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Monday, January 08, 2007

Cambodian daily hails economic development in Vietnamese province

10:59 08/01/2007

The Light of Cambodia, one of the largest dailies in Cambodia, has recently carried an article, highlighting Viet Nam’s southern province of An Giang for “Tra” and “Basa” farming.

The paper hailed the socio-economic development in An Giang with two key products; fish and rice; saying the export of Tra and Basa catfish contributed most to the province’s export turnover of about 400 million USD in 2006.

The paper elaborated that the province was farming fish in about 3,200 cages, exporting 190,000 tonnes of fish a year in addition to 2.9 tonnes of food in paddy equivalent. Also in 2006, An Giang’s GDP growth rate reached 9 percent.

The province has a population of 2.2 million living in 11 districts, including four districts bordering Cambodia, and has two international border-gates with Cambodia. Read more!

DJ: Plantation Companies Rush Abroad To Secure Land

8/01/2007 By: By Matthew Walls

Despite swelling coffers thanks to soaring commodity prices, Asian plantation companies can't find enough of the one asset they need most - land. Shortage of land at home is fundamentally changing the way these companies plan future expansion, in the process benefiting countries which still have arable land in plenty.

Advertisement"The Chinese, the Vietnamese, the Thais, the Malaysians are all interested in planting (rubber) in other countries, because land is not available in their own countries," says Hidde Smit, secretary general of the International Rubber Study Group.

China's Hainan State Farms, for example, has established a rubber nursery in Myanmar as a first step and plans to develop 300,000 hectares of rubber plantations in Laos and Myanmar in less than ten years, with a total rubber output estimated around 500,000 tons. In November, the state-owned Vietnam Rubber Group said it would lease 50,000 hectares of land in Cambodia to grow rubber, starting 2007. That area could be doubled in four years. This follows upon another investment in Cambodia in April by Hainan State Farms, which leased 62,659 hectares of land, at a cost of CNY1 billion ($12 7 million), to grow rubber.

In the Philippines, two provincial governments from China plan to develop 200,000 hectares of land for rice and corn cultivation and another 40,000 hectares for a bio-fuel crop such as cassava or sugar cane. And in Indonesia, Malaysia's Sime Darby, now in the process of merging with two other state-owned palm oil giants, is working to double its land bank to 200,000 hectares by 2008. "The biggest reason Malaysian companies come to Indonesia is land," said Witjaksana Darmosarokoro, director of the Indonesian Palm Oil Research Institute.

What began as a trickle is now a steady flow, expected to continue for years given the rising demand for these commodities. While observers say it is difficult to foresee the scope and speed of this outward investment, none doubt the growth of foreign-owned plantations will boost output in general while shifting a significant proportion of production to lower-cost countries.

Strong Demand, High Prices Spark The Scramble The rush to get trees into the ground as quick as possible began a few years ago but is accelerating now as commodity prices are at levels unseen in years or even decades in some cases. With oil prices hovering above $60 a barrel, palm oil's potential as a biofuel, for example, has greatly expanded the scope for its use. Natural rubber supply, meanwhile, is expected to see a deficit in the next 6-10 years.

Demand for other commodities, such as sugar cane and corn which are linked to biofuels, has also risen with the run-up in oil prices. Palm oil prices are currently around MYR2,000 a metric ton, the highest level since 1998 when prices averaged MYR2,377. Natural rubber futures, meanwhile, rallied to a 26-year high in July during a supply crunch. While some of those gains have been surrendered since then, a widely expected supply deficit for the next 6-10 years will keep its prospects buoyant, analysts say.

To capitalize on these favorable trends, plantation companies need to find and develop land quickly, but this is becoming increasingly difficult at home. Land suitable to grow rubber and oil palm, for example, is either saturated, as in China, coveted by real estate developers, or fragmented into small holdings, as in Malaysia, making consolidation into economic holdings difficult. That has forced investors to look at countries so far considered risky investment destinations. "The big problem is that the belt in which rubber grows is politically unstable," said industry veteran George Sulkowsky, managing director of Centrotrade, a rubber dealer with offices in Europe, the US and Southeast Asia.

