14 January 08
It is indeed my great pleasure to return to this site after my presence on January 26, 2006. This time we inaugurate a new factory to put into official cement production in Cambodia. HE Suy Sem, Minister of Industry, Mines and Energy already mentioned in his report that this achievement has come into existence thanks to joint venture between the Siam Cement Group, the biggest cement production group from the Kingdom of Thailand, and the Khaou Chuly Group from the Kingdom of Cambodia.
The construction costs about 93 million US dollars with its initial production of 960,000 tons annually with a 21 megawatt electric power station. I would say that we have made the cake right at the time that we all need to eat. I mean 29 years after the fall of the Pol Pot's genocide, Cambodia has for the first time produced cement by itself or after the trial priod of cement production under the time of Sangkumreast Niyum - Chakrey Ting - under the leadership of Samdech Preah Karun Preah Bat Norodom Sihanouk.
We did produce for quite a while the P-400 high quality cement, but the production did not make any profit. When HE Som Chen was the Governor of Kampot, I also came to see the factory at Chakrey Ting. We flew the Soviet experts to conduct a feasibility study. They said that if we were to produce 50,000 tons of cement, it would cost us also 50,000 tons of oil. So we decided to import cement from South Korea instead to Cambodia because to produce cement using the outdated setup and technology is unprofitable and unaffordable.
We now have set up a new factory on a new location and as I said earlier we could bring the production to 960,000 tons per year or about 40% of local demand, which has been estimated to be about 2.4 million tons per annum.
This achievement is not only something new for the people only in Kampot province but also for the Royal Government and people of Cambodia throughout the country as well. It is indeed a private investment. In this world, except a few countries that are left with state ownerships, for most of the countries the private sector has a role to play as a locomotive for economic growth or the sector that produces according to demand of the consumers.
Demand for construction materials in our country has gone bigger and perhaps 2.4 million tons of cement would be deficient, because take for instance the construction of CamkoCity project would need a lot of cement and we are bracing for 42 and 55 storey skyscrapers in addition to our people's needs for housing construction, etc. I would like to take this solemn occasion to express my sincere appreciation for the K-Cement Company that is making great efforts to put into place a fruitful achievement as such along the line of the Royal Government's triangular through to rectangular policy/strategies while placing high urgent need for socio-economic development where the private sector is taking the lead in the country's economic growth.
I also take this opportune moment to express my sincere appreciation to the Kampot province authority as well as the districts' authorities that are adjacent to the factory - Banteay Meas and Dang Tung districts with communes under their administrative supervision. I do not know if you agree with me but I have the vision that Kampot is the province where it is known for three products, along the line of one village one product concept. Firstly Kampot is the only province in the Kingdom that salt is produced. Thanks to the understanding of the Republic of Korea we will be able to renovate the national road 3 from Kampot to Phnom Penh and I will be coming again in March for that matter.
Secondly, Kampot is now making itself known as the only province in the Kingdom to produce cement (K-Cemnet or Kampot Cement) and we will have another factory by the Thai Boon Rong Group and the Chakrei Ting Group that produce cement also in the future. It is not appropriate to understand that where there is natural rock, we can produce cement at all. In Cambodia, some rock is not even durable for building road because of its premature level. In some other places we have rock that can be used for different purposes but they have been placed under protective zone because of their close relation to the country's history. Most of the rock mountain that can be used for producing cement lies in the province of Kampot.
Thirdly, we will soon have electricity in the area of Phnom (mountains of) Kamchai. This product can also be exported to other province, especially its 193 MW could support demand for electricity in the whole city of Phnom Penh. It is in this remark that I see that Kopmpot will be a province of three major products - salt, cement and electricity.
Indeed what also caught my attention is the fact that the factory will be providing some 520 jobs among which 170 are going to be those students graduated from the university and specialized training institutions and 350 others will be our people in general. It is important for us to start redressing the trade imbalance in anyway we can or we will face this situation that we depend solely on imports. Having done so we could, if the amount of production (of cement) exceeds the amount needed locally, export the rest to foreign market, while creating jobs for our graduates and people.
