondly on the period, he is also keenly aware that some of Cambodia’s later traumas had their origins in the Paris of that time.

“The Khmer Rouge was born in the Latin quarter of Paris,” he says. As they debated their country’s postcolonial future, Mr. Molyvann says, the city’s 400 or so Cambodian students split between nationalists and Marxists. Khieu Samphan, whom he knew as a fellow Sorbonne student, would go on to become head of state in the Khmer Rouge government.
By 1956, Mr. Molyvann was back in Phnom Penh. Independence had broadened Cambodia’s horizons, in part thanks to the efforts of King Sihanouk, who at various times officially dropped his title to serve as prime minister, head of state or president, though Cambodians continued to refer to him as king. With tremendous energy and not a little royal eccentricity, the young monarch—also politician, artist, filmmaker, womanizer and host to a series of foreign heads of state and celebrities—worked to create a modern nation with an eye on the past. The leading members of an emerging urban elite, many of whom, like Mr. Molyvann, had returned from Paris, sought to create architecture, music, films, literature and art that married Cambodian tradition with modernist thinking.
Nowhere was this more apparent than in new administrative, public and private building projects that sprang up all over the capital—transforming Phnom Penh, within little more than a decade, into one of Asia’s most dynamic cities.
“It was difficult at the beginning, as Cambodians had never heard of architects,” Mr. Molyvann remembers. “All they knew were engineers and builders. There was a real dearth of qualified Khmer experts, as the French had used Vietnamese to administer my country. But within 10 years of independence the management of the country and its capital was Khmer. It was incredible.”
Mr. Molyvann was made chief architect for state buildings and director for urban planning and habitat in 1956 and given a number of ministerial posts in the following years. “I was designing the Independence Monument and was asked to present the king with a selection of marble,” he recalls. “I was too afraid to speak to him personally, but he made some suggestions and we got on perfectly after that.” Shaped like a lotus flower, the monument tower, completed in 1960, remains one of Phnom Penh’s landmarks.
Mr. Molyvann had part of the floodplain south of the Royal Palace drained and filled, and on this “Front de Bassac” constructed the country’s first high-rises, initially for visiting athletes for the 1966 Ganefo Games, a short-lived Asian alternative to the Olympics.
“We built the stadium for 60,000 people and surrounded it with a moat, so that the waters could run off in the rainy season,” he says.
Stefanie Irmer, whose KA Tours focuses on New Khmer Architecture, sees the relation between water and city as crucial to the architect’s vision for Phnom Penh. “Besides creating the ‘Front de Bassac’ area from wetlands,” she says, “almost every building Vann Molyvann designed was surrounded by water—to keep the termites out, but also to integrate the buildings into the flood plain.”
Many of Mr. Molyvann’s buildings are traditional in one sense—they are shaped like familiar objects. Chaktomuk Conference Hall, one of his earliest designs, is like an open palm leaf. The library of the Institute of Foreign Languages (now part of the Royal University of Phnom Penh) was inspired by a traditional Khmer straw hat. The lecture halls of the institute rest on sharply angled concrete pillars that give them the appearance of animals, about to jump. They are still in use today, as is the library.
By the early 1960s, for the first time in almost 800 years, Cambodia was blooming. The Angkor ruins were the region’s biggest tourist draw, and Phnom Penh had doubled in size and become a city others in the region admired.
But the politics were turning ugly. Norodom Sihanouk, serving as prime minister, began to suppress dissent. By the mid-1960s, the U.S. had combat troops in Vietnam; as American planes began bombing North Vietnamese positions in Cambodia, the country’s policy of neutrality became a farce. The former king’s repressive policies alienated the political left and some rural Cambodians, who began to join a shadowy communist movement, the Khmer Rouge. Meanwhile, the right and military had become fed up with his capriciousness and nepotism. When he left to visit China in 1970, a coup replaced him with army general Lon Nol. The Swinging ’60s, the meteoric rise of a young nation, the building boom in the “Pearl of Asia”—it was all over.
Mr. Molyvann remembers days with hard choices. “Shortly after Lon Nol came to power, the Israeli ambassador advised me to take my family out of the country,” he says; the ambassador, a friend of his, warned him about the crumbling security and the increasing persecution of those connected with the previous government. So when Mr. Molyvann left for a conference in Israel, with his wife, Trudy, and their six children, they didn’t return. Instead they moved on to Switzerland, his wife’s home country.
