Post on 06-Jul-2020
Cambodia Export Diversification
And Expansion Program – Milled Rice
Annual Technical Report January – December 2014
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ABBREVIATIONS AfD CDP/CIP CEDEP CG CMA CRF COrAA EIF EU FAM FCRE F&V G-PSF GHP GMP HACCP IFC ICS MAFF MEF MIH MoC MSME NAC NBC NPSL OM PPHM RDB RSF SECC SIAL SIArb SMEs SNEC UNOPS WTO
Agence Française de Développement Community Development and Community Investment Plans Cambodia Export Diversification and Expansion Program Corporate Governance Collateral Management Agreement Cambodian Rice Federation Cambodia Organic Agriculture Association Enhanced Integrated Framework European Union Farmer Association Management Federation of Cambodian Rice Exporters Fruit & Vegetable Government-Private Sector Forum Good Hygiene Practices Good Manufacturing Practices Hazard Analysis and Critical Control Points International Finance Corporation Internal Control Systems Ministry of Agriculture, Forestry and Fisheries Ministry of Economics and Finance Ministry of Industry and Handicraft Ministry of Commerce Micro, Small and Medium Enterprises National Arbitration Center National Bank of Cambodia National Payment System Law Organic Methods Post-harvest Methods Rural Development Bank Risk Share Facility Securities and Exchange Commission of Cambodia Salon International de l’Alimentation Singapore Institute of Arbitrators Small and Medium Enterprises Supreme National Economic Council United Nations Office for Project Services World Trade Organization
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1. INTRODUCTION
Since 2008, the International Finance Corporation (IFC) has supported small and medium enterprises (SMEs) in Cambodia’s rural areas, especially those in the emerging rice sector. Cambodia’s agri SMEs are unable to realize their potential for a number of reasons, including an uncertain business environment, limited access to finance, and inefficient supply chains. The IFC Agro SME Program, largely funded by the EU, aimed to address these issues through an integrated approach utilizing IFC’s multiple business lines to create stronger and more resilient rural industries. In 2012, the United Nations Office for Project Services (UNOPS) and IFC agreed to implement the ‘Cambodia Export Diversification and Expansion Program – Milled Rice’ (also known as ‘CEDEP 1’). UNOPS is serving as the Trust Fund Manager (TFM) for the Enhanced Integrated Framework of the World Trade Organization (EIF/WTO), which funds CEDEP 1. IFC agreed to implement the ‘Milled Rice’ component of CEDEP 1, and is the Main Implementing Entity (MIE) for this component. In January 2013, IFC received the first financial contribution from UNOPS and commenced CEDEP 1 activities. CEDEP 1 support to strengthen and diversify export supply capacity for milled rice is an integral part of IFC’s overall effort to help the Cambodian rice sector become more competitive and export more high quality milled rice. This additional funding enables IFC to expand its interventions on rice export promotion that contribute to the government’s goal of exporting one million tons of milled rice by 2015. This report covers the January – December 2014 period. It covers the rice export and food safety interventions implemented by IFC, as per the Administration Agreement between UNOPS and IFC. The report describes the main project activities and key results as well as the difficulties encountered during implementation and measures taken to overcome them. The Progress Update table in Annex 1 shows the results as of December 31, 2014, based on the agreed-upon project logical framework between EIF/UNOPS and IFC. Annex 2 provides the funding status as of December 31, 2014. Annex 3 describes the Work Plan for CEDEP 1 Milled Rice.
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2. SUMMARY OF OPERATIONS
IFC continued to implement the CEDEP 1 Milled Rice project as per its updated Work Plan, which was approved during the last Annual Technical Report covering calendar year 2013. As agreed with EIF-UNOPS, in terms of governance, IFC’s existing annual Program Steering Committee (PSC) continued to serve as the mechanism for reviewing the program’s progress and endorsing strategic recommendations. Representatives of the EIF/CEDEP 1 National Implementation Unit (NIU) at the Ministry of Commerce (MOC) attended the last PSC, held in January 2014 at the Ministry of Industry and Handicrafts (MIH) and chaired by the senior minister of MIH, HE Cham Prasidh. IFC continued to work closely with EIF/CEDEP 1 colleagues at the Ministry of Commerce (EIF/MoC Program Manager and DICO/MoC Director) to set up the Core Team for the Milled Rice Component of CEDEP 1. There are now five Core Team members for the Rice Component; two come from MIH, one from GDA/MAFF (General Department of Agriculture within the Ministry of Agriculture, Forestry and Fisheries) and the remaining two Core Team Members are from MoC. During this reporting period, the Core Team members attended several meetings and project events, including the THAIFEX Food Fair in May 2014 in Bangkok, the dissemination workshop on final findings and recommendations from the International Rice Market Studies, the Second Cambodian Rice Festival, and the TRT’s World Rice Conference. The Mid-Term Evaluation, commissioned by MoC and finalized late November 2014, was positive on the results achieved under CEDEP 1 program (see details of MT Evaluation on page 8 of this report) and also recommended that the milled rice component work be extended for a year to address the sustainability challenges of the sector’s recent success, strengthen the capacity of the newly established Cambodian Rice Federation (CRF) and realize the full potential impact from CEDEP 1 project implementation. Following the evaluation, recent guidance from the EIF Secretariat is that the project be extended by 6 months to December 31, 2015 on a no-cost extension basis. The project is in its final year of operations, as per IFC’s Administration Agreement with the United Nations Office for Project Services (UNOPS), signed on December 14, 2012. As recommended by UNOPS/EIF, IFC is working with MoC/EIF team on this 6 month extension, which will focus on CRF capacity building and continued support to the Cambodian rice sector to strengthen and diversify high quality rice exports.
