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Friday, July 16, 2010

CP Cambodia aims for growth

Charoen Pokphand Cambodia plans to expand both feed and animal production. They anticipate greater economic growth in the country, due mainly to increased tourism and a burgeoning real estate boom.

By Apisit Buranakanonda, Bangkok, Thailand

Sakol Cheewakoset, senior vice president in charge of overseeing the agribusiness giant's Cambodia and Laos operations, said that despite the numerous obstacles facing investments in feed and animal production in Cambodia, now is the time to have a strong presence there.

Success in the Cambodian feed business requires technical support and follow-up, he added, because the cost of product failure is too high for the country's struggling producers to bear. Furthermore, re-establishing trust and credibility in such a case would be virtually impossible. In its decade of operations in the country, CP Cambodia has helped to modernise the local livestock industry. It has also established a positive image and reputation, differentiating CP Cambodia's feed from imports. The company's production accounts for 60% of the feed sold in Cambodia. Feed is distributed through more than 40 distributors in major animal production areas, namely Kandal, Kampong Spue, Kampong Cham, Siem Reap and Battambang.

Infrastructure improved
Although labour is cheaper, overall, Cambodia has up to 15% higher production costs due to more costly transportation and import taxes. Electricity alone is 20-30% more expensive than in Thailand. In recent years, infrastructure has been improving. Cultivation areas for corn and cassava are growing as well, which will one day lead to enough production for domestic use and limited exports. Local producers face fierce competition in the form of imports from Thailand and Vietnam.

Vietnamese products have been enjoying cost advantages over their Thai competitors because the Thai baht has risen faster against the US dollar than the Vietnamese dong. Also, Vietnamese feed is packed in 25 kg bags, making it seem cheaper at first glance than the standard 30 kg bags coming from Thailand. On the production front, the feed industry sees competition from the cassava processing industry in Cambodia and traders from Korea, Thailand and China, all of whom are vying for corn and cassava. This has driven prices up by more than 50% compared to early 2007, resulting in a big windfall for Cambodian farmers. It is estimated that some 60% of raw materials produced are destined for Thailand. Tight supplies of raw materials have driven feed prices up by more than 20% compared with 2007.

Additionally, bird flu in 2004 swept away many small hatcheries supplying broiler and day-old layer chicks. Furthermore, more stringent animal trade controls along the Cambodia border have deterred animal trade, enabling better control of this serious disease.

Today, the poultry breeding operation of CP Cambodia is doing well and will be expanded further to accommodate heavy demand. The company plans to raise its annual output of broiler chicks to 3 million birds per year, up from 2.2 million in 2007. In Cambodia, the company supplies only pullets.

Quality control in feed production

Raw materials such as corn, soybean, cassava, and fish meal are available locally. December is the busiest time for procuring raw materials and checking the quality of feedstuffs. Coarse grains are tested for adulterants, contaminants, appearance, physical quality, moisture content and more. Some 30% of raw materials are subject to primary testing before acceptance. Once accepted, the quality control team takes 100% samples of all intake materials. For protein sources, it is using dried freshwater fish from Tonle Sap lake, fishmeal from Kampong Som, and oil from the fish processing industry. It uses a urea phenol red solution to screen if soybean meal has been overcooked. Raw materials and cooked products are physically separated.

Producers can choose concentrate, mash or pellet feed. Pellets are slightly more expensive than mash, but the market is shifting more towards pelleted feed due to better growth performance. CP Cambodia's sales strategy is based on the premise that providing top breeds, proven technology and management, as well as good feed performance, will improve the competitive position of the producers who buy its products. With modern technology, genetics and top quality feed, a producer can reduce finishing time for their pigs by two weeks or more, Cheewakoset said.

Quality assurance and feed quality is on par with CP's feed in Thailand. Formulas are prepared on site under the direction of the parent company in Thailand. Its phase feeding programme consists of pre-starter, starter, grower and finisher feed. Retained samples are kept for one month to aid trace back. CP Feed is marketed under the Hi-Gro, CP, and Hog brands.
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U.S. urges Thailand to end emergency rule

(Reuters) - A senior U.S. official urged Thailand on Friday to end a three-month state of emergency that allows the government to arrest and hold people without charge, censor the media and restrict public gatherings.

U.S. Under Secretary of State Bill Burns made the comment during a news conference with Thai Foreign Minister Kasit Piromya at the start of an official visit to Thailand, Cambodia, Indonesia and the Philippines.

"Clearly, the United States hopes that the state of emergency, that the decree, can be lifted as soon as possible," Burns told reporters during a brief press conference.

Attempts to forcibly disperse thousands of ant-government protesters in April and May sparked a crisis that killed 90 people and wounded nearly 2,000. Dozens of buildings were set ablaze. Leaders of the movement were arrested and accused of terrorism, which carries a maximum penalty of death.

"We believe our friends in Thailand best serve their own interest through a peaceful resolution of political differences," he said with Kasit by his side.

The comment was made more than a week after the government extended the state of emergency for another three months in about a quarter of the country, saying anti-government elements continued to pose a security threat.

The law gives broad powers to the security forces, including the right to detain suspects for up to 30 days without charge and shut media deemed to incite "public panic" and violence.

Prime Minister Abhisit Vejjajiva, who met with Burns later on Friday, said the government was making process in its national reconciliation process. "If everything goes well and in an orderly fashion next year, we could hold an election then," Abhisit told reporters after the meeting.

Abhisit's term expires in December, 2011 and elections will have to be held within 45 days after that.
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HCM City Expo 2010 opens in Cambodia

Cambodian Deputy Prime Minister Men Sam On and Vice Chairwoman of Ho Chi Minh City People’s Committee, Nguyen Thi Hong, attended Vietnam-Cambodia Trade, Service and Tourism Fair 2010 (Ho Chi Minh City Expo 2010), which opened in Phnom Penh on July 15.
More than 300 booths set up by 100 leading Vietnamese businesses are showcasing high-quality Vietnamese products including agricultural produce, processed foods, interior decorations, leather goods and footwear, chemical products and cosmetics, electronic devices, and construction materials.

The opening day of the exhibition attracted thousands of Cambodian visitors, who came to shop – or just look.

This year’s four-day fair is said to be much larger and better organized than the nine previous ones.

Ho Chi Minh City Expo aims to increase two-way trade and promote cooperation between businesses in tourism and healthcare services.
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