Five years later, the Khmer Rouge marched victoriously into Phnom Penh. The new rulers immediately emptied the cities, and for almost four years Phnom Penh was a ghost town. At least 1.5 million Cambodians, nearly a quarter of the population—Mr. Molyvann’s father among them—lost their lives in the killing fields. The fledgling intellectual elite was snuffed out.
“I had no contact during those years,” says Mr. Molyvann. “I had to give my children a new life, so we stayed in Lausanne.” He continued to work as an architect in Switzerland, Africa and Laos, for the United Nations and the World Bank. The Vietnamese pushed out the Khmer Rouge in 1979, but Mr. Molyvann “could not think of going back.” The new rulers “were still communists.”
“It was not until 1993 that I returned—with the U.N.,” he says. Initially, his homecoming was triumphant. He was appointed minister of state for culture and fine arts, territorial management and urban planning and contributed to the application for Angkor’s successful recognition as a Unesco World Heritage site.
But he soon realized that the Cambodia he had left behind in 1970 no longer existed. Cambodian People’s Party leader Hun Sen, who had been installed by the Vietnamese and who continued as prime minister after the U.N.-organized elections, gave Mr. Molyvann back his villa, but the architect’s plans for Siem Reap—the province in which Angkor is located—were unappreciated. He had called for a “tourist village” set apart from both the temples and the old town of Siem Reap, integrated into the environment and with water conservation as a key goal.
“The government wanted to use the resources of Angkor to develop Siem Reap without the participation of the local people,” Mr. Molyvann says. “In 1998, I became president executive director of Apsara (Authority for the Protection and Safeguard of Angkor), the government body created to look after the temples. Three years later, I was fired.” Unchecked development in Siem Reap has led to a dramatic drop in groundwater levels, causing subsidence that has put the Bayon, one of the main temples in the Angkor area, in danger of collapse, according to experts from the Japanese Conservation Team for Safeguarding Angkor. Development has also driven up property prices and the cost of living, a hardship for the locals in a province that remains one of the poorest in the country.
But it was not just the government and developers standing against Mr. Molyvann and his vision. Bill Greaves, director of the Vann Molyvann Project, a nongovernmental organization engaged in recreating the lost plans of the remaining New Khmer Architecture sites, thinks postwar Cambodia is simply not aware of its past.
“Right now, Singapore and Shanghai are models for forward-looking cities, both for the government and the people,” he says. “Hence Phnom Penh’s different stages of history are likely to be discarded.”
In the past decade, as investment has begun to pour into the Cambodian capital once more, colonial and 1960s buildings have been replaced by chrome-and-glass edifices, floodwater lakes have been drained, local media have reported almost daily evictions and ministers have gushed over the need to build skyscrapers in order to keep up with the neighbors.
The government frequently declares that preservation has to go hand in hand with development. In practice, it seems to walk well behind. Beng Khemro, deputy director general at the ministry for land management, urban planning and construction, says his department’s hands are tied. “Many historical properties are in terrible condition,” he says. “The people who own them don’t understand the value of the past and would rather demolish them and build high-rises to make a profit. The past is not appreciated. Without a change in attitude amongst the population, we are fighting a losing battle.”
Cambodia has preservation laws, and Dr. Khemro says he is trying to pass a regulation to get them applied in particular instances. He’d like to try a pilot preservation project away from Phnom Penh, he says, noting that Cambodia’s second-largest city, Battambang, has many buildings from the French period.
“Also,” he adds, “there’s less pressure.”
Molyvann advocate Mr. Greaves is skeptical about the survival of the architect’s legacy. “The old buildings disappear at an alarming rate—even public edifices like the National Theatre, which was knocked down a couple of years ago, are not safe. We try and get there before the demolition crews arrive.”
A drive around town with Mr. Molyvann illustrates his curious position in this free-for-all scramble for change. At the Independence Monument, guards at first refuse him entry. Only after his driver reveals the distinguished visitor’s identity is the master architect, old and frail, allowed to climb the steps he designed half a century ago.
Passing the stadium, Mr. Molyvann looks at the haphazard development around his favorite creation. Appropriated by developers with government connections, the moat has been partly filled in to make space for shops and an underground car park; the result is annual flooding that threatens the entire sports complex.
With equal shades of sadness and anger in his voice, Mr. Molyvann says, “Today, it’s not the state who owns the old properties, but the ruling party, the CPP.”
—Tom Vater is a writer based in Bangkok.

