Australia is working with Cambodia to establish an agro-industrial park (AIP) which will process key agricultural produce like cashews, cassava, milled rice and bananas, adding value to them and creating premium products for both the domestic and export markets.

According to a May 2 social media post by the Australian embassy, 95 per cent of Cambodia’s agricultural exports are sold to neighbouring ASEAN countries as raw products. After importing them, these countries then process them into more valuable goods, such as juices, jams, rice crackers, baby food, flour and biofuels.

The embassy said that in order to increase its profitability, Cambodia needs to invest in processing facilities, hence its decision to support the establishment of the Kingdom’s first agricultural park.

“The agro-industrial park will provide agro-food processing, research and development, and capacity building, as well as a safe, secure inclusive workplace, especially for female or underprivileged staff. Agro-industrial parks have great potential for Cambodia,” explained the embassy.

Yang Saing Koma, secretary of state at the Ministry of Agriculture, Forestry and Fisheries, said the project will benefit both the agricultural and industrial sectors.

“In recent years we have established many rice mills, but we still lack cashew processing facilities. We need to expand the scope of our facilities for whichever crops are abundant. If we are producing a surfeit of mangos, we should look to add value to them, for example. Where there are plenty of cashews, we must create cashew processing facilities,” he added.

He cautioned that there were many issues to be considered, including obtaining capital, the potential costs of processing and conceiving marketing plans for the finished products.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said he had already attended two meetings with the Ministry of Economy and Finance and the AIP’s study team, with stakeholders committed to continuing to push for the AIP to be established as soon as possible.

He added that during the discussions, the study team identified some priority areas in provinces such as Battambang, which is in line with the government policy that has designated the Cambodia’s fourth economic pole.

“Because we still lack the infrastructure for processing and storage, we export most of our raw materials. The establishment of an AIP could change this for the better,” he concluded.

Hong Vannak, an economist at the International Relations Institute at the Royal Academy of Cambodia, said that the establishment of an AIP would play to one of the Kingdom’s industrial strengths: raw agricultural materials.

“I understand that it should boost Cambodian agriculture to another level. If we have suitable agro-industrial facilities that can produce value-added products – whether for domestic sale or export – it will give our farmers confidence,” he added.

According to a 2022 feasibility study by the government, the AIP is expected to contribute $5.1 billion to the Cambodian economy by 2045 and create up to 100,000 new jobs, with more than half of them being filled by women.

Australia’s leading economic development programme, CAPRED, recently organised a research trip to Australia for members of the AIP Secretariat. They studied government support, public relations, and researched ecosystem building and potential challenges of establishing the parks.