Inside Business: Looking to coffee to brew success

Photo by: SOUEN SAY
A vendor displays Angkor coffee beans at Phnom Penh’s night market.

Written by Soeun Say
Wednesday, 01 July 2009

Phnom Phnom investor backs domestic coffee beans in bid to build home-grown business

LY Thirith learned from his father his coffee-roasting skills when aged just 18. Twenty years on, Ly Thirith is the general manager for the Angkor Coffee Processing and Packaging factory, a business he started three years ago with a capital investment of US$60,000.

He told the Post that he started his Phnom Penh-based processing factory after realising that coffee had excellent potential in the Cambodian market.

"I wanted a Khmer product operating in the Cambodian market," he said. "So I decided to use everthing that I had learned about coffee from my father."

ACPP can produce up to 2 tonnes of roasted coffee per month, and sells the finished product for $5 to $10 a kilogram. That means gross sales of up to $20,000 a month - provided the orders are there.

"We don't make coffee and store it," he explained. "We just roast it when our clients place an order."

Ly Thirith said that ACPP gets through 15-20 tonnes of coffee beans a year. He brings most of it to the capital from Mondulkiri, Ratanakkiri, Stung Treng, Kampong Cham and Pailin.

His clients - a selection of local supermarkets, restaurants, hotels, clubs and shops - are spread across the Kingdom, although his key sales areas remain Phnom Penh and Siem Reap.

Ly Thirith said ACPP currently lacks the technical skills to make high-quality standard coffee for export, which is why it struggles to compete with imported coffees from Vietnam, Thailand and China.

"It is difficult to make standard coffee because we lack the skills in key areas such as quality control, packaging and marketing," he said. "[The imported] products are good quality and well-priced - and that means we have room to improve."

Ly Thirith said staff are undergoing training to improve the quality of coffee produced. He will also ramp up production volumes and sharpen product packaging, as well as offering his clients a wider variety of blends.

And as with any business, the competition's pricing remains a problem.

"Many coffee shops are selling more imported coffees, and [my competitors] also sell in the local markets at a low price - this is my major concern," he said.

Ly Thirith is not just focusing on the local market. Last year he went to a trade show in Japan - one of the few Khmer companies exhibiting products there. He said ACPP's products generated some interest, although in the end the volumes requested by the two Japanese businesses were too low to be commercially viable.

"I was so happy to hear that the Japanese wanted to order my coffee, but their orders were just too small," he said, explaining why he rejected them.

But with his plans for the future, Ly Thirith hopes to begin international sales in the coming year.

In the meantime, he would like the government to lower some of his input costs - electricity and petrol - and also called for a lower tax rate.