Vision for Eco Resort Island continues in Cambodia Development

Cambodia’s most dynamic and diversified business conglomerate The Royal Group has unveiled its vision to create Asia’s ‘first environmentally planned resort island’ pioneering high-end international tourism on the country’s idyllic coastline. With interests ranging from telecommunications and IT to banking, international schools, media and entertainment, hotels and resorts, property and infrastructure development, The Royal Group has been at the heart of Cambodia’s economic development for almost two decades. Now the corporation led by visionary tycoon Neak Oknha Kith Meng, is setting its sights on transforming the country’s tourism industry, which until now has almost exclusively depended on the attraction of world famous Angkor Wat. The vision is to develop the pristine island of Koh Rong, 30 minutes by boat from the coastal city of Sihanoukville, into an ecologically sustainable resort paradise rivaling and beating established, iconic Asian tourism destinations like Phuket, Koh Samui and Bali.
The Cambodian government has granted The Royal Group a 99-year lease on the 78 sq km (30 sq mile) island to advance the plan. Now international investors and partners are being sought to contribute to the development of the island including luxury resorts and residential infrastructure, such as transportation – the development of the island’s international airport, and leisure projects such as golf courses and a marina.
Kith Meng
Kith Meng
Until now, Cambodia’s archipelago of untouched tropical islands with white sand beaches, crystal clear blue waters and virgin rainforests has remained largely unknown to international tourism and real estate development. But this is about to change as The Royal Group develops an eco master plan for Koh Rong, in consultation with a team of top international architects and engineers. “Cambodia’s tourism has so far focused almost exclusively on the world famous temples of Angkor Wat,” said Kith Meng, Chairman & CEO of The Royal Group, “but the potential of this beautiful coastline is the missing link in the development of our tourism sector.”
Since The Royal Group is starting almost from scratch, a unique opportunity presents itself to learn from the experiences – and mistakes – of earlier developed ‘paradise destinations’ in Southeast Asia.
“It is our shared vision that the island be planned and developed in a way that results in the establishment of sustainable and commercially viable development models – whilst preserving and enhancing the natural environment,” said Kith Meng.
Development of Koh Rong is the latest in a long series of high profile business ventures for The Royal Group. The company has achieved its success by focusing on bringing quality investment to the country, while at the same time providing investors with the platform to run successful and profitable operations.
In 2005, the ANZ Royal Bank was established through a partnership with one of Australias big 4 banks, the Australia New Zealand Banking Group Limited (ANZ Bank), bringing world-quality banking services to Cambodia for the first time.
In telecommunications, The Royal Group controls Cambodia’s biggest mobile-phone operator. Its company MobiTel has been a leading provider in Cambodia since 1997 and has enjoyed a market share exceeding 67% for over 8 years. MobiTel has the largest coverage of all mobile phone companies in Cambodia and now extends to over 85% of Cambodia’s cities, towns and villages.
TeleSURF, Cambodia’s first broadband internet provider, likewise covers all major cities, with sister telecom outfit NETi Solutions providing I.T. software and business consulting services. Within the IT industry, EZECOM – Cambodia’s leading Internet Service Provider (ISP), is also part of The Royal Group’s portfolio of companies. EZECOM is the first ISP in Cambodia to actively monitor customer satisfaction and provides a range of internet and data communication solutions catering to individual and corporate clients.
The Royal Group is also involved in the upgrade of Cambodia’s railway system, in partnership with Australia’s largest diversified logistics provider Toll Holdings. Modernisation of two main lines – one linking the capital, Phnom Penh, to Poi Pet near the Thai border, and the second linking Phnom Penh with Sihanoukville Port on the south coast – is on schedule for completion next year, and set to boost trade and attract tourism.
Hotels and resorts in the company’s portfolio include the Royal Park Resort in Siem Reap, Cambodia’s first 6-star resort and the 239 key Hotel Cambodiana, Cambodia’s first 5-star waterfront hotel.
Other business interests extend to the property sector, media & entertainment, finance and trading partnerships. Such extensive and diverse business interests with reach into so many areas of Cambodian society and its economy, have established The Royal Group as Cambodia’s premier strategic gateway for serious international companies seeking to invest in this fast developing country.
As Cambodia becomes more integrated into the global economy, Australian educated Kith Meng has emerged as a key player for promoting the country to potential foreign investors as a profitable and desirable place to do business.
Now tourism is poised to play an ever increasing role in Cambodia’s economy.
With Angkor Wat, a UNESCO World Heritage site alone drawing tourists at an annual growth rate of 30%, and tourism poised to replace agriculture as the backbone of the national economy, The Royal Group intends to capitalise on its global business connections to attract investment in the infrastructure of its latest and most ambitious tourism related venture extending tourism to the idyllic, untouched southern coast.
“We are targeting forward looking investors within the region and globally who share The Royal Group’s vision on sustainable development,” said Mr. David Simister, Chairman of CBRE Indochina, the exclusive advisor and sole agent for developing the island.
Approximately an hour’s flight from the international transport hub of Bangkok and Singapore and two hours from Hong Kong, Koh Rong is easily accessible for tourists from all over the world. “This is one of the last undiscovered paradises in Southeast Asia with the potential to become the next most visited island,” said Mr. Simister. “As such, it represents a chance to invest in a future Phuket before the air connections and the initial wave of tourism drive land demand and prices.”
Koh Rong is the largest of 22 islands in an archipelago off the 600 kilometer coastline known as the ‘Indochina Riviera’.
In addition to the international airport which is part of Koh Rong’s master plan and will provide direct access to the island, a new airport at nearby Sihanoukville is currently open for chartered flights and private jets, is also expecting domestic and regional flights in the near future. “The airport, once fully operational, will be the principal gateway to Cambodia’s southern coast and a critical catalyst for the area’s development.”
“Koh Rong is a rare opportunity to capture Cambodia’s untapped tourism potential and offers unique investment potential in one of the first truly free-market economies in the Mekong Region of Asia,” said Mr Simister.

