Tuesday, 17 July 2012
Stuart Alan Becker
Phnom Penh Post
When
London-based real estate investor Sanjay Dhir heard about Cambodia from
his Indian partner Manoj Varma, he took a trip here in October 2010 and
stopped by the roadside to meet the operators of a portable rice mill.
He
knew then that Cambodia was ready for new rice mills. After working
with his partners for the last year and a half, Long Grain Co Ltd
announced the deal last week for a $20 million investment in a new rice
mill in the Oddong district, about 40 kilometres from Phnom Penh.
“When
you have been through many crises in various countries, trends and
fashion changes, you learn one thing: people have got to eat,” Dhir
said. “On the remaining two and a half hour journey after talking to the
owners of the portable rice mill I was trying to understand more about
the country, the rice, how many mills and very quickly realised there
was a huge opportunity for many, many more rice mills,” he said.
According
to the same principles that he and his partner Manoj Varma use when
investing in real estate developments in India through a company called
Fusion Real Estate Investments of Mauritius, the key is finding good
local partners to work with.
In this case, they found Sean Ngu, CEO of EMAXX Telecom,
who is one of several shareholders in Long Grain Fusion, the Singapore
company that owns the Cambodian company Long Grain Co Ltd. Dhir serves
as the Chairman of Long Grain Fusion: the majority shareholder is his
own family.
In the $20 million phase one of the project, Japanese
rice milling equipment under the brand name Satake will arrive in
October, following completion of the building at the end of September
for a projected start of operations on January 25 next year, on Dhir’s
40th birthday.
“There’s been an awful lot to do, identifying the
site, filling the site, raising it by two metres, and working with a
good builder for excavation and foundations,” Dhir said.
With regard to the January opening of the plant, Dhir says the paddy can be acquired and stored prior to milling.
“Because
we have not done any debt finance, we’re not under pressure from any
investors as to when and how to operate. The very reason we’ve taken no
investment on board is that we can operate without pressure and we can
build to the highest quality, highest standards, and look after our
staff, look after our farmers.”
Dhir says the objective is to put Cambodian rice on the world stage as high quality and very desirable.
“I
don’t believe people who say Cambodian rice is not high quality. If you
use the right machinery, take the right care, and put in the right
investment, there is no reason why you cannot have an international
standard product coming out of Cambodia.”
Neither is he concerned about competitive rice mills: he welcomes them.
“Lots
of people ask me if we’re concerned about more mills. I consider more
mills an asset, not a threat, because they can contribute to putting
high quality Cambodian rice on the world stage as a high quality product
which will make it easier for all of us to trade.”
Dhir says it is important to work with the community and treat farmers and associates as part of the family.
“It
is very important to me that everybody in that value chain is well
taken care of and looked after because if it is not the whole value
chain collapses and there’s no rice to sell. The people are the most
valuable aspect of the business.”
Dhir intends to provide
education and health programs for farmers, rice mill workers and their
children. “The country has welcomed us, and with that goes
responsibility,” he said.
Born into an Indian family in Leeds,
England, Dhir said he was told he would never amount to anything at the
age of 13. He keeps a home in the Knightsbridge district of London and
travels to India and Cambodia.
His Fusion Real Estate
Investments Company and other ventures have combined investments of more
than $400 million, with business models including the acquisition of
land and joint venture developments with carefully chosen local
partners.
“We’ve come quietly, and we’re now saying what we are
doing. Now that the foundations have been built, we’re now announcing
our arrival. We didn’t want to be another investment tourist, he said.
“We joint venture with local developers. The key is to work with good
local partners. We believe that having the right local partners is the
key.”
To contact the reporter on this story: Stuart Alan Becker at stuart.becker@gmail.com
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