The Asian Development Bank (ADB) and De Heus TMH Co Ltd (DH-TMH) on July 26 signed a $15 million loan to boost Cambodia’s animal feed supply chain, and in particular, to reduce the outflow of agricultural raw materials from the Kingdom.

The loan will be used to expand DM-TMH’s storage and processing capacity of animal feed production in Kampong Speu province, ADB said in a statement.

“The additional storage and procurement of processing machinery will promote efficient feed production. This will allow the company to buy more local raw materials like maize, rice and cassava from smallholder farmers within its supply chain, enabling a supply of affordable, high-quality feed for livestock and fish farmers,” it added.

At the loan’s signing ceremony, Minister of Agriculture, Forestry and Fisheries Veng Sakhon said that Cambodia still faces many challenges when it comes to processing raw materials, which he ascribed to infrastructure that is “slightly more expensive” than in neighbouring countries.

He noted that 21 companies have set up 23 factories with the annual capacity to produce 1.2 million tonnes of animal feed, which accounts for 55 per cent of domestic market supply.

Still, Cambodia imports animal feed worth $200-300 million each year from nearby countries such as Thailand and Vietnam, he said, adding that the ADB’s loan to the company would prop up production and supplement domestic supply, as well as develop additional markets for corn and cassava farmers.

He remarked that DM-TMH uses solar energy to trim electricity costs and is also looking into fish feed production.

DM-TMH representative Hoeng Keo Chetra said the loan would be used in two phases, lasting between seven and 10 years, and be invested in the raw material supply chain, ranging from purchasing to processing.

He added that the loan was facilitated and supported by the agriculture ministry in a bid to ensure a more stable domestic supply and reduce Cambodia’s agricultural raw material exports to neighbouring countries.

“We’ve observed that our raw materials always flow out to many neighbouring countries during the harvest season, and then they are scarce after the harvest, hence we need more funding and support to enable us to procure these products,” he said.

ADB country director for Cambodia Jyotsana Varma said in the statement: “By supporting DH-TMH, we are helping to strengthen the feed value chain, improve livelihoods of feed crop, livestock, and fish farmers, and support sustainable and resilient agricultural practices.

“Developing locally sourced, high-quality, and affordable animal feed supply is integral in safeguarding Cambodia’s food security and reducing reliance on imported feed inputs.”