WING launches bill payments

WING, an ANZ Bank-owned mobile-payments service available on Hello, qb, Smart and MFone networks, said customers in Phnom Penh and Kandal provinces can now pay Electricite du Cambodge bills using their mobile phones, according to a WING press release. Costs are the same as sending standard WING transactions, it said. It “allows customers to pay electricity bills using mobile handsets, whenever they like, where ever they are”, WING Head of Operations Michael Joyce said in the release. The firm said it has 150,000 customers across Cambodia’s 24 provinces.

(source from phnompenh post newspaper,Friday, 18 June 2010 15:00 Jeremy Mullins)

Bourse seminar

A seminar aimed at helping Cambodian companies raise capital on US stock markets was held in Phnom Penh by Nevada-based PHI Group with participation by NASDAQ and the Cambodia Chamber of Commerce. Discussions centred on listing requirements, how to go public and keys to success as a publicly listed company in America. “We are excited to collaborate with NASDAQ and PHI Group to provide this unique opportunity for our members to learn about the US stock markets and ways they can raise capital to expand their business,” Cambodia Chamber of Commerce president Kith Meng said, according to a PHI Group release.

tech 'tipping point'

GERMANY-based software manufacturer SAP says Cambodia’s business environment now warrants further expansion for its information technology products, the company's Business Development Manager Robin Fong said Wednesday. Speaking at the sidelines of a information technology presentation at Raffles Le Royal Hotel in Phnom Penh, he said that "Cambodia is at a tipping point" for development.

(source from phnompenh post newspaper,Thursday, 17 June 2010 15:00 Jeremy Mullins)

PP Water awards tender

Phnom Penh Water Supply Authority (PPWSA) has selected Singapore-based company Moya Dayen to construct the first of two water-pumping stations at Niroth Water Supply Station on the Mekong River, a PPWSA official said Tuesday. Ek Sonn Chan, PPWSA director general, said the US$13.4 million project is scheduled to start next month and will take approximately two and a half years to complete. Ek Sonn Chan said the station will be able to produce about 130,000 cubic metres per day. A tender for the second water treatment project is also almost complete, he added.

Asia-Pacific air growth heads for the skies

BERLIN – The airline industry should be profitable this year for the first time since 2007, led by strong growth in the Asia-Pacific region, the International Air Transport Association said on Monday. “We are upgrading our global industry forecast to a full year profit of US$2.5 billion (€2.1 billion),” IATA director general Giovanni Bisignani told the annual general assembly in Berlin. In March, IATA estimated its members would post a loss of about $2.8 billion this year, following a shortfall of 9.4 billion dollars in 2009. Bisignani said that while the industry would be profitable, "with a (profit) margin of 0.5 percent it will be a modest party." In 2007, before the global financial crisis broke, airlines posted combined profits of $12.9 billion. The recovery will be uneven, the IATA head warned, but “Europe with its weak economy will be the only region in the red, with a 2.8 billion (dollar) loss.” Last year, European airlines lost 4.3 billion dollars.

Housing for the poor

Talmage Payne, chairman of the board for First Finance PLC, talks about partnering with the charity Habitat for Humanity

Talmage Payne, chairman of the board for First Finance PLC, says partnerships like the one First Finance has just announced with Habitat for Humanity are the key to giving low-income Cambodians an opportunity to own a house.

First Finance was licenced to operate as a micro-finance institution (MFI) by the National Bank of Cambodia in April 2009. What makes it unique among the many financing institutions in the country?
Our social mission is to get a person their first home and we’re trying to do that as low in the market as we can go while still staying commercially viable. We’ve distributed over US$1 million in loans to almost 100 clients. More than 70 percent have never had a home or anything before and about 30 percent are people who have a small piece of land.

Has it been difficult to find viable low-income borrowers?
It’s not hard to sell the value of the product. Everyone wants to have a house. [Low-income workers] are just not anticipating that they would ever have the resources and means to do it. So it’s helping them understand how mortgage finance works. We have some of the longest-term mortgages in the country. We need to explain that this is a 15-year loan and what that means. So it’s not, “Hey you should be a homeowner,” it’s helping them understand how they could be a home- owner.

You have just signed a memorandum of understanding with the NGO Habitat for Humanity to take on mortgages for around 1,000 homes of low-income Cambodians. How will this partnership work?
Everyone knows Habitat is good at developing homes. Its target is people who have an income of below one dollar a day. It goes through a three-year process of selecting qualified families in slum areas or the urban poor.

Habitat mobilises those families to begin some savings, then they will identify a piece of land and work with those families and volunteers to build a house at a very low cost. They put sweat equity and some savings into it, but there is still a mortgage that goes on for the remainder of the cost.

