Thai rice exporter invests in Cambodia | Bangkok Post: learning

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Thailand's top rice exporter in 2011 invests in Cambodia: ready-to-eat-meals & processing for export in Cambodia rather than Vietnam.

Photo above of some ready-to-eat rice meals in pouches that will be produced and sold in Cambodia as part of the Thai rice exporter STC Group's investment in Cambodia's rice industry.

Also read in the Bangkok Post about how CP Group has turned to the domestic rice market as exports dwindle here and a report yesterday on Thailand's rice sector at New Mandala blog at Australia National University here.

Click button to listen to Cambodian Rice Investment to download

AGRIBUSINESS

STC ploughs its way into Cambodia

Joint venture to help reduce local risk. A number of factors ranging from lower global demand to higher local prices have conspired to threaten Thai rice exports this year.

Walailak Keeratipipatpong

STC Group, Thailand's biggest rice exporter, has become the latest company to explore rice investment opportunities in Cambodia.

Talks to form a venture with a Cambodian partner, which have started since last year, are likely to be finalised some time this year, an executive said.

"The venture will focus on rice processing, logistics and rice exports from Cambodia," said Wanlop Pichpongsa, deputy managing director of Capital Rice Co, STC Group's rice-exporting flagship.

STC is among several Thai investors seeking to enter the thriving rice industry of Cambodia, whose government has planned to export about one million tonnes over the next few years.

Among the prominent companies are Asia Golden Rice, a leading rice exporter which has announced to pour in 1.5 billion baht to process one million tonnes of rice a year in Cambodia's southern province of Kampot.

Actually, Cambodia's rice industry has strong potential thanks to its naturally rich soil. The country has a number of millers and processing plants but they are not enough

Most paddy is sold to be processed in Vietnam for exports and Mr Wanlop said the joint investment could help Cambodia earn more than exporting the rice in commodity form.

STC has added ready-to-eat varieties in retort pouches to cater to the local market.

The development is seen as a win-win business. While Cambodia still wants expertise in rice processing and marketing, some Thai exporters need to broaden their businesses to minimise risks locally. Thai rice exports are projected to drop sharply this year due to dwindling global demand and uncompetitive prices.

The Thai Rice Exporters Association also said the high paddy price offered under the current rice-pledging programme has eroded the competitiveness of Thai rice.

These factors would push down Thai rice exports this year to only 7 million tonnes, a 30% drop from 10.6 million tonnes shipped in 2011.

"In particular, less demand from Indonesia and Bangladesh is a factor that causes the decline," said Mr Wanlop, also the secretary-general of the association.

Indonesia imported more than 900,000 tonnes of rice from Thailand last year, a 230% jump year-on-year, while Bangladesh bought 736,782 tonnes, up 422% over the levels in 2011.

STC was a major beneficiary of the large orders from the two countries, catapulting it to the top spot in the exporters' rankings in 2011, with a total of 2.02 million tonnes shipped, or 19% of the 10.6 million tonnes the country exported last year.

But such a bonanza is unlikely to repeat his year as production in Indonesia and Bangladesh is rising, resulting in smaller imports, he noted.

The Food Agriculture Organisation forecasts the 2012 world rice output will rise 2.46% from last year to 461.44 million tonnes of paddy. Production from Indonesia and Bangladesh would increase by 5% and 2% to 37 million and 34 million tonnes of paddy respectively.

Consequently, world rice trade this year is expected at 32.8 million tonnes, down from 34.5 million tonnes in 2011.

Whether India would continue to export after completing sales of two million tonnes in the first quarter of this year is a condition that will affect the performance of Thai rice exports, he said.

India offered low selling prices at an average of US$433 a tonne for 5%-grade white rice, compared with $533 a tonne of Thai rice. India's 5%-grade parboiled rice was sold at $450 a tonne, about $100 lower than of the premium grade of Thai parboiled rice. 

But there is a chance to see bullish trade in the first half this year, driven by possible large orders from Nigeria, Thailand's biggest rice buyer which bought 1.54 million tonnes of rice in 2011. 

According to Mr Wanlop, the Nigerian government will likely increase the levy on rice imports in July, triggering a rush to import the commodity in the first half.

Besides expanding business to neighbouring country, STC has planned to complete the 500-million-baht improvement of its two rice-processing facilities in Ayutthaya and Samut Prakan provinces this year. 

The project would enable the group to maintain a 18-19% share in the country's exports. Besides, it will focus more on retail sales by adding ready-to-eat rice products in retort pouches after its fragrant and organic rice products received a good market response, with about 40,000 tonnes in local sales

(Source: Bangkok Post, AGRIBUSINESS, STC ploughs its way into Cambodia, Joint venture to help reduce local risk, 6/02/2012, Walailak Keeratipipatpong, link) 

Rice Industry Vocabulary

factors - the different things that affect the outcome of a situation, event, or decision ปัจจัย
global - throughout the world ทั่วโลก
demand - the need and desire to buy goods and services by households and businesses
conspired - acted together for a criminal purpose
X, Y and Z conspired to Z - factors X, Y and Z together caused or did Z
threaten - to say that you might do something bad or harmful, especially in order to make someone do something ขู่ ขู่เข็ญ คุกคาม ทำให้กลัว

a number of factors ranging from lower global demand to higher local prices have conspired to threaten Thai rice exports this year, says Mr Wanlop.