Decades of isolation brought about by wars in Cambodia and Africa, autarchy in Myanmar and political upheavals in Indonesia and the Philippines have until recently kept most investors away from the plantation sector in these countries. But that has also left these countries with "a lot of land ripe for outside investors," said Steven Schipani, a consultant to the Asian Development Bank.

New Investments To Ease Supply Shortages The explosion of new investments by Asian plantation companies in neighbouring countries could help ease future shortages of palm oil and rubber, and by doing so, keep prices at levels that don't force consumers such as tire makers and energy users to seek substitutes. According to IRSG's Smit, the new investments in rubber plantations might increase output by 1 million tons in the next 10 years, from around 9 million tons expected to be produced this year.

Similarly, palm oil's use as a biofuel has begun putting a strain on edible oil supplies, and Indonesia's vast potential to expand production offers some relief, said Dorab E. Mistry, director of Godrej International Ltd., part of India's Godrej Group. While oilseeds have to compete for land with other crops in most parts of the world, "the one area where production does not face such competition is Indonesia," said Mistry. But the prospect is not without risks.

Overproduction is the greatest danger presented by this new expansion, analysts said. Consider as well that these investments may be converting rainforest into monoculture plantations, or transforming farmers into laborers. There is also the issue of immigrant labor. Following Chinese and Vietnamese investment to Laos, Cambodia and perhaps Myanmar will likely be immigrant farmers. NGOs in Laos say northern Laos is already under significant Chinese influence and that process will intensify once newly planted rubber trees are ready to be tapped in about six years from now. "

The government of Laos, lacking any sort of tools to analyze the rubber phenomena, has not even thought about this issue, said David Bluhm, an agro-forestry consultant, who co-authored a study on Laos' rubber industry for the German non-governmental organization GTZ. "(At) some point I think the government will have to ask itself some tough questions about rubber and social demographics." (Allan Sun in Beijing, Reuben Carder in Jakarta and Benjamin Low in Kuala Lumpur contributed to this article.)

This article was reproduced with the kind permission of Dow Jones Newswires, as part of its Asia-Pacific Market Outlook 2007. Copyright 2007 Dow Jones & Company, Inc. All rights reserved. Copying and redistribution prohibited without permission of the publisher. Asia-Pacific Market Outlook 2007 is designed to provide factual information with respect to the subject matter covered, but its accuracy cannot be guaranteed.

Dow Jones & Co. is not a registered investment adviser, and under no circumstances shall any of the information provided herein be construed as a buy or sell recommendation, or investment advice of any kind. The series contains forward-looking articles on new Asian bond issues, Chinese initial public offerings, mergers and acquisitions in Japan, foreign exchange forecasts, commodity investor flows and Asian oil refiners amongst other issues, written by Dow Jones Newswires reporters within the region.

The articles provide market forecasts and insights to give you an edge in your business. We hope you enjoy them and wish you a prosperous 2007. To find out more about Dow Jones News, go to Read more!

