First Inauguration after the Formation of RGC
I have a great pleasure today to be present with all of our people and monks as well as our dear Korean guests in putting into official use the factory that will produce ethanol, bio-energy at the investment of MH Bio Energy Company from the Republic of Korea. This indeed makes me happy because it is the first inauguration to do in one and a half month after the formation and running of the new Royal Government. I wish to take this opportune moment to give my heartfelt appreciation to the Ministry of Industry, Mines and Energy for its efforts to provide necessary facilitation for the project to actually take place. HE Suy Sem, Minister for Industry, Mines and Energy has mentioned on the investment project in his speech and on how to go about getting a factory of this kind to take shape. It is not a big one for Korea, but it is the first of its kind in the Kingdom of Cambodia, and is indeed a big one for us. The factory we inaugurated today symbolizes not only the success of the two countries’ cooperation but truly of the Royal Government of Cambodia. The factory has indeed started in the third legislature of the National Assembly Royal Government, and has finalized and operationalized with our inauguration in the early part of the fourth legislature National Assembly Royal Government. The Board Director of MH Bio Energy – Ethanol came to see me on July 15, 2008, perhaps in his unbending confidence that the CPP would be reelected, and Hun Sen would once again become the Prime Minister to invite me to preside over the inauguration of the company. The people of Cambodia as well as our foreign friends have had confidence in the election victory on July 25, 2008 for the CPP.
Initial Output – 36,000 Tons of Ethanol
According to the report of HE Minister Suy Sem, as well as that of BH Bio Energy, the initial output would be 36,000 tons of ethanol. The average consumption or requirement of tapioca chip is about 10,000 tons per annum. The factory has the capacity to produce between 300,000 and half a million tons of ethanol when it comes to its full swing operation. While inaugurating the factory, we should indeed say we are open a new market for our farmers who cultivate tapioca. Judging from the capacity of the factory, only between 200 and 500 jobs have been created but when it comes to marketing tapioca, we have provided a window of opportunity for farmers. We hope the factory will increase its pace to full swing production so that more of our farmers will be able to benefit from the tapioca demand. Tapioca in Cambodia is no longer serving small purpose of processing food for consumption but becoming raw material for bio fuel energy production.
More Will Grow Tapioca
If I am not mistaken, the figure this year shows that our farmer grow tapioca on 170,000 hectares of land while last year was 100,000 hectares only. With this market demand I am sure more, like in Memot, Damber, Snuol, Tbong Khmum and some others like in Battambang, will grow tapioca which will give them better source of income. I would also urge HE Chea Sophara – Minister for Rural Development to help check the news that people in Damber district have sliced their tapioca but I do not know if they sell their tapioca chips to Men Sarun’s company or for who. I also do not have the information if their chips are not up to the standard or else. This is a major issue if we could not absorb most or all of the chips people produced the factory would one day in the future be threatened. Actions must be taken to see if people in Tbong Khmum could sell their chips or not, if they have hard time to sell, they would not grow tapioca anymore and this is the threat.
Tapioca Processing Facilities
We have a factory that processes tapioca in Kompong Cham province, in the village of Khna, Sanlaob commune, Tbong Khmum district, which produces between 15,000 and 20,000 tons of tapioca chips. We also have one other factory in the village of Taingyu, O Da commune, Kamrieng district, which could do between 15,000 and 20,000 tons of tapioca chips too. Initially the two major factories could supply their products to the factory here – BH Bio Energy – for ethanol production.
Please allow me to share our people’s and everyone’s joy. I am so worried about contract farming in which people are contracted to grow and sell their produce to the contractor whereas in the case they could not turn to the contractor to sell their produce, and other traders refuse or offer them unreasonable prices, our farmers will find themselves between losses on either end.
Other Benefits Related
As is said by HE Suy Sem, Minister for Industry, Mines and Energy, this has shown 6 different correlations between industry and agriculture. Firstly, the provision of addition value on raw materials, where in this case the tapioca chip, which before we exported them unprocessed. Now tapioca in our country has the chance of serving not only the demand for fuel but also fertilizer. Secondly, this will create jobs and income for both farmers and workers, thus contributes in the poverty reduction program in Cambodia. Thirdly, technical and skill training will be conducted and provided for staff and workers according to their tasks while fulfilling their jobs – on the job training. Fourthly, transfer of new technology that is not available before for which I am so grateful to our Korean friends. Fifthly, this will serve our target of expanding and promoting exports with a contribution to address trade imbalance as this is going to be a new product. It will have a share in our export which is more than 4 billion US dollars per year. Sixthly, this will create other services relating to or supporting for bio energy.
