The two companies formed a joint venture (JV) to invest $100m to build a cashew nut processing facility in the Kampong Cham province in Cambodia.
Syaiful Hazreen Bin H.J. Hasan Nodin, director of Camcashew, said the Korean firm hasagreed to buy 10,000 tons of processed Cambodian cashews.
Cambodia produces around 104,000 ton of raw cashews annually for export to Vietnam, Thailand, China and India, according to the Ministry of Agriculture, Forestry and Fisheries. Vietnam is the largest importer, purchasing 100,000 tons last year.
However, most of the raw cashew nuts are sent to Vietnam or China as the country does not have the capacity to process them.
Raw cashew nuts sell for $2 per kilogram, while processed cashews go for $17 per kilogram, according to Kampong Thom’s Cashew Nut Association.
However, Camcashew’s 4,000 hectares of plantations in Kratie are not enough to produce that amount, so the JV is spending $80m to purchase 40,000 tons of raw nuts from cashew farmer associations in the Cambodian provinces of Kampong Thom, Kampong Cham, Kratie, Ratanakiri and Preah Vihear, which together hold 30,000 hectares of cashew fields.
The remaining $20m will be spent on purchasing a 400-hectare plot of land and machinery for processing the raw kernels.
“During phase one of the agreement, we will be investing $30 million on cashew-processing facilities and plantations. We will expand investment and production in the following years,” said Hasan Nodin.
He added Camcashew has only supplied cashew nuts to the Cambodian market to-date, so the MoU will boost its export efforts to Korea.
Forward looking MoU
The MoU is valid for one year, however, both companies have committed to extending the agreement providing Camcashew can successfully meet the export requirements.
Around 1,000 tons of nuts are expected to be exported to South Korea by February 2018.