Tourism Helps Revive Cambodia from the Ravages of War

January 8,2007 11:08 AM
By Kamarul Ariffin Mohd Yassin PHNOM PENH (CAMBODIA)
Jan 8 (Bernama) -- The first sight of Angkor Wat, a magnificent Hindu temple made of stone blocks and intricate stone carvings, leaves visitors awestruck. More astounding is the fact that the ancient temple has withstood the test of time since the 9th century.
A 14-member delegation from Malaysia led by Deputy Tourism Minister Datuk Donald Lim Siang Chai visited the temple during the Visit Malaysia Year 2007 (VMY07) campaign in Cambodia recently. Located in the Siem Reap district, about 308km to the north of the capital city of Phnom Penh, Angkor Wat was once the flourishing Hindu empire of the Khmer people under King Jayavarman II. The temple structure based on Khmer and Hindu architecture took 30 years to complete and was once the Khmer people's cradle of civilisation.
But the glorious distant past of the Indochina nation is overshadowed by a more recent dark past. The atrocities during the Khmer Rouge regime from 1975 to 1979 under Pol Pot saw the annihilation of up to 1.7 million people or 21 percent of the nation's population then.
TOURISM IMPORTANT The civil war ended in the late 1980's and there was national reconciliation following the United Nations' sponsored election in 1993.Realising the potential of its tourism assets, the new government immediately adopted an open sky policy to lure foreign airlines and tourists. According to the statistics from the Tourism of Cambodia agency, more than 1.4 million Koreans, Japanese and American tourists visited the country in 2005.Angkor Wat remains the jewel of the nation's tourism industry. Several more historical temples like Bayon and Banteay-Srei, and the scenic beaches of Sihanoukville and the French colonial architecture in Phnom Penh complement the travellers' itinerary.
DARK PAST NOW MONEY-SPINNER The nation's dark past is now being capitalised as a tourism product. The famous 'Killing Fields' of Choeung Ek, located about 15km from Phnom Penh, serves as a grim reminder of the country's violent past. Cheoung Ek is one of the thousands of killing fields in Cambodia and a memorial made from 8,000 skulls of the victims of the genocide greet tourists. As for those keen on shopping, they can expect something different as Phnom Penh still lacks modern shopping centres like the ones found elsewhere in Asia. But the Toul Tom Poung or the Russian Market fulfills any visitor's needs. Other than souvenirs and Cambodian silk, the market is renowned for rubies, sapphire and emeralds. But there is a setback. The transactions are conducted in American dollars and not the local riel and this often annoys shoppers.
LAND OF OPPORTUNITIES The rising number of tourists and the political stability over the years has opened up business opportunities for the locals and outsiders including from Malaysia. Francis Anthony, 61, the WonderWorld Travel & Tours operator here told Bernama: "Though the development here is slow compared to elsewhere in Asia, there are clear signs of more commercial activities and better living standards for its people." Anthony who hails from Ipoh, Perak, has been residing here for the past 15 years and is married to a local, Tith Chanthary, 40. Today he considers Cambodia his second home."Initially, I started by providing transportation services but it drove me crazy when people started calling for the services way past midnight."Then I opened a tourism agency with my wife and we are now promoting Cambodia as a holiday destination to Malaysians and also the other way round," he said.
He thinks the foreign investment in the tourism sector has largely helped Cambodians to escape poverty. The tourism sector not only offered employment opportunities but also the market for locally-made souvenirs and precious stones.
VISIT MALAYSIA YEAR 2007 Looking at the new-found wealth of the Cambodians, Malaysia's Tourism Ministry targeted more than 15,000 Cambodian tourists during Visit Malaysia Year 2007. In 2005, 10,000 Cambodians visited Malaysia. The numbers are expected to increase based on the fact that during the first eight months of 2006, a total of 9,703 Cambodians visited Malaysia. MAS currently operates 10 weekly flights from Kuala Lumpur to Phnom Penh while AirAsia has seven including to Seam Reap .
The executive manager of Mekong Discovery, Kelvin Tan, 40, said the target could be achieved as more and more Cambodians were touring foreign lands."The Cambodians now have the buying power due to the political stability and economic growth and we should capitalise on this," said Tan who has been residing in Cambodia for about nine years now.
Tan, who hails from Kuala Lumpur, will be promoting Malaysian tour packages in Cambodia during Visit Malaysia 2007."We will also take the opportunity to woo the Korean, Japanese and European tourists who converge in the Siem Reap district to see Angkor Wat to come and visit Malaysia," he said. Tan feels Siem Reap can be utilised as a transit point for visitors to Malaysia as there is direct air service between Siem Reap and Kuala Lumpur operated by AirAsia.--
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