Khmer’s 50,000-tonne export goal

Last Updated on 23 January 2013 
Phnom Penh Post

By Hor Kimsay

Khmer Food director Kim Savuth speaks to the Post, Tuesday, Jan. 22, 2013, at the company’s rice warehouse in Phnom Penh’s Meanchey district. Photograph: Heng Chivoan/Phnom Penh Post

It's about noon and, after finishing a meeting with his business partners, 52-year-old Kim Savuth takes time to walk around his milled-rice factory, next to his office, and talk about his export company.

Milled rice is stockpiled to the roof, and he walks the floor observing his workers, who are busy packing bags and loading them on trucks, many destined for foreign ports.

The factory is the heart of Savuth’s Khmer Food Co, one of the main suppliers of milled rice and rice products for export and domestic markets.

“With the good network we have with many rice mills, and good relations with our business partners and shipping lines, we’re able to supply good-quality rice at a competitive price,” Savuth, who is also the company’s director, says.

According to figures from the Commerce Ministry, Cambodia exported 187,119 tonnes of milled rice last year. About 16 per cent, or 30,000 tonnes, of that total came from Savuth’s factory.

This represented a 20 per cent increase from 2011, when Khmer Food exported 25,000 tonnes, Savuth says.

This year, the company plans to export 50,000 tonnes of milled rice, targeting further gains in production.

Currently, 120 people work in the factory and another 40 in the office. Forty per cent of the office staff have university degrees, Savuth says.

Khmer Food procures rice from more than 100 mills across Cambodia to supply its domestic markets, and a selection of 20 qualified mills meet its export demands in European countries such as France, Hungary, Germany, Spain, Italy and Poland.

A company exporting 50,000 tonnes was just a pipe dream a few years ago, before Prime Minister Hun Sen set a goal for the country to export a million tonnes a year.

“After the Kingdom announced its ambitious goal to export at least one million tonnes of milled rice a year by 2015, there was much improvement regarding the process of rice exporting in this country,” Savuth says, noting specifically the increase in the number of rice-processing plants.

Improvements and economies of scale will lead to lower costs overall, he says.

In 2009, it cost about $50 to export a tonne of rice. Today, technological improvements have cut that figure to about $23 a tonne.

After graduating from university in 1998 with a degree in health science, Savuth was a practising doctor for a year.

As a business-minded person, he found working as a doctor very stressful because of the sadness he felt for his patients. Though still demanding, running his own business is more appropriate for him.

Growing up after the Khmer Rouge period, during which his parents were killed, Savuth found the going very tough. He struggled to make a living and supported himself while studying by selling bread and working as a bicycle taxi driver.

“At every step, there will always be challenges, because the bigger your business is, the bigger the challenges you face,” Savuth says.

“But no matter what kind of obstacle it is, there’s always a solution.”