In terms of sector development, the Cambodian rice export industry has been under price pressure over the past six months due to the collapse of Thailand’s Rice Pledging Scheme. This collapse has resulted in large volumes of Thai rice penetrating the world market. Despite the pressure, Cambodia still exported roughly the same volume of milled rice as it did in 2013; total volume of national rice exports from January to December 2014 was 387,061 metric tons (approximate monetary value: US$ 270,942,700), of which 50% was Cambodian fragrant rice.
At the project level, IFC has been able to convince The Rice Trader (TRT) to organize its Annual World Rice Conference in Cambodia with the participation of more than 600 rice traders and buyers from around the world, including 76 Cambodia rice exporters and export-ready millers. In conjunction, IFC provided technical support to the CRF and Cambodian rice exporters. IFC is pleased to report that Cambodia won the World’s Best Rice Award for the third time in a row. In addition, IFC’s support to Cambodia’s rice export promotion efforts contributed significantly to rice export volume growth. Based on the bi-annual survey conducted among project clients to determine ‘directly facilitated exports’, the project facilitated US$37,604,939 of rice exports over the January-December 2014
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period (with fragrant rice accounting for more than half of the facilitated exports). This brings the value of the project’s total export facilitation efforts to US$ 74,120,423 of rice exports as of December 31, 2014. Further efforts to extend Cambodia’s rice export progress included the team supporting two trade missions to the US and EU, both of which are viewed as key potential markets for Cambodia’s fragrant rice. Further project highlights during the period included:
• Six of the Project’s Food Safety clients received their HACCP-certifications by International Certification bodies (TUV Rheinland and Bureau Veritas). The value of HACCP certification was further confirmed by a project monitoring and evaluation survey that found 92% of rice mills reporting improved access to international markets and 83% reporting improved performance and productivity as a result of their HACCP implementation and certification successes.
• After ten months of project support for Occupational Health and Safety (OHS), project client BRICo reached Stage 2 Audit and is ready for third party certification.
• Working closely with CARDI and client rice exporters, the project has facilitated DNA fingerprint analysis of one fragrant rice variety (Sen Kra Ob) to validate its varietal uniqueness. CARDI can now help the project purify the variety in order to release it in the future.
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3. ACTIVITIES CARRIED OUT IN REPORTING PERIOD
In order to achieve the targeted outcome and impact level results, IFC carried out the following activities - all organized around the three CEDEP 1 Outcome Indicators. For more details on Impact, Outcome and Output achievements, please refer to Annex 1 and the Progress Update for the January-June 2014 period.
Outcome 1: The Enabling Environment for the Cambodian Private Sector to meet the Government’s targets for Milled Rice exports is enhanced and sustained through the creation of an Association of Rice Exporters and enhanced G-PS dialogue on Rice exports in G-PSF or other venues
Output 1: Technical working groups organized among rice millers and exporters as a precursor to establishing the association.
• Global Market Access Exco (GMA Exco): As part of the branding development and promotion strategy, IFC supported CRF in establishing the GMA Exco working group. The Exco is the third working group established by IFC for the rice sector, following the Technical Working Group on Rice Standards (2012) and the Export Promotion Working Group (2013). It is comprised of 12 members: ten from rice exporting companies, and two from CRF in advisory and coordinator roles. The first GMA Exco meeting was held in December to agree group principles, endorse the branding development and promotion strategy, and define key next steps. (Note: IFC and AFD/SNEC attended the GMA Exco meeting and contributed technical inputs, but are not members).
Output 2: Updated mapping of milled rice value chain (based on mapping in Rice Policy)
• Mapping of fragrant rice production and its market supply chain: The ToR for this mapping exercise has been approved and will be implemented in the next reporting period. The survey aims to achieve the following objectives: (1) A mapping of fragrant rice production in ten selected rice growing provinces in Cambodia, documenting land size, production volume, cropping patterns (wet and dry season varieties), irrigated and non-irrigated areas, farming techniques, sources of seed used, productivity, and potential for expansion of fragrant rice production in the future. (2) Assessment of market demand and supply chain of fragrant rice varieties from producers (farmers) to processors (rice millers), focusing on quality, price, volumes, distribution channels and key actors within the chain. (3) Recommendations for IFC sector clients on how to best enable the development and/or strengthening of the supply chains for fragrant rice.
