Photo by: HENG CHIVOAN
Mong Reththy.
Written by Kay Kimsong
Friday, 05 June 2009
How has the economic crisis hit the agricultural sector?
I have seen an impact, but the agricultural sector will be able to move forward
- no problem. It won't achieve what we were expecting, but it won't collapse. As you have seen, even though it is down, there is still demand for agricultural products, like palm oil, cassava and corn. Many farmers have reduced their land under cultivation, for example planting 800 hectares of rubber trees instead of 1,000, but because demand for land and property has collapsed, rather than giving up their farms, many are using the opportunity of falling land prices to expand.
How have your other businesses, including a seaport and a construction company, been affected?
Fewer ships are docking at my seaport, and construction work is slowing down. Agriculture is also not that great, but all my businesses will survive.
You are a senator as well as a tycoon. What advice have you given to the government related to the economic crunch? \
I raise issues related to agriculture at every meeting and ask for support from the government to help diversify the sector as quickly as possible. The response from the government is acceptable.
Agriculture generates 32 percent of Cambodia's GDP and employs more than half of the country's labour force, but annual growth has lagged other sectors since the early 1990s at just under 4 percent. How can the sector reach its potential?
Agriculture is considered a leading sector by both the government under the leadership of Samdech Techo (Hun Sen) and by private enterprise. The planting and raising of agricultural products will never stop growing, but the agriculture sector needs to diversify into a true agro-industrial sector with related enterprises such as logistics and processing.
What needs to be done first?
The most important thing to do is to provide long-term financing at low interest rates; short-term loans at high rates are no help. I have heard that banks have money but are struggling to find good investors to lend to. To borrow for agriculture projects you need to have a clear plan because investing in agriculture is high risk, but many potential borrowers don't have a clear idea of how they can use a loan to make more money. Others that have good ideas often don't have sufficient collateral.
Securing financing is a problem across every sector. Could the planned stock exchange make it easier to raise money?
I am not up-to-speed on the stock exchange, but it will be a great way to raise capital without having to go through the banks, who require a lot of collateral. I am happy to share my investment with other shareholders, though I want to keep control of 50 percent of the company. When the stock exchange is ready I will list, though it will take years to build trust among the public.
How long do you think it will be until the economy recovers?
For me, it will take a few more years. Frankly speaking, it could take until 2012 for the people to begin buying land again, which will be the first sector to recover. In general, there is a cure for every disease, and I think this disease will be cured because everyone is aware of it and are trying their best to recover the matter.
Many companies globally are laying off staff. Do you have retrenchment plans?
No, this is not the case at my companies. The Mong Reththy Group has 5,000 workers, the majority on my oil palm plantations. I have not even reduced salaries for any workers yet, and that includes construction workers, port workers and plantation workers. However, I am not sure over the long run - I think that is up to God to decide.