We will finance and manage those mortgages for them so they can then take the money raised into another project. We will essentially purchase their existing portfolio.

We can handle the credit and mortgage aspect very well, and they can handle the social aspect of identifying people and building a house.

Will the financing of these loans be altered when they change hands?
I am not sure exactly how this will work. I can tell you that the interest rates we charge will be between 15 percent and 18 percent. We will not make their loans any harsher than they were with Habitat.

Could you reach this segment of the population without partnering with someone like Habitat?
No, without a partner like Habitat I don’t think we would successfully reach them. We would love to have more partners like this in the non-profit space. If we can work lower in the pyramid, I think there is a lot more business down there.

With somebody whose household income is $200 to $400 a month, those are the kind of people who will walk into a bank and say “I heard my friend got a loan and I want to get a loan”. But once you get down to an [income of] a couple dollars a day it requires some sort of partnership. One challenge with that is there are just not enough products in the market. Developers are all building 20-, 40-, 60-, 80-thousand-dollar homes. We found a couple of developers doing things under $10,000. So we have begun some partnerships with them to try to put some special promotions on those types of properties to encourage development.

Does financing loans to such a low-income population present a greater risk to your institution?
The risk is not the clients. Poor and middle-income people here are good credit risks – they pay. Look at the balance sheet of any MFI. The difference with our loan is they are paying over 12 years or 15 years and not six months. They’re still paying $40 a month or $80 or $20, it’s just a longer-term loan.

The risk to us right now is all of our lending is based on equity. Being a new company in a new space is scary for lenders. Everyone is afraid of the mortgage market. Lenders or equity investors are looking to give loans for two to five years, so the risk for us is how we structure our balance sheet. You can’t have a lot of loans that are due to lenders when your money is coming back over a longer period of time.

So who are the investors in First Finance?
We have three great shareholders: Insitor Fund, who provides seed funding to help launch businesses like ours; First Home, which was begun by myself and some other Khmer and long-term expatriates with a lot of experience in microfinance; and Phillips Capital, a Singapore-based financial services company like a Merrill Lynch. They have set up a sort of philanthropic investment fund to invest in these sorts of things.

Do they stand to profit from your investments?
We are seeking a 10 percent internal rate of return over a five- to seven-year period.

Do you have any reservations about returning a profit to shareholders on these sorts of investments?
Every social enterprise has this debate and needs to have the debate. I don’t have any concern with people making a return on investment. But if you want to carry the social enterprise name, name your social goals and work hard on it.

For us it’s looking at the household income that we lend to and driving our portfolio as low as we can go in those different spaces.

I think any good ethical business here benefits the economy. Not everything needs to be a social investment to be positive. We can make more money just loaning to bigger houses and not partnering with Habitat, but can also partner with Habitat and make a return.
(source from Phnompenh post newspaper,

Turning data into a precious asset

Volak Sao, CEO of IT firm Campura, talks about his partnership with global tech giant EMC.

Photo by: Vinh Dao/ Melon Rouge
CEO Volak Sao of Campura is keen to tap market potential for technology in Cambodia. Campura has teamed up with American giant EMC to distribute data storage systems to the Kingdom’s businesses.

What is Campura? How long has it been operating, and how long have you been at the helm?
Campura is the brand name for the system integration business arm of Kamprama Corporation. Basically, “systems integration” is an industry that resells many different technology products, such as hardware and software, and the services needed for a particular customer such as a hotel, bank or telecom to make their operations run smoothly.

Kamprama also owns a number of other businesses outside the technology industry such as a few branches of kindergarten school. I’ve been at the helm since the beginning of Campura in May 2007.

What are Campura’s primary areas for business? Are there many other companies in the same field?
Our primary business focuses on system integration for hotels, banks, telecom operators and others. Our customer target is large entities and SMEs. We also do some distribution of technology and also set up telecom infrastructure.

We have 40 full-time staff, and our revenue was $US5 million for 2009. I can say we’re one of the biggest leading system integration companies in Cambodia. There are many companies in this type of business such as Deam and Interflex.

Campura is a distribution partner for US-based IT giant EMC. How did that come about?
EMC is a manufacturer of data-storage systems, and we’re their partner connecting the manufacturer to the users. EMC doesn’t normally sell directly to end users.

We teamed up with them for an obvious reason – to tap this market’s potential. We approached them, and we’re now the only official EMC partner in Cambodia. It chose us because we have a proven track record of consistent service delivery.

In terms of storage, EMC offers data storage systems, protection and archiving, backup system, disaster recovery system, content management, information security and cloud infrastructure. Our profit margin comes from reselling EMC products, I cannot disclose our customers since I signed a non-disclosure agreement. But I can say major mobile operators and banks use EMC.

Why is the partnership with EMC such a big deal for Campura?
Every large enterprise needs to store their data securely and to be able to easily access it. Data is a very precious asset.

