Food Processing Sector

Sector DefinitionManufacture of food products and beverages (food processing):

the transformation of raw ingredients, by physical or chemical means into food, or of food into other forms.

Food processing combines raw food ingredients to produce marketable food products that can be easily prepared and served by the consumer

(International Food Information Council Foundation).

Over half the world’s urban population will be in emerging economies.

Demand for food in emerging markets expected to rise because of population and income growth [and urbanization] and are likely to adopt a rich country diet—more calories, protein, and processed foods (Goedde et al., 2015)

Consumers are increasingly health conscious: governments are tightening standards for food production/more stringent quality and safety requirements.

Exports of processed food are expected to make up 12 per cent of total exports by 2025 (Fareastern Agriculture, 2015).

Asian food demand expected to outpace local food production, leading to higher imports of meat and processed foods rather than traditional staple grains. (A review of market data concerning Asian Food and beverage markets)

FP Sector Outlook

3

Patterns and Trends in Trade

Destination of Processed Food exports: 58 countries Malaysia, Thailand China, EU_France, Poland, Africa)

Very few rice millers exporters (14 firms);4 food processing firms in SEZ

Small % of total exports : rice export volume(2015): 0.46 M tons , $210 Million; Informal Sector: $512 Million (2.3 Million MT) Thailand and Vietnam

Strict SPS requirements

Estimates of Animal, Food and For. Product Imports by Cambodia, US$ thousand, 2001-201

2001 2009 2011Fo

od

& L

ive

An

imal

s

Sugar/sugar prep/honey 49,352 194,810 292,634

Miscellaneous food products 19,924 100,838 183,984

Animal feed ex un-milled cereals 1,501 59,287 121,400

Cereals/cereal preparation 22,403 61,714 106,353

Dairy products & eggs 16,726 48,943 73,128

Vegetables and fruit 12,620 51,560 55,154

Live animals except fish 214 46,526 52,109

Coffee/tea/cocoa/spices 1,358 11,488 32,757

Fish/shellfish/etc. 7,716 23,555 29,071

Meat & preparations 387 2,346 26,750

No

n-F

oo

d

Pro

du

cts

Natural rubber 1,898 968 3,572

Oil seeds 311 658 2,010

Wood and wood products 48 601 137

Nat. gum/ resin/ pharm. plants etc 143 26 20

Source: Cambodia Trade Integration Strategy 2013-2018 and Trade SWAp Road Map 2013-2018

Agro-Industrial Products are among the Priority Sector of Cambodia (IDP 2015-2025)

• New industries markets with high value-added products: machinery/mechanic/electronic/electric equipment/ transport assembly and natural resource processing

• Drugs and medical equipment production, construction materials, packaging equipment for export, furniture manufacturing and industrial equipment, etc.

• Agro-industrial products

• Supporting industries serving regional production chains linked with either global markets

Industry share in employment (ADB Country Diagnostic Study 2014) : 50% garments25% construction10% food processing; 13% other manufacturing

FP Total Persons Engaged

0 10,000 20,000 30,000 40,000

Manufacturing of fish and molluscks

Processing of meat

Manufacture of starches and starch…

Manufacture of malt liquors and malt

Manufacture of soft drinks

Manufacture of bakery products

Manufacture of macaroni, noodles,…

Distilling, rectifying and blending of…

Manufacture of sugar

Manufacture of grain mill products

Regular Employee

Food Processing (FP) Number of Establishment

0 5000 10000 15000 20000

Manufacturing of fish and molluscks

Manufacture of soft drinks

Manufacture of starches and starch…

Manufacture of wines

Processing of meat

Manufacture of bakery products

Manufacture of macaroni, noodles,…

Distilling, rectifying and blending of…

Manufacture of sugar

Manufacture of grain mill products

Establishment

FP Annual Sale (million US$)Group Sale

Manufacture of soft drinks 52,922

Manufacture of grain mill products 13,442

Manufacture of macaroni, noodles and similar

farinaceous products10,302

Processing of food and vegetables 3,955

Manufacture of malt liquors and malt 3,765

Distilling, rectifying and blending of spirits 764

Manufacture of wines 764

Manufacture of vegetable oils and fats (except

palm oil, coconut oil and corn oil)696

Processing of dairy products 370

Processing of meat 357

FP Export Value

$0 $50 $100 $150 $200 $250 $300

Manufacture of bakery products

Manufacture of macaroni, noodles,…

Manufacture of malt liquors and malt

Manufacture of vegetable oils and fats…

Processing of fish and molluscks

Processing of food and vegetables

Manufacture of wines

Manufacture of sugar

Manufacture of starches and starch…

Manufacture of grain mill products

Export Value (Million)

FP Registration

0% 20% 40% 60% 80% 100%

Manufacture of macaroni, noodles,…

Manufacture of grain mill products

Manufacture of wines

Manufacture of starches and starch…

Manufacturing of fish and molluscks

Processing of meat

Manufacture of bakery products

Processing and preserving of fruit and…

Manufacture of soft drinks

Manufacture of cocoa, chocolate and…

Registered Enterprise

Registered Not registered

Top Ten FP Products(Based on the 6 Criteria)

Product Rank

Manufacture of grain mill products 1

Distilling, rectifying and blending of spirits 2

Manufacture of soft drinks 3

Manufacture of sugar4

Manufacture of malt liquors and malt5

Manufacture of macaroni, noodles, couscous and similar farinaceous

products 6

Manufacturing of fish and molluscks 7

Manufacture of starches and starch products 8

Manufacture of vegetable oils and fats 9

Manufacture of wines 10

Ranked based on: (1) No. of Establishments; (2) Registration; (3) Person Engage; (4) Annual Sale; (5) Export Value; (6) Emerging Industry

Strengths of the Manufacturing SectorEnjoys some benefit from the market access to

the US, EU, Canada and Japan through trade agreements

Food, beverage and tobacco industries slightly increased (GDP) due to the government policy of promoting export particularly rice products (CDC, Economic Overview of Cambodia).

Cambodia is centrally situated for easy access to major Asian economies

Quick and easy business & investment licensing registrations (RADIUS)

Issues Specific to FP (KII and Literature Review) Most industries are family-based with lack of

entrepreneurship and limited use of technology limiting its competitiveness in the international markets.

High logistics cost (RADIUS); Expensive cost of transportation; the waterways and railways transport (which is cheaper than land transportation) are not well-developed

Myanmar emerging as low cost rice exporter and competitor with duty-free status

High energy cost (CAMFEBA, 2013). The technology for alternative energy such as gasifier is still not viable

Lack of skilled technicians on rice milling technology. Rice millers has to import Technicians from Thailand and Vietnam

Expensive cost of certification (AMRU KII)Outmoded machines (e.g. chippers for cassava) (Value Chain

Info Unit, 2016)No warehouses to store rice to be exported to other countries

Thank you!!!