AGRIBUSINESS: STC ploughs its way into Cambodia, Joint venture to help reduce local risk by Walailak Keeratipipatpong

agribusiness - business having to do with agriculture (growing or processing crops or selling supplies)
plough into - enter into a place in a big way (people cannot help but to notice)

venture - a new business project, which involves risk or uncertainty ธุริกิจเสี่ยงแต่สามารถทำกำไรได้
joint venture - when two or more companies join together to run and own a business

local - in or related to the area that you live
risk - danger, how likely or possible it is for a bad event that causes harm and damage ความเสี่ยง
local - in this country (here: Thailand)
local risk - risk in this country
reduce local risk - reduce the risk of having all of the company's business in Thailand

STC ploughs its way into Cambodia, Joint venture to help reduce local risk

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
opportunities - situations in which it is possible to do what you want or need to do
investment opportunities
rice investment opportunities
explore investment opportunities
explore rice investment opportunities

STC Group, Thailand's biggest rice exporter, has become the latest company to explore rice investment opportunities in Cambodia.

form a venture - create and start a new business project
executive - the highest level managers in a company

Talks to form a venture with a Cambodian partner, which have started since last year, are likely to be finalised some time this year, an executive said.

focus - the main thing it is concerned with ให้ความสำคัญ
logistics - transporting and storing goods on the way from factory to consumer (See Wikipedia) การขนส่งสินค้า
deputy - a person who is given the power to do something instead of another person, or the person whose rank is immediately below that of the leader of an organisation รอง, ตัวแทน,ผู้รักษาการแทน
flagship - the most important in a group of things owned by a company (for example: flagship company, flagship publication) (See glossary) ที่เป็นตัวนำ ที่สำคัญที่สุด

"The venture will focus on rice processing, logistics and rice exports from Cambodia," said Wanlop Pichpongsa, deputy managing director of Capital Rice Co, STC Group's rice-exporting flagship.

thriving - very successful ประสบความสำเร็จอย่างสูง

STC is among several Thai investors seeking to enter the thriving rice industry of Cambodia, whose government has planned to export about one million tonnes over the next few years.

prominent - important and well known สำคัญ เด่น สำคัญ, มีชื่อเสียง, เด่น
process - 1. mill rice or some other crop or meat product to make it into a product to sell in stores (food processing); 2. a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ

Among the prominent companies are Asia Golden Rice, a leading rice exporter which has announced to pour in 1.5 billion baht to process one million tonnes of rice a year in Cambodia's southern province of Kampot.

potential - the possibility of success ที่มีศักยภาพ ที่เป็นไปได้
has strong potential - has great chance of becoming successful

soil - the dirt that crops are grown in (See Wikipedia)
rich soil - soil good for growing crops (with all the right natural chemicals in it)
naturally rich soil
has strong potential thanks to its naturally rich soil.

rice mill - a factory for turning rice from a crop into a product that can be sold in stores or stored for future sale
millers - owners of rice mills
plants - factories
processing plants - rice mills or factories that turn rice into food products (food processing)

Actually, Cambodia's rice industry has strong potential thanks to its naturally rich soil. The country has a number of millers and processing plants but they are not enough

paddy - rice after it has been harvested from the field ข้าวเปลือก
processed - treated in some way, e.g., treated with chemicals, cut, etc.

joint - belonging to or shared between two or more people, done together, done with someone else ร่วม, ที่ร่วมกัน ความร่วมมือกัน
joint investment - an investment by two or more companies

exporting the rice in commodity form - exporting the rice without processing or milling the rice (and thereby adding value to the rice)

Most paddy is sold to be processed in Vietnam for exports and Mr Wanlop said the joint investment could help Cambodia earn more than exporting the rice in commodity form.

varieties - different kinds of something
ready-to-eat varieties - kinds of a product that you can eat quickly (microwave meals, for example)
cater - give people what they want
cater to the local market - create some product or service for the local market

STC has added ready-to-eat varieties in retort pouches to cater to the local market.

development - something that happens in a long series of connected and inter-related events
win-win - a situation in which everyone wins (no losers)

expertise - a high level of knowledge or skill ทักษะความรู้, ความคิดเห็นของผู้เชี่ยวชาญ special detailed knowledge of a subject ความชำนาญเฉพาะทาง
broaden - to increase the range of something ขยับขยาย

minimise - to reduce something harmful or unpleasant to the smallest amount or degree ลดจำนวนลง ลดให้เหลือน้อยที่สุด
broaden their businesses to minimise risks locally

projected - expected, forecast; the amount that experts believe (forecast) for the future
uncompetitive prices - prices that are too high (no one wants to buy at these high prices) 

dwindle - decrease
dwindling global demand - falling demand for a good around the world

The development is seen as a win-win business. While Cambodia still wants expertise in rice processing and marketing, some Thai exporters need to broaden their businesses to minimise risks locally. Thai rice exports are projected to drop sharply this year due to dwindling global demand and uncompetitive prices.

current - of the present time ปัจจุบัน
current rice-pledging programme - the system being used by the government now to make sure rice growers receive high enough prices for the rice they grow

competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality?) การแข่งขัน
eroded competitiveness - reduced competitiveness slowly by small amounts (like water "eroding" dirt off the side of a mountain)

The Thai Rice Exporters Association also said the high paddy price offered under the current rice-pledging programme has eroded the competitiveness of Thai rice.

