BUILDING CAMBODIA'S NASCENT COCONUT INDUSTRY

Hong Kong and Cambodia | 13-24 November 2017

Global Leaders Programme | Coconuts in Cambodia
SOMA Group

In November 2017, GIFT's Global Leaders Programme (GLP) brought together leaders from Asia, North America, Australia and Europe to explore the opportunities and challenges associated with Cambodia's coconut sector. In collaboration with SOMA Group, one of Cambodia’s leading industrial conglomerates with a strong focus on the country’s development, participants designed a business model for building a high value added coconut value chain in Cambodia that includes village-level collection and processing hubs that support local entrepreneurs, rural communities and smallholder farmers.


Cambodia

Cambodia is located in the Greater Mekong Sub-Region, bordering Thailand, Vietnam and Laos. It has a population of almost 15.7 million, of which 97.6% are Khmer, with smaller populations of Vietnamese and Chinese.

78% of the population in Cambodia live in rural areas and around 67% of the total labour force depend on agriculture for their livelihoods in 2014. The government has highlighted the promotion of agricultural development as the primary strategy for achieving higher growth and reducing poverty. One of the government’s key policy areas involves strengthening agricultural productivity and processing, and promoting exports to foreign markets.

Agriculture in Cambodia

Currently only 10% of Cambodia’s agricultural goods are processed. Expanding the agro-processing sector is a priority in the 2015 Industrial Development Policy (IDP).


Distinguished Guest Speakers

 
David Eldon, Former Chairman, HSBC Asia Pacific

DAVID ELDON
Former Chairman, HSBC Asia Pacific and Non-Executive Chairman
HSBC Bank Middle East

Zuraidah Ibrahim, Deputy Executive Editor, SCMP

ZURAIDAH IBRAHIM
Deputy Executive Editor
South China Morning Post (SCMP)

Graham Barkus, Partner & Head of Leadership Advisory, The Human Factor

GRAHAM BARKUS
Partner & Head of Leadership Advisory
The Human Factor

William Kuan, Chairman and President Commissioner, PT Avrist Assurance

WILLIAM KUAN
Chairman and President Commissioner
PT Avrist Assurance

 

On the ground in Cambodia

The coconut is one of the most versatile and nutritious fruits and food, and for centuries has been a staple crop for many islands and Asian countries. In Cambodia, coconuts are cultivated in the Southern coastal provinces such as Preah Sihanouk, Kampong Speu and Kampot with a total of 16,935 hectares. Kampot alone has 4,868 hectares of coconut trees with a total of 598,764 trees. Most coconuts produced by smallholder farmers are sold for coconut water, and each household usually has 10-30 coconut palms on their plot of land. Coconuts provide regular income to supplement rice production.

 

Participants travelled to Phnom Penh, Bati and Kampot to visit SOMA farm, virgin coconut oil processor CocoKhmer, smallholder farmers, coconut traders as well as local authorities and learn more about the coconut value chain and the needs of smallholder farmers.

Coconut water, coconut oil, coconut milk and cream have become mainstream products and have witnessed significant growth over last few years. The global market for coconut water hit US$2.2 billion in 2016, up from US$533 million in 2011.  Virgin Coconut Oil (VCO) captured a market size of US$2.1 billion in 2016 and is anticipated to reach US$4.2 billion by 2024 with rising consumer interest towards natural food and beauty products.

SOMA coconut plantation

SOMA currently operates 150+ ha of land in Tonle Bati (south of Phnom Penh) and in Kampot province for coconuts. The trees, between 2 and 6 years old, are currently harvested for young coconuts that are sold primarily for water. SOMA plans to redirect its production towards mature coconuts for coconut oil and other downstream products of higher value.

Peter Sok, CEO, SOMA Group

Peter Sok, CEO of SOMA Group shared the vision of the company in advancing agriculture in Cambodia with participants.

SOMA Farm

Participants visit SOMA Farm in Bati to learn about coconut plantation and SOMA's plan in developing the coconut value chain. 

Princess Norodom Arunrasmy

Participants met with Princess Norodom Arunrasmy at Palace Gate Hotel.
 

Vuthy.jpg

Participants visited a village processing centre in Kampot set up by Vuthy, a local entrepreneur.

Village level virgin coconut oil processing centre in Cambodia

The village processing centre just outside Kampot supplies virgin coconut oil to Coco Khmer who makes downstream products for the consumer market. Close to rural communities, the processing centre keeps jobs closer to home for the local community.

 


Working towards a solution

The GLP uses real-world field projects as a learning platform for participants to develop and hone the practical skills needed to manage diverse teams in unfamiliar situations. Through meetings with government, local communities. farmers and entrepreneurs, and through frank and open discussions, participants learn to navigate conflicting and contradictory views to transform concepts and theories into realities and practical solutions on the ground.

The proposed Business Model recommends that SOMA establish the Cambodia Coconut Company (CCC), an entity that will offer smallholder farmers a coconut planting incentive scheme, start virgin coconut oil (VCO) processing at Village Hubs, offer agronomy training, demonstration and R&D for coconut development at its Technology Centre and affiliated Centre of Excellence for Coconut R&D, and at the same time create its own plantations of non-fragrant coconut varieties, and process and package VCO and coconut water at a centralised facility.

A page extracted from the Executive Summary

Below are a few slides from the detailed Business Plan

The Global Leaders Programme culminated with a public forum in Phnom Penh, during which participants presented the highlights of their business model to the project partners and to an audience of local community, business leaders, government officials and university students.

Guest speakers included H.E Kong Chan, Under Secretary of State, Ministry of Agriculture, Forestry, and Fishery, and Mr Kevin Ngo, Managing Director of SOMA Water.

The event was featured in the Khmer Times.


Global Leaders Programme Cambodia 2017

For more information about the 2017 Cambodia Global Leaders Programme, or about the Global Leaders Programme in general,
please write to us at enquiry@global-inst.com