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In December 2016, GIFT brought leaders from Asia, Europe and Africa to Phnom Penh, the capital of Cambodia. They were challenged with developing a new business model to strengthen the country’s struggling rice sector which employs three million Cambodians or 20% of the population.

Working with SOMA Group, a leading local conglomerate led by GLP alumni and current President of the Cambodian Rice Federation H.E. Sok Puthyvuth, participants produced a business plan for “farmer-centric” contract farming to support increased yields, improved seed and rice quality and ensure the financial benefits are shared more equitably between agribusiness and smallholder farmers.

 

somagroup.com.kh

 
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The Cambodian economy is heavily dependent on rice farming, which accounts for nearly 1/3 of its total agricultural production and utilises 80 percent of cultivated land. In 2012, only 200,000 tons of paddy, out of 9.3 million tons produced, were officially exported.

Cambodian rice was awarded Best Rice of the Year in 2012 and 2013 at the Rice Trader World Rice Conference. There is high potential for surplus paddy to be processed into quality milled rice for export which would increase the value of harvests to farmers and to contribute to the government’s target: to increase rice exports to 1 million tons by 2015.

The current fragmented rice value chain encourages informal exports of unprocessed paddy to Vietnam and Thailand and a loss of value for the economy. Traditional methods of drying and storage prevent farmers from selling their produce at a higher price during the off season when most millers have 30-40 percent idle capacity. A more consistent supply of quality paddy is needed throughout the year.

To address these issues, 25 executives from BASF and from 17 nationalities travelled to Phnom Penh and Battambang to explore the opportunities to strengthen the post-harvest value chain in the rice sector in Cambodia. After meeting key stakeholders, a compelling new social business was proposed to provide farming communities with professional post-harvest services, quality agricultural inputs and training.

This offers an attractive and timely opportunity for investors with an interest in agriculture and wishing to support financially viable businesses with far-reaching social impacts. The new business is projected to yield an attractive return on investment and benefit farming communities and the Cambodian economy.

For a more detailed summery of the business plan, please click here.

 
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Currently the gap between electricity supply and demand in Cambodia is significant. The country relies heavily on imported electricity, diesel and other fossil fuels.. To fulfill the rapidly growing demand for electricity, many are looking at alternative renewable energy solutions, including biomass power generation. 

As an agriculture-led economy and a major rice producing country in Asia, Cambodia produced 9 million tons of paddy rice in 2012. The total power generation potential from rice husks alone – a byproduct of the milling process– is well beyond the country’s current need. However much of the paddy is taken to neighbouring countries through unregulated channels due to inefficient domestic processing and logistics systems. The Cambodian government aims to strengthen the domestic production and processing capacity and to export 1 million tons of milled rice by 2015.

During the 2nd Global Leaders Programme (GLP) customised for Japan-based ORIX Corporation, 26 senior executives from Tokyo and global subsidiaries examined the potential opportunities for power generation from rice husks in Cambodia.

The local partner for the GLP was SOMA Group, one of Cambodia’s leading conglomerates with a strong focus of the country’s development. SOMA Energy, one of the group’s subsidiaries, has acquired the technology to convert rice husk to electricity in the form of gasification units from India-based Ankur and two of GE’s iconic Waukesha gas engines that have been retooled to run on biogas.

After visiting rice mills and potential project sites, meeting with mill owners, electricity distributors and community members, the GLP team proposed three distinct business models and one strong recommendation for SOMA Group to consider. For a more detailed summary of the programme check out the Round-Up.

 

somagroup.com.kh

 
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GIFT ran its first YLP of 2012 in Hong Kong and Cambodia. 21 executives of 11 nationalities representing 13 organisations designed a business plan focused on the creation of a significant investment opportunity in water treatment and distribution in rural Cambodia. This diverse group was comprised of emerging leaders from countries including Japan, Australia, and Malaysia who were nominated by organisations such as BASF, NEC, ORIX, Origin Energy, SOMA group and others. The programme was conducted in close partnership with DEVENCO, one of Cambodia's first venture capital and investment firms who take a socially-oriented approach to investing.

This project highlighted alternative approaches to large infrastructure projects to serve many residing in developing markets in Asia and elsewhere. Participants delivered an output in the form of a business plan, which incorporates substantial social as well as financial impact to the local community and comprises of a new model of consolidating, standardising and improving management processes at existing small scale water operators. The business plan focuses on creating a new holding company and outlines the following: financing expansion into the more remote villages of Cambodia; implementation of a simplified billing and collection system; a comprehensive marketing plan, and more. Click here for a showcase of the business plan. For a summary of the programme check out the programme Round-Up and Photo Story.

 

devenco.com.kh

 
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GIFT designed and facilitated part of the 2010 Global Leaders Module (GLM), a component of the annual Senior Management Programme at the Lee Kuan Yew School of Public Policy. Participants worked with Hydrologic, a spin-off social enterprise set up by International Development Enterprises (IDE) to provide a rural Cambodians with a cheap low-tech device which provides a source of clean drinking water. The United Nations (UN) estimates that 1.8 million children around the world die each year as a result of diarrhoea, a disease partly caused by contaminated water. This issue is of utmost priority in poverty-stricken Cambodia, where years of civil war left much of the country’s infrastructure in ruins. The briefing note explains Cambodia’s access to clean drinking water, along with an analysis of various household water treatment solutions.

The business plan proposed a revamp of the NGO-centric distribution system for the Hydrologic Ceramic Water Purifier into a for-profit model that stresses the education of rural Cambodians. For a visual overview of the programme please see the photo story and please refer to the round-up for a comprehensive review of the field-trip.  If you have any questions regarding any aspect of this programme please contact Eric Stryson on estryson@global-inst.com.

 


   www.ideorg.org                             www.hydrologichealth.com

 
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Participants on the 2009 Cambodia YLP 2009 had the unique challenge of creating a plan to reduce deforestation through the scaling up of energy efficient cook stoves. They worked closely with the Groupe Energies Renouvelables, Environnement et Solidarités in Cambodia (GERES), an international NGO with an established office in Phnom Penh, focused on the delivery of energy-efficient technologies and promotion of rural income generation opportunities. As part of wider efforts to combat deforestation and poverty in the country, participants worked closely with GERES to develop a business plan which would establish a separate social enterprise to market quality rural products such as palm sugar, wood vinegar and green charcoal in Cambodia and abroad.

The business plan provides a viable long-term solution to Cambodia’s deforestation and energy problems by promoting development of the rural economy and sustainable resource management. For a visual overview of the field visit please see the photo story and please refer to the round-up for a comprehensive review of the programme.

 

  www.cambodia.geres.eu