South Korea has pledged to help Cambodia tackle some of the main issues affecting the agriculture sector.
The pledge was made during talks last week between Veng Sakhon, Minister of Agriculture and Oh Nak-young, South Korean Ambassador to Cambodia.
Cambodia is a producer of agricultural raw materials, but has limited processing capacity, which has impacted Cambodian exports to South Korea in the past.
There are key challenges that Korean companies face in Cambodia. The governments in Cambodia and South Korea will need to work together to formulate a winning strategy between investors and producers to address those issues, the Korean ambassador said.
“These issues include providing sanitation certificates, export cooperation between state institutions and the private sector, electricity and transportation costs and tax on spare parts, agricultural machinery and high VAT prices, which affect the value of agricultural products,” Mr Nak-young said.
Mr Nak-young said when these issues are resolved, the investment environment will improve.
“The workers in the agricultural sector will be able to return to Cambodia, where they would have the opportunity to work for Korean companies investing in Cambodia,” he added.
Mr Sakhon said Cambodia has very limited capacity to process raw materials, which forces companies to sell unprocessed products directly to buyers abroad, missing out on the opportunity to add value to those products and increase profits.
“For this reason, the government pledges to work together with Korean investors to develop the processing industry and the country’s export capabilities,” he said, adding that the government also plans to expand the airport, build deep-sea ports and other important infrastructure and lower electricity costs.
“South Korea will support and sponsor the ministry and the Agricultural Technology Information Centre to help farmers and the Ministry resolve both the technical and marketing issues,” Mr Nak-young said.
There are now 59 companies from South Korea operating in the country, 10 of which are investing in the agricultural sector or are studying investment opportunities.