A better question would be: How can large businesses, such as big banks and telecom firms, afford not to have proper storage for their invaluable data? What happens if they lose all their data one day?

How much room for growth is there in the hardware and software market in Cambodia?
I think Cambodia is an emerging market, so new opportunities are coming every day. Room for growth seems to double or triple every year.

We expect we will see a fast growth trend until such a time when the market becomes fully matured.

Then growth will become slower and smaller in terms of percentage increases. So yes, more competitors are expected to come to this field.

What about multinationals entering the market?
I think the business playing field in Cambodia is not too attractive at the moment for multinational companies to set up full commercial operations here. Most of them choose to set up representative offices and use local partners to be the service arm to end users.

Of course, many technology companies like IBM, HP, Cisco will still have to work through partners, even if they have full commercial office to sell their products as their business model does this everywhere in the world.

Are there factors outside the company’s control that could hold the business back or impact Campura?
I think government intervention in terms of regulation, policies, promotion of the private sector and the creation of a fair playing field for all players has a great deal of impact on every business in Cambodia.

But it’s not necessarily holding the sector back. It’s a double-edged sword: It can either hold it back or accelerate its growth.

What “government interventions” do you mean or are you speaking generally?
I’m speaking in general. But the government needs to be more investor-friendly in their involvement with the private sector.

Currently my opinion is that government appears to promote private sector in theory, but in reality, there’s nothing much substance about their action.

The government also needs to create a commercial court of law and enforce their rule on the existing laws.
(source from phnompenh post newspaper)

Cambodia: Real estate boost predicted

Analysts say property law sub-decree would boost foreign investment potential

Photo by: Sovan Philong
Construction work on apartments on Sisowath Quay, Phnom Penh, continues Wednesday.

Developers have welcomed a government move towards allowing foreign property ownership in private units to be up to 80 percent of a building, with stakeholders applauding it as a sign that Cambodia is opening up to more investment.

The government is considering a sub-decree on the foreign property ownership law to clarify the percentage of a building that can be privately owned by a foreigner, the Land Ministry said Wednesday. Previously the law had no limit, and it was not clear what the allowances were.

Reactions among key players in the property market and investment experts, interviewed by the Post on Thursday, were largely positive. Many predicted that the sub-decree would boost Cambodia’s market potential; however, some are uncertain of the time frame for change.

Douglas Clayton, chief executive officer of fund manager Leopard Capital, which has a US$1.5 million investment in residential housing in Siem
Reap, said the sub-decree would be a positive indication the government was opening to foreign direct investment.

“This will obviously be very favourable news if they pass this sub-decree,” he said.

Although he did not expect immediate results, at least not in cities such as Phnom Penh and Siem Reap, he pointed to Cambodia’s coastline as an area of potential growth.

“I’m not sure it would immediately stimulate the foreign property market – at the moment there’s not as much interest because of the global financial crisis,” he said.

“I think what we’ll see is the demand for property along the coast will increase. Foreigners tend to want to have a place more for the holidays, so I think that’s where you’ll see more developers targeting.”

Matthew Rendall, partner at law firm Sciaroni & Associates, said there is definitely a market for foreign ownership – “we get enquiries about that all the time” – but that just how big the market is, or could become, isn’t clear.

He said that demand from developers would probably increase as their sales scope went from being concentrated in Cambodia to global in nature.

“The higher the government makes the level of foreign ownership, the better it is for the property market generally because it increases the customer base,” he said.

Daniel Parkes, country manager for Cambodia at global property firm CB Richard Ellis, agreed. He said an 80 percent limit would help expand the market, opening it up to new foreign investment, which he deemed “very important” to the sector.

However, he said that only “time would tell” how it would affect the property market in terms of levels of both construction and development.
“This doesn’t give all the answers, but it is a good step along the way,” he added.

Commentators, however, said that some points remained to be clarified in the sub-decree to prevent a “dual economy” within a single apartment block.

“The idea 100 percent cannot be sold to foreigners will be a factor developers take into consideration when they design these apartments. If x amount can be sold to Cambodian’s only and the rest to foreigners, it would potentially create two different pricing structures,” Rendall said.

He said details of whether the 80 percent refers to the number of units or floor space could also have similar design ramifications.

But he played down fears that a broader customer base could inflate housing prices to the detriment of local Cambodians, saying there will always be a market for different levels of income.

Among property developers, the reaction was overwhelmingly positive.

Un Mouy, sales and marketing manager for Tow Town Co, a Taiwanese developer behind Bali Resort housing development project, said it has already seen a jump in demand from foreigners following the foreign property law’s introduction earlier this year and expects the sub-decree to drive demand.

“It is good news for us to build more apartments and condominiums to sell,” she said.

She said the company is preparing documents to ask permission for the Ministry of Land Management to build another apartment to meet client demand.

Kheng Ser, assistant to South Korean developer World City’s vice president, said the move would attract more investors as property opportunities opened up.

