Ethanol plant planned

Photo by: TRACEY SHELTON
A farmer stands in his cassava field in Preah Vihear province

The Phnom Penh Post
Friday, 24 July 2009
May Kunmakara

China's largest oil and gas company CNPC is looking to invest $58m in a plant that would process cassava, says govt source

AN official at the Ministry of Agriculture, Forestry and Fisheries said China National Petroleum Corp (CNPC) is looking to invest US$58 million in an ethanol plant that would use cassava as its raw material to generate fuel.

CNPC is China's largest oil and gas producer.

The official, who would not allow his name to be used, said the ministry has not decided on the proposal since the factory would require 40 million to 50 million tonnes of cassava annually - about 15 times current domestic production.

"It would be a great benefit for our farmers who are struggling to find markets for their cassava yields," the official said, adding that the CNPC project would be funded by a Chinese government loan.

The project would require a huge amount of land, he said, and because concessions are contentious, the ministry needs to discuss the proposal with other ministries and government officials.

"So far we haven't identified a concession area because it would be so big, and also [CNPC] hasn't yet received the money from its government," he said. "So we are not sure about the project - they have simply come to ask for permission."

Cambodian law states that a land concession cannot be larger than 10,000 hectares.

Khem Chenda, the ministry's administrative director, said that, in the past, cassava was exported to Vietnam and Thailand. However, since the global economic crisis hit, most buyers have stopped purchasing. As a result, prices have halved from $100 per tonne last year.

"Cassava farmers are only able to sell to neighbouring countries at a very low price, so I would be happy if we could find a new market that would generate a more suitable price," Khem Chanda said.

Cambodia has 180,000 hectares of land producing 3.7 million tonnes of cassava, he said, with both figures up two-thirds since 2007.

Extrapolating those figures means the country would need to turn over a further 2.25 million hectares to cassava production. That represents an unrealistic 12.5 percent of Cambodia's entire land area, so buying cassava from outside Cambodia would be the only feasible option for the factory at its proposed size.

Lann Chhorn, deputy governor of Kampong Cham province, many of whose farmers grow cassava, said prices are so low that villagers are selling cassava in the markets and to buyers in Vietnam for just 200 riels [$0.05] per kilogram.

"I will be really pleased if we can get more markets for our local farmers and better prices as that will encourage them in this business."