These factors would push down Thai rice exports this year to only 7 million tonnes, a 30% drop from 10.6 million tonnes shipped in 2011.

factor - a fact or situation which influences the result of something ปัจจัย

less demand from Indonesia and Bangladesh is a factor that causes the decline

year-on-year - a period this year compared to the same period last year

Indonesia imported more than 900,000 tonnes of rice from Thailand last year, a 230% jump year-on-year, while Bangladesh bought 736,782 tonnes, up 422% over the levels in 2011.

beneficiary - someone who gains a benefit (profit, advantage) from something
a major beneficiary of large orders

catapult - throw a long distance through the air (example: the gigantic rock was catapulted over the walls of the city by the attacking soldiers)
rankings - a list with the best first and the worst last
catapulting it to the top spot in the rankings

STC was a major beneficiary of the large orders from the two countries, catapulting it to the top spot in the exporters' rankings in 2011, with a total of 2.02 million tonnes shipped, or 19% of the 10.6 million tonnes the country exported last year.

bonanza - a situation in which you quickly become rich and successful

such a bonanza is unlikely to repeat his year as production in Indonesia and Bangladesh is rising, resulting in smaller imports

forecasts - what experts say will happen in the future คาดการณ์

The Food Agriculture Organisation forecasts the 2012 world rice output will rise 2.46% from last year to 461.44 million tonnes of paddy. Production from Indonesia and Bangladesh would increase by 5% and 2% to 37 million and 34 million tonnes of paddy respectively.

trade - the buying and selling of goods การค้าขาย
world rice trade - the buying and selling of rice all over the world
expected - believe will happen คาดว่า (จะเกิดขึ้น)

Consequently, world rice trade this year is expected at 32.8 million tonnes, down from 34.5 million tonnes in 2011.

condition - situation
performance - how well or badly something works (or whether an investment provides a reasonable return)

Whether India would continue to export after completing sales of two million tonnes in the first quarter of this year is a condition that will affect the performance of Thai rice exports, he said.

premium - special features or service that you pay extra for

India offered low selling prices at an average of US$433 a tonne for 5%-grade white rice, compared with $533 a tonne of Thai rice. India's 5%-grade parboiled rice was sold at $450 a tonne, about $100 lower than of the premium grade of Thai parboiled rice. 

chance - what happens when you don't control events (example: gambling = games of chance)
bullish - belief that the stock market or the economy or some other market is going to get better in the near future

But there is a chance to see bullish trade in the first half this year, driven by possible large orders from Nigeria, Thailand's biggest rice buyer which bought 1.54 million tonnes of rice in 2011. 

levy - tax
levy on rice imports - a tax on rice imports into a country
trigger - causing a sudden change
rush - to move or do something very quickly รีบเร่ง, วิ่ง
import - to buy or bring in products from another country นำเข้า
commodity - a product bought in large amounts such as oil, corn or rice (with every unit of the commodity the same quality and having the same price)

According to Mr Wanlop, the Nigerian government will likely increase the levy on rice imports in July, triggering a rush to import the commodity in the first half.

improvement - when something gets better or when you make it better การปรับปรุง, การทำให้ดีขึ้น
facilities - special purpose equipment and buildings; the buildings, equipment and services provided for a particular purpose (for example, athletics facilities) สิ่งอำนวยความสะดวก สถานที่และสิ่งอำนวยความสะดวก
rice-processing facilities

Besides expanding business to neighbouring country, STC has planned to complete the 500-million-baht improvement of its two rice-processing facilities in Ayutthaya and Samut Prakan provinces this year. 

enable - to make someone able to do something, or to make something possible ทำให้เป็นไปได้
maintain - to keep รักษา

share (verb) - to have or use something at the same time as someone else ใช้ร่วมกัน
share (noun) - the part of some whole that you have (others have the rest)

market share - the percentage of sales in a market that a company has
maintain market share - keep the same percentage of sales in a market (not lose it to other companies)

a 18-19% share in the country's exports
maintain a 18-19% share in the country's exports

retail - to sell directly to the public for their own use ขายปลีก
pouch - a small bag
organic food - food produced without chemicals (or very little chemicals) (See Wikipedia)

The project would enable the group to maintain a 18-19% share in the country's exports. Besides, it will focus more on retail sales by adding ready-to-eat rice products in retort pouches after its fragrant and organic rice products received a good market response, with about 40,000 tonnes in local sales