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Japan firm chooses Battambang for cashew nut shell fuel project

Content image - Phnom Penh Post
TPJ CEO Tetsuo Murayama (centre) meets with GMAC director-general Heng Ratana (right) to discuss tentative plans for facilities in Battambang province to convert cashew nut shells into fuel and process the fibre-rich drupe seeds for export. HENG RATANA VIA FB

Japan firm chooses Battambang for cashew nut shell fuel project

Japanese firm Top Planning Japan Co Ltd’s (TPJ) apparent interest in investing in facilities in Battambang province to convert cashew nut shells into fuel and process the fibre-rich seeds for export has been greeted with much enthusiasm among local authorities and has dramatically heightened prospects for a commodity that is predominantly shipped to Vietnam in raw form.

TPJ boss Tetsuo Murayama touched on these tentative plans at a meeting with Cambodian Mine Action Centre (CMAC) director-general Heng Ratana at CMAC headquarters on February 8.

Murayama commented that although Cambodia can be seen as a major cashew nut producer, with annual output in excess of one million tonnes, much of their economic potential is wasted as the bulk of the drupe seeds are sold to Vietnam, unprocessed.

The Kingdom may be able to export over $1 billion worth of – mostly – raw cashew nuts in a year, but TPJ could in theory process a portion of that, and push that figure up as high as $3 billion, he asserted, hinting that Battambang had been selected as the home for the proposed facilities due to CMAC’s demining efforts there, at least in part.

The company’s support will add value to the Kingdom’s cashew nuts and better ensure the financial wellbeing of local farmers, he claimed.

For reference, Ministry of Agriculture, Forestry and Fisheries figures indicate that a kilogramme of cashew nuts exported by the Kingdom in 2021 was valued at a mean of just $1.71, down 22.2 per cent from $2.20 in 2020, as a result of the high proportion of raw seeds.

The meeting comes on the heels of another one, between Murayama and agriculture minister Dith Tina on February 7, in which the latter asked TPJ to look into converting cashew nuts shells into fuel, and processing the crop into different food products, as well as much-needed agricultural fertilisers.

Cashew nut shell liquid (CNSL) is a by-product from industrial processing that can be converted into a renewable, biodegradable and cost-effective biofuel, which is seen as an environmentally friendly replacement for petro-diesel. The biofuel too is often called CNSL.

Dublin-based Research and Markets reports that CNSL had an estimated global market value of $393 million last year, which is forecast to swell to $564 million in 2027, at a compound annual growth rate (CAGR) of 7.5 per cent, fuelled by rising environmental awareness and corresponding changes in standards.

TPJ is also working with Chey Sambor Cashew Nut Processing Handicrafts in southwestern Kampong Thom province’s Kampong Svay district to process cashew nuts for export to Japan.

Of note, an English-language place card at the February 8 meeting confirmed Murayama’s specific position at the company as its “CEO”. Other sources have alternatively identified the businessman as a director, representative director, or director-general.

Speaking to The Post on February 9, Battambang provincial Department of Agriculture director Chhim Vachira suggested that increases in cashew-nut cultivation, processing and packaging capacities in the northwestern province have positive correlations with job creation and farmers’ selling prices.

Noting that growers are essentially entirely dependent on traders who sell the cashew nuts to bordering countries, Vachira voiced delight at the prospect of TPJ’s investment, saying: “We look forward to working with them in a variety of technical areas as well as training, to bolster cultivation and improve farmers’ incomes.”

The climate-resilient cashew tree is fairly easy to grow in any soil conditions and has an economic life span longer than other cash crops such as rice, corn, beans, peanuts and cassava plants, he said.

He shared that the total cultivation area for cashew trees in Battambang is around 3,378ha, similar to 2022 levels, with Samlot, Ratanak Mondol, Rukhak Kiri and Kors Kralor districts acknowledged as major producers.

Battambang provincial Department of Commerce director Kim Hout, admittedly unaware of additional details regarding TPJ’s plans in the province, merely extended a welcome to the proposal, and underscored the cashew nut’s value as an agro-industrial crop with a long economic life span and enormous potential benefits for the economy.

“In my opinion, it’ll be marvellous for agro-industry in the long term, since short-duration crops have constantly had to deal with market challenges,” he said.

In a bid to tap into the vast economic potential of cashew as a cash crop, the Ministry of Commerce drew up the National Policy on Cashew Nuts for 2022-2027, in collaboration with other government agencies, institutions and the private sector.

Key objectives of the national policy include reinforcing Cambodia’s capacity to grow, store, process, package, market, distribute and export cashew nuts and products thereof, and establishing the Kingdom as a major producer and supplier regionally and globally.

In a previous interview with The Post, Cashew nut Association of Cambodia (CAC) president Uon Silot opined that underlying constraints of the current legal and policy framework have kept the cashew nut sector’s potential from being fully unleashed, despite its sizeable contributions to the economy, leading to sub-optimal investment inflows and perceptible signs of neglect.

Silot believes the national policy’s tax perks and other benefits for industry players will woo a wider pool of local and foreign investors into the cashew nut scene. The policy will “reduce trade barriers and enable farmers to sell directly to factories at better rates than to brokers”, he said.

“The government and relevant stakeholders should play close attention, since the [cashew nut] sector uses less land for cultivation, but has the potential to bring in more money into the country than rice,” he contended.

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