Some people make so and so complaints but they should know that building a factory to produce cement is not a complete task within one or two days but more than two years already. And we have just started the first stage of production and we will have to wait and see the second stage that requires follow-up investment of another 100 million US dollars so as to upgrade the production system to increase the production to over two million tons of cement per annum. By then we will be able to address about 70% of the country's requirement of cement. But if at that time our need for cement rises to five million tons, the expected increase will be addressing only 30% of local demand.
We have reduced the use of woods in construction therefore we have increase demand for cement. Talking about this why it is under my leadership to have some of the naturally-defunct lakes filled is wrong. The place where my house in Phnom Penh is located is formerly a lake called Boeung Raing. It was filled so as to build a city. Take another example the area where we now build the new National Assembly building, it was before a river shore where HE Chea Soth and Samdech Moha Akka Punnhea Chakrei Heng Samrin caught fishes and grew vegetables.
However, in some other places if development is not in accordance with the general environmental norm, take for instance the Long Chheng Group's building in the water reservoir of Ta Mork, which blocked the water way, we would not allow either. While some reservoirs or other forms of natural recollection system of water are not causing obstacle or damage to the ecosystem and there is a need for drainage to be built, we will have to make a decision on that.
Coming back to the cement factory here, aside from the jobs created for those who will have to perform duties inside the factory, it also provides sideline jobs for people involved in cement business. I would urge that attention must be paid to transportation of cement too, as overload and overweight vehicle will cause damages to our roads. We will not be able to make profit to mend those damages. We cannot afford to gain from cement but to lose on damaging roads.
It is indeed true that we are making local production so as to reduce imports but we must think about quality and guarantee affordable price. We cannot, in the market economic system and globalization and as a member of the World Trade Organization, ban imports from other countries in protection of local production and I hope we all understand this well. You cannot later on come to the Government and say look my factory is to fall down because of external competition. Quality and affordable price will be a push in local market. If you fail to guarantee quality, no one will buy your product. If you give similar quality to those imported from other countries, the market will not be good either because customers will buy those imported cement instead.
We will guarantee that there will be a fair competition in our market. The local authority and other related institutions will have to prevent the tax evasion of cement especially, and all other items in general. The price of tax evaded cement could be lower to a level the local production would not be competitive anymore. Loss from tax evasion, especially in this case would on the one hand lead to loss of tax income and on the other killing local production. You may need to remember that.
I would also remind the company that it has to maintain good relation with local authority for its activities of quarrying rocks because it is the matter of safety. Quarrying could produce strong explosion sound and scarify people. All explosives should be prepared according to the norm stipulated and seriousness must be applied in controlling and managing them since it could be a serious issue and a grave security issue for the country when it falls into the hands of terrorists.
In addition to this I would urge the factory to consider creating more jobs opportunity since we have more graduates who could be of use in this kind of operation, especially when the production system expands. I would urge prioritized demand for those students who would like to conduct their researches about the factory since it is the first of its kind in the country and it would be a plus for them to analyze the possibility of technology transfer, management, productive system, etc.
Another area that needs to be addressed is the possibility of exporting cement to outside market take for instance Guanxi's Nanning of the China where demand for cement has gone up to about six million tons while we locally need only two to three million tons. If we produce more we could look at the market in China and a thorough market study should be conducted.
Last but not least I urge you to apply the art of sharing so that people in the vicinity of the factory will have a better life. For instance I ask on my people's behalf that the K-Cement Group provide lighting to the roads, schools, hospitals and pagodas ... Thank you very much. They just said to me they agreed to do so. I would be grateful if you could do that before the Khmer New Year because our people will be enjoying the Ramvong (circling) dance.
I am so happy today that we have a new product in place and it is indeed contrary to what ill-willed politicians say that the country has gone poorer. I am sure our people can make judgment on what could be the truth because they have been able to practice religious belief while they could not do before; they have children graduated from university and make their livings for example from working in this factory while it could not be even dreamed of under the Pol Pot's genocide, etc. I am grateful to the CPP working group who help people in the district of Dang Tung and Banteay Meas and I am sure they have made more achievements that we have yet the time to officiate them.
Samdech Akka Moha Sena Padei Techo Hun Sen on that occasion offered a school building of six classrooms to the Primary School of Thmor Dob, a school building of six classrooms to the Hun Sen College of Tropaing Tranh, Dang Tung district, a school building of six classrooms for the Primary School of Prey Bantoan.
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