Feb 16, 2011

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Investors Interested in Agriculture Projects in Cambodia

  • Feb 16, 2011
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  • Cambodia has quietly started to turn up on the agendas of major agriculture, ethanol, bio-diesel, sugar and other producers and forest  plantation growers as an attractive and interesting site to locate projects.

    Cambodia has the lowest cost agricultural land in the region with figures that are substantially cheaper than its neighbors Thailand, Vietnam or Malaysia.  This has interested many new companies with projects to grow crops like sugarcane, cassava, teak and other timber, palm plantations, etc. who have been approaching Runckel & Associates over the last 6-8 months to perform due diligence on these projects and to help shepherd them through the Cambodian approval process.

    Agricultural land in Cambodia is generally provided to qualified projects by the Cambodian government on a lease basis.  Leases can be 70 years or in some cases up to 99 years.  Payment for approved projects for the land lease is paid to the government in a one-time fee and total costs are not that dissimilar from those being charged in Brazil, which also is seeing a boom in agriculture related projects managed by foreign countries.

    In Cambodia, large plots of agricultural land in locations with reasonable access to infrastructure are available but many areas still lack the road structure and access to utilities that are found in more developed countries.  Solutions to dealing with these can be developed, however, such as the use of electrical generators, installation of solar panels, wind power generation and other devices.  All of these technologies are readily available in the region.  Even though these increase costs somewhat, even with these improvements figured in, relative land acquisition costs are still quite competitive and this is what is leading many of the companies to search out the better sites now.

    Beyond actual land acquisitions, the Cambodian government has an approval process for the actual project and there are local requirements that must be met.  These differ from province to province but they are easily dealt with as long as you select a local advisor with good knowledge of the country and as long as you adequately perform due diligence on all partners and major service providers.

    Runckel & Associates sees Cambodia in 2008 as an attractive location for well thought out agricultural projects and looks forward to continued work with many companies on these projects.

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