“I think it’s a good idea to allow up to 80 percent of units to be owned by foreigners,” he said. He added that his company had also sold the vast majority of condos at its $2 billion development in Camko City.

Foreigners “will come more and more to invest and live in our country because they can own property here,” he added.

According to the Ministry of Land Management, the sub-decree is awaiting approval from the Council of Ministers and is set to be passed within

Sunday, June 20, 2010

Nation preps to drop tariffs

CAMBODIA has 180 days to reduce trade tariffs to fall in line with the Association of Southeast Asian Nations’ Trade in Goods Agreement (ATIGA) that came into force on Monday, according to a statement released by the ASEAN Secretariat.

The “landmark economic agreement” is being implemented in a bid to bring transparency and simplification for trade within the 10 members of the regional bloc, the statement read.

It stipulates that the Kingdom has to reduce trade levies to 5 percent or less on 80 percent of goods that have separate import codes within 180 days.

Tariffs on all but a handful of imports must be eliminated by 2015, according to documentation provided by the Cambodian branch of the transport company TNT Express Worldwide.

An official at the Ministry of Economy and Finance, who spoke on condition of anonymity, said Tuesday that the Kingdom is preparing to meet the deadline.

The government has targeted eliminating tariffs on 60 percent of some 8,300 products this year, he said, while maintaining tariffs of 5 percent on the remainder.

We don’t have a problem with the time frame,” he said.

But according to the source, who is working on the file with the ministry’s Economic Integration and ASEAN department, the reduction on trade taxes may result in higher domestic levies.

“I think ATIGA does not impact our national tax revenue because [it] focuses only on import tariffs. We reduce import tariffs, [and] we increase excise tax – which is [covered] under our domestic tax.

“If other members move [the] system like us, ATIGA will be nonsense because it just reduces import tariffs but increases excise without market-access improvement,” he said.

ASEAN officials say they believe that the deal is a step forward.

“ATIGA is a major achievement towards the establishment of a single market and production base under the ASEAN economic community,” said ASEAN Secretary General Surin Pitsuawn in a statement.

Nevertheless, members of Cambodia’s economic community said uncertainty still surrounds implementation of regional free trade.

Cambodia Economic Association President Chan Sophal said the eventual impact of the agreement was uncertain because it opened up the Kingdom to foreign competition.

Sam Rainsy Party spokesman Yim Sovann added that with trade liberalisation, Cambodia will need to improve the quality of domestic production to curb a potential influx of imports.

“We can do this if the government is willing to reduce bureaucracy, corruption, eliminate export barriers and especially improve infrastructure to allow fair competition,” he said.

Barriers have already been reduced to 5 percent or less for 1,224 products including construction materials, cosmetics, food supplements, tobacco and gaming equipment, vehicles, motorbikes and computer technology, TNT Express Worldwide (Cambodia) Ltd country general manager Sjaak de Klein wrote in an email Tuesday.

Tariffs on some of those products had been reduced from 35 percent, he said.

“It will allow for increased intra-ASEAN trade flows, which will [ultimately] benefit the consumers,” he added.

Garment Manufacturers Association of Cambodia President Ken Loo also welcomed the agreement.

For the garment sector, he said, the removal of intra-ASEAN trade barriers meant that fabric from neighbouring countries could be brought to Cambodia more easily in order to help the final production process.

Cambodia’s intra-ASEAN trade stood below the group’s average in 2008, the last year for which information was provided from ASEAN’s Trade Statistic Database.

Statistics showed 21 percent of Cambodia’s US$8.73 billion worth of trade in 2008 was conducted among ASEAN nations, below the 26.8 percent average for member nations.
(source from phnompenh post newspaper, Wednesday, 19 May 2010 15:01 May Kunmakera and Jeremy Mullin)

Education from commerce

Analysts say a skills shortage has slowed further development in the Kingdom.
Photo by: Sovan Philong
A village teacher conducts a class last week in Neak Leung in Prey Veng province. Experts say that better educational opportunities, particularly those focusing on vocational skills, could help Cambodia overcome a skills shortage and foster greater economic development.

CAMBODIA is experiencing a skills and talent shortage hindering further development, experts say, agreeing with international assessments that education could be better tailored to meet employers’ needs.

Calling it a “global crisis in education”, World Economic Forum (WEF) on East Asia participants said in a release that education was not meeting employers' demands in countries around the world.

“Nation-building is about developing our human resources. The people are the most important. But in human resource development, we are falling behind,” forum participant and Lippo Group of Indonesia chief executive officer James Riady said, according to a release.

USAID Cambodia Micro, Small, and Medium Enterprise chief of party Curtis Hundley said extending domestic value-added manufacturing will require increasing training for technical vocations.

“Garments are the main export industry in Cambodia. All production for garments could be in Cambodia – buttons, zippers, fabric could all be manufactured here, but right now the industry is all CMT: cuts, make and trim.”

