Agro-industrial Processing Facilities for Food Fortification

Sun dried fruits

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Agro-industrial Processing Facilities for Food Fortification
Agro-industrial Processing Facilities for Food Fortification
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SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Food and Agriculture
Business Model Description

Invest in developing food processing chains in Cambodia to increase local value-addition, and reduce export of raw materials. Some priority agro-products include rice, cashew-nuts, fruits (dried fruits or puree for fruit juices like mangoes), spices and fish.

Santana Agro Product, founded in 2017, is a cashew processing company. They source raw products from their own plantations or through contract farming, which is subsequently, processed in their factory with a capacity of upto nearly 15,000 tones a year. The products are exported to Japan, Korea, and China.

Kirirom Food Production, founded in 2014, is the leading fruit manufacturer in Cambodia, specialising in dried mangoes. They source raw mangoes from their own production and through contract farming, which are subsequently processed in their own factory at a capacity of 3,000 tones a year. Their products are exported to 12 countries.

Kodo Feed Mill (Cambodia) Co., Ltd. (KFM), founded in 2007, manufactures animal feed. It reports revenue of ~USD 12.7 mn annually and recruits ~100 workers. Since 2015, KFM operates as a subsidiary of CJ Global Holdings Ltd. which acquired 100% stake in the Company from Dongaone Co.,Ltd. for ~USD 5 mn. (12)

Charoen Pokphand Cambodia Co Ltd (CPC), founded in 1978, engages in animal feed production, farming, and distribution, apart from production of food products for consumption. In 2015, CPF Investment Limited (CPF) acquired 75% stake (0.01 mn shares) in CPC from Orient Success International Limited for ~USD 88.17 mn. Since CPF holds 100% stake in CPC, CPC operates as subsidiary of CPF. (13)

CJ Cambodia Co., Ltd. (CJC), founded in 1999, is a manufacturer of Tapioca (a starchy ingredient used in cooking to thicken soups and sweeten the flavor of baked goods). In 2014, MH Ethanol Co., Ltd. sold 80% of its stake (1.89 mn shares and ~0.47 mn preferred shares; currently holds 20% stake) in CJC for ~USD 12 mn. (14)

Expected Impact

Processing of food products to address nutrition needs; improve income of agricultural workers with increased export of processed food products

How is this information gathered?
Updated: 30 Aug, 2022 Date of Production: 31 Aug, 2022
Cambodia
Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
15% - 20% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 100 million - USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
As per experts, ticket size can range between USD 200,000 to USD 20 mn, depending upon the processing capacity, type of equipment required for processing, type of facilities and the crops processed.
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1) Decent Work and Economic Growth (SDG 8) Sustainable Cities and Communities (SDG 11)