For a Lower Price Fuel
We all know that the world is in midst of crisis relating to oil and food, and oil has become a check and balance in the fact of price rise in food. Higher oil price makes higher food price. In the Philippines, because they have been so worried about energy security, they transferred land from food crops to energy crop. Because of the food security they once again transfer land from energy crop to food crop cultivation.
The US is another example. This has indeed led to the fact that food which is grown in smaller size of land has gone high in price. Today I would like to appeal to all fuel companies, local and foreign ones, to make more efforts in bringing the prices down. I learned from the weekly report of the meeting HE Deputy Prime Minister Keat Chhon informing me that two local companies have reduced their fuel prices – Sokimex and Tela while Total, Caltex, etc. have yet to bring their prices lower. I urge the local companies to reduce the price further because the price of oil in the international market has gone down to about 54 US$ per barrel from about 140 US$ last July. The local price at the time jumped to 5,700 Riels per liter. It has come down to a comparable level yet when the price of oil has gone down drastically.
I could not order you to lower the price as it is against the market norm or the rules of the World Trade Organization. The State is not in a position to determine the price but it is so funny to see that some people who declared themselves the free world economists and who accused us of being the communists have pressingly suggested the Royal Government to set the price.
As far as the price of fuel is concerned, the Royal Government has given a good understanding of your concern in clearing stock from the fuel crisis period, but it should be way over now. I request two companies – Sokimex and Tela to work out some price cut and should not be concerned of what the foreign based companies would do. I guarantee similar quality. I have here the Sokimex and Tela’s offers – they bring down the price of fuel – gas and diesel – 200 Riels per liter.
Every Crisis Comes Opportunity
When we face with the food situation, our farmers which make 80% of the population were so happy, but the 20% are not happy with the Government. However, we noticed that our people have a good understanding about this bitter fact. Take for instance the electoral campaign took place at the time when fuel price has gone sky high but some politicians complain to farmers of the rise of rice price without noticing that it is indeed our people’s wish to have their produce sell at high price. They lose the election no doubt. Every crisis has implicit opportunity.
There is this world crisis of food, but Cambodia is farming country with potential to produce food on a larger land, some could be spared for the production of ethanol raw materials. This has indeed to illustrate the fact that we have to promote food production and increase our potential for processing aimed at serving local demand in replacement of those imported from outside. Cambodia has a share of 30% from its agriculture in the country’s GDP – though it has gone down in figure from 48% to 30% does not mean we have less share from agriculture but we have more rice for export.
Four RGC’s Objectives
I have pointed out once again before HM the King during the 55th anniversary of the country’s independence that we have to 1) maintain peace, political stability as without the two we cannot sustain development, and investors would leave; 2) maintain en economic growth at the approximate rate of 7%, but we hope that we might obtain a better result; 3) move the poverty rate one point lower per annum; and 4) provide better and effective public services for our people and for investors.
World Financial Crisis
It is indeed hard to understand now who is going to advise who. The World Bank and IMF came about advising us small countries of what to do but as it has shown, the US, then Europe and some countries have experienced the impacts. In Cambodia, because we do not have stock exchange yet I think we do not feel the impact in this sector. Now G20 countries are meeting to work out their bails and measures. I would accept that what happens has had some mild impacts on Cambodia, especially exports. However, based on this crisis, we have looked to the food production and ethanol production for energy as well.
National Independence & Water Festivities
I would like to take this opportune moment to thank HE the Mayor of Phnom Penh city, the Governor of Kandal who have made efforts together with the armed forces and the people of Phnom Penh in making our festivities on the Independence Day, and the Water Festival to proceed in a safe and joyous manner with roughly 4 millions people taking part. I have sought the agreement from HM the King that we have to try and make the Water Festival one of the best events because unlike other events, this is the only one that brings our people from countryside to the city.
Remarks on Rumors and Political Developments
It has been rumored that there will be a change of Phnom Penh Mayor. I got a call from the Minister of Information from Kompong Cham. Who is going to pull the Mayor off his seat if the Prime Minister does not do so? In the wake of the General Commissioner Hok Lundy’s death, Gen. Net Savoeun, who is my nephew in law has taken over the job… I got criticized for naming him the General Commissioner. What cam I do if he is second in command and he has been doing this police job for his whole life. Some politicians have said I have tricked them to come to the meeting. I could not remember when I talked to him/her if they seek for the post of head of commission/s in the parliament, I would tell them it will be their dream …■