The domestic business environment can be very difficult, and it is often hard to attract investment, he said. A supply of Cambodian technical experts and effective middle and upper management would help draw more manufacturing, not just in the garment industry, he added.

Cambodia faces a number of challenges in order to solve a domestic shortage of skills and talent, HR Inc Cambodia general manager Sandra D’Amico wrote in an email.

“Our biggest challenge is the lack of labour market information systems and links between industry and education institutions to ensure education meets the needs of industry.”

Coordination between different educators could also be improved, she said. “Technical vocational training (TVET) and Higher education need to compliment each other, not compete with each other.”

Standardisation of accreditation, and better marketing of educational possibilities would also help address the shortages, she said. “At the end of the day, people need a job.”

D’Amico recommended focusing on technical training to develop skills in the economy, and improving information dissemination as to opportunities to help bridge the education gap.

“There are too many university graduates that are doing jobs suitable for technical vocational training graduates.”

Despite warning that a crisis in education is under way, World Economic Forum panelists said that East Asia nations have reason for optimism.

“You have talented and motivated people who excel. But what do we do to unlock that potential?” Viet Thai International Joint Stock Company chief executive officer David Thai said, according to a WEF release. The WEF on East Asia was held June 6 and 7 in Ho Chi Minh City.

Cambodian Skills Development Centre (CASDEC) Director Tep Mona said one domestic attraction to foreign investors is the inexpensive labour available domestically.

She said 80 percent of middle and upper management at the Kingdom’s garment factories are foreign expatriates, and that foreigners have greatly assisted in developing the sector with their knowledge, but that it is time to develop domestic employees capable of doing the job.

“Low labour costs, if combined with the right skills, could make the industry very competitive,” she said, and added that such a combination could entice other industries to enter the domestic market.

“If we have skilled people who can do the job, factories will stay longer.”

The present education system produces plenty of graduates of higher education, but could better address the needs of industry, she said.

To develop middle management capable of working in the garment sector or other industries, CASDEC has begun offering a certificate program for management.

The domestic skills and talent shortage creates challenges for businesses operating in the Kingdom, Sandra D’Amico said.

The deficiency results in "a big need for employers to do on-the-job training as well as invest in training and building their own workforces”.
(source from phnompenh post newspaper,Wednesday, 09 June 2010 15:01 Jeremy Mullins)

ACLEDA set to launch Unity mobile banking

Service to target Kingdom’s unbanked, but competitors say it requires pricey handsets that will the limit number of users.
Photo by: Sovan Philong
ACLEDA’s new Unity mobile banking system is set to go head to head next month with the only current provider, ANZ’s Wing.

ACLEDA Bank aims to launch the Unity mobile-banking service by early next month, Senior Vice President Sok Sophea said, though rivals say it requires expensive data phones beyond the reach of many in the Kingdom.

Although it cost ACLEDA over US $1 million to establish, she said, the service will initially target existing account holders, but will eventually be marketed to Cambodia’s unbanked.

“Unity will be a highway for ACLEDA so that we can invite unbanked customers to join as well.”

However, use of ACLEDA’S Unity service will be restricted by the quality of hand phone its customers possess, according to its website.

All mobiles will have access to Unity’s SMS-based banking services, including balance inquiry, mini-statements and mobile top-ups, but the phone must be capable of operating a web browser or hosting Unity’s phone application to be able to transfer funds between separate ACLEDA accounts, or to complete bill payments.

A spokesman for WING, an ANZ-owned company and Cambodia’s present leader in mobile fund transfers, said Unity’s requirement for higher-end data phones may prove too costly for many of the Kingdom’s consumers.

“In our experience, this puts it out of reach of many Cambodians. It also means the user has to pay for data charges associated with internet banking as well as the fees that ACLEDA charge,” WING Head of Operations Michael Joyce wrote in an email.

A WING transfer is similar to sending an SMS message, and therefore requires only a simple phone. However, it also requires agreements between mobile providers and WING to operate, restricting the service to Hello, QB, Smart, and Mfone users at present, though “we are always looking to operate with more,” he said.

Unity is not restricted to specific providers, and will be cheaper for Hello, Mfone, Smart and Metfone users due to agreements with those operators, Sok Sophea said.

Its service has already undergone trials with ACLEDA employees, and she said Unity will be offered to Cambodia’s general population following a launch early next month.

“We want customers to be able to access account information when they need it, with no limits by location. Bank branches are open only 8 hours a day, five days a week, and ATMs also have limits by location.”

The bank expects to cut operational costs and reduce queues at its branches by offering mobile banking, she added. “We can also gain some revenue by charging for fund transfer and balance inquiry and other transactions as well.”

Registering for the service will require a onetime fee of $5, 20,000 riels or 200 baht, currencies that will be supported by Unity, according to its website. There are also associated fees for each transaction performed.
(source from Phnompenh post newspaper,Tuesday, 08 June 2010 15:00 Jeremy Mullins)

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