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Sector Sources
  • (1) USAID. (2022). Agriculture and Food Security. https://www.usaid.gov/cambodia/agriculture-and-food-security (2) Statastica. (2022). Share of Economic Sectors in the GDP in Cambodia 2010-2020. https://www.statista.com/statistics/438728/share-of-economic-sectors-in-the-gdp-in-cambodia/ (3) Sachs et al. (2021). Sustainable Development Report 2021. Cambridge: Cambridge University Press. https://s3.amazonaws.com/sustainabledevelopment.report/2021/2021-sustainable-development-report.pdf (4) World Bank. (2020). Prevalence of Undernourishment (% of Population)--Cambodia. https://data.worldbank.org/indicator/SN.ITK.DEFC.ZS?locations=KH (5) Royal Government of Cambodia. (2018). National Strategic Development Plan (NSDP) 2019-2023. https://www.mop.gov.kh/en-us/Home/Download/def33e18-289c-45b1-b6e3-fb357435c019 (6) Asian Development Bank. (2021). Cambodia Agriculture, Natural Resoures, and Rural Development Sector Assessment, Strategy, and Road Map. Cambodia Agriculture Rural Development Map https://www.adb.org/sites/default/files/publication/718806/cambodia-agriculture-rural-development-road-map.pdf (7) USAID. (2022). Agriculture and Food Security. https://www.usaid.gov/cambodia/agriculture-and-food-security (8) Statistica. (2021). Cambodia: Share of Economic Sectors in the Gross Domestic Product (GDP) from 2010 to 2020. https://www.statista.com/statistics/438728/share-of-economic-sectors-in-the-gdp-in-cambodia/ (9) Thorng, R. (2022) Improving Post Harvest Practices to Reduce Food Loss. https://www.mekonginstitute.org/features/improving-postharvest-practices-to-reduce-food-loss/#:~:text=Postharvest%20losses%20typically%20range%20from,in%20developing%20countries%2C%20including%20Cambodia. (10) Royal Government of Cambodia. (2018). Rectangular Strategy for Growth, Employment, Equity and Efficiency: Building Foundation Toward Realizing the Cambodia Vision 2050. Rectangular Strategy Phase IV http://cnv.org.kh/wp-content/uploads/2012/10/Rectangular-Strategy-Phase-IV-of-the-Royal-Government-of-Cambodia-of-the-Sixth-Legislature-of-the-National-Assembly-2018-2023.pdf (11) Trading Economics. (2022). Cambodia--Employees, Agriculture, Female (% of Female Employment). https://tradingeconomics.com/cambodia/employees-agriculture-female-percent-of-female-employment-wb-data.html#:~:text=Employment%20in%20agriculture%2C%20female%20(%25,compiled%20from%20officially%20recognized%20sources.
IOA Sources
  • (12) Market Screener. (2020). Improving Post-Harvest Practices to Reduce Food Loss. https://www.mekonginstitute.org/features/improving-postharvest-practices-to-reduce-food-loss/#:~:text=Postharvest%20losses%20typically%20range%20from,in%20developing%20countries%2C%20including%20Cambodia. (13) Charoen Pokphand Foods. (2015). CPF Enhances its Position as a Leading Agro-industrial Business Operator in ASEAN Acquiring More Businesses in Cambodia. https://www.cpfworldwide.com/en/media-center/137 (14) Market Screener. (2014). MH Ethnol Co., Ltd. Completed the Sale of an 80% Stake in CJ Cambodia Co., Ltd. https://www.marketscreener.com/quote/stock/MH-ETHANOL-CO-LTD-19180577/news/MH-Ethanol-Co-Ltd-completed-the-sale-of-an-80-stake-in-CJ-Cambodia-Co-Ltd-38781817/ (15) The Phnom Penh Post. (2020). Kingdom's Agro-processing Potential. https://www.phnompenhpost.com/opinion/kingdoms-agro-processing-potential (16) Goletti, F. & Sin, S. (2016). Development of Master Plan for Crop Production in Cambodia by 2030. http://extwprlegs1.fao.org/docs/pdf/cam173300.pdf (17) The Phnom Penh Post. (2021). Cashew Nut Exports Grow 343% to 910,000 Tonnes in January-October. https://www.phnompenhpost.com/business/cashew-nut-exports-grow-343-910000-tonnes-january-october (18) Open Development Cambodia. (2016). Agricultural Commodities, Processing and Products. https://opendevelopmentcambodia.net/topics/agricultural-commodities-processing-and-products/#:~:text=More%20than%2090%20percent%20of,growth%20rates%20in%20the%20world (19) Sustainable Intensification Innovation Lab. (2021). Women in Agriculture Network (WAgN) Cambodia: Gender and Ecologically-Sensitive Agriculture. https://www.k-state.edu/siil/whatwedo/pastprojects/cambodia/ (20) Royal Government of Cambodia. (2019). Cambodia's Voluntary National Review 2019. https://sustainabledevelopment.un.org/content/documents/23603Cambodia_VNR_SDPM_Approved.pdf (21) World Bank. (2019). Prevalence of Undernourishment (% of Population)--Cambodia. https://data.worldbank.org/indicator/SN.ITK.DEFC.ZS?locations=KH (22) World Bank. (2019). Prevalence of Moderate or Severe Food Insecurity in the Population (% of Population)--Cambodia. https://data.worldbank.org/indicator/SN.ITK.MSFI.ZS?locations=KH (23) Royal Government of Cambodia. (2018). Cambodian Sustainable Development Goals (CSDGs) Framework (2016-2030). https://data.opendevelopmentmekong.net/dataset/3aacd312-3b1e-429c-ac1e-33b90949607d/resource/d340c835-e705-40a4-8fb3-66f957670072/download/csdg_framework_2016-2030_english_last_final-1.pdf (24) Statastica. (2022). Trade balance of Cambodia. https://www.statista.com/statistics/438757/trade-balance-of-cambodia/ (25) Ministry of Agriculture, Forestry and Fisheries. (2020). Agricultural Sector Master Plan 2030. Agricultural Sector Master Plan 2030 https://web.maff.gov.kh/documents/gQMqjQBOBX?lang=en (26) The Phnom Penh Post. (2022). National Cashew Nut Policy Edges Closer to Council of Minister. https://www.phnompenhpost.com/business/national-cashew-nut-policy-edges-closer-council-ministers (27) Goletti, F. & Sin, S. (2016). Development of Master Plan for Crop Production in Cambodia by 2030. http://extwprlegs1.fao.org/docs/pdf/cam173300.pdf (28) Royal Government of Cambodia. (2018). Rectangular Strategy for Growth, Employment, Equity and Efficiency: Building Foundation Toward Realizing the Cambodia Vision 2050. Rectangular Strategy Phase IV http://cnv.org.kh/wp-content/uploads/2012/10/Rectangular-Strategy-Phase-IV-of-the-Royal-Government-of-Cambodia-of-the-Sixth-Legislature-of-the-National-Assembly-2018-2023.pdf (29) Khmer Times. (2021). China-Cambodia FTA to Take Effect on Jan. 1, 2022. https://www.khmertimeskh.com/50976287/china-cambodia-fta-to-take-effect-on-jan-1-2022-2/ (30) Khmer Times. (2022). Cabinet Approves Draft Law on Plant Protection and Phytosanitary Measures. https://www.khmertimeskh.com/501019592/cabinet-approves-draft-law-on-plant-protection-and-phytosanitary-measures/ (31) People's Rupublic of China. (2022). China-Cambodia FTA. http://fta.mofcom.gov.cn/topic/encambodia.shtml (32) Council for the Development of Cambodia. (2021). Law on Investment. https://www.cambodiainvestment.gov.kh/en/law-on-investment-2021.html