Output 3: Creation and registration of the association
• TA for Cambodian Rice Federation (CRF): Meetings with CRF management identified priorities and areas for further IFC support. CRF requested IFC continue to focus on three technical areas: (i)creation of a business development strategy to be used by CRF; (ii) support for CRF in their delivery of IFC developed/designated products and services to members and other interested rice
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exporting companies; and (iii) technical support on branding development and promotion for Cambodian rice products.
• Rice Mill Operations & Standards training: IFC designed a training course on rice mill operations and standards based on an earlier Training Needs Assessment (TNA), and discussions with EPWG members. In response to requests from farmers and exporters, training courses in four provinces (Phnom Penh, Battambang, Kampong Cham and Siem Reap) were conducted for 72 participants from 28 rice miller/exporter enterprises. IFC also provided customized consultancy services to three individual rice mills on rice mill efficiency and performance improvement.
• Ongoing engagement with Cambodian rice exporters: IFC organized four technical meetings on the following export promotion topics: i) preparation for the participation of Cambodian rice exporters at THAIFEX 2014; ii) results of the DNA Fingerprints of Cambodian Fragrant rice; iii) participation of Cambodian rice exporters at the TRT World Conference on Rice and Grains in Panama, as well as the SIAL Paris 2014 and European and US rice market missions; and iv) preparation for the Second Cambodian Rice Festival and the TRT World Rice Conference in Phnom Penh, Cambodia. IFC invited three speakers to present key concepts related to DNA Fingerprinting and rice market trends to export clients (Dr. Werner Nader from Eurofins/Germany and Dr. Ouk Makara from CARDI, and Subra V. Vice President, TRT for Asia).
Output 4: Mechanism(s) for regular consultation between Government and Rice exporters on milled rice exports established at G-PSF and other venues
• Formal G-PS consultation: With the establishment of the CRF in May 2014, IFC, together with AFD/SNEC, held a number of consultation meetings with the CRF management team to help ensure the federation move quickly into the role of an effective public-private sector communication platform for the rice sector. CRF conducted seven consultation meetings over the course of 2014 to present qualifications and raise government and financial sector support. The CRF met with: (1) MoC to discuss export of 100,000 metric tons to China; (2) a Chinese delegation to
discuss the same 100,000 metric tons export deal; (3) the Rural Development Bank (RDB) for access to
finance for CRF members; (4) MEF to advocate that trade partner countries allow Cambodian rice to be
imported without quota; (5) MSMEs to convey sector concerns in preparation for the G-PSF; (6) MAFF
to gain support on issues such as improved seed, access to finance, logistics and infrastructure; (7) MoC
for export potential to middle east countries (i.e, Kuwait).
• Revision of Cambodian milled rice standards: As noted in the previous report, standards were approved by the Senior Minister of the Ministry of Industry and Handicraft (MIH) on April 30, 2014, and have been translated into English for wider distribution and use.
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Outcome 2: Cambodian Rice Millers are successful in identifying several new major import market opportunities (in addition to EU and Russia) and signing contracts in at least three new markets.
Output 1: Market Potential analyses and trade information developed for five new markets
• International Market Studies on Cambodian rice completed: Preliminary research on 15 of
the world’s major rice markets was conducted (Phase I), with six markets selected for further research and evaluation (Phase II). The countries selected for further study were China, France, the United States, Germany, Singapore, and Côte d’Ivoire. These studies provide fundamental market information for use in marketing strategies, including key barriers to the competitiveness of Cambodian rice in international markets. The six country reports were then designed to help the Cambodian rice industry and exporters understand specific markets and specific export opportunities, as well as strategic marketing options. The countries vary in size and importance within the world rice markets, but each one presents interesting long-term market opportunities for Cambodian rice exports.
CEDEP 1 Project Mid Term Evaluation (MTE), November 2014
A mid-term evaluation of CEDEP 1 was commissioned by the Ministry of Commerce (MOC) and
managed by the Department of International Cooperation (DICO) covering the 2012-2014 period
(CEDEP 1 first phase). The scope of the evaluation was to review project performance in order to
provide greater insight into the CEDEP I implementation operations and enable efficient and cost
effective project delivery and management. The mid-term evaluation also aimed to help to identify
obstacles to performance, provide justification for the 2nd phase of the project (2014-2016) and provide
information for the EIF global program level evaluation.
The main conclusion of the evaluation was that ‘the CEDEP I project is very positive in terms of results
achieved under the export market and product development for both rice and silk components. The
results show the potential of these two growing sectors in a difficult environment at national level with
high trade costs and at international level with a strong competition from the neighboring countries. The
results achieved should, thus, be praised and sustained during the second half of the project. This would
be possible only if efforts are made in building a strong institutional framework to accompany the
exporters in their export strategy and to facilitate coordination and strategic guidance at sector level’.
Relevant recommendations include the ‘time extension for a period of one (1) year for each component
in order to complete the expected results subject to satisfactory performance and availability of funds’
and ‘reinforce the coordination by setting up regular meetings between MIEs in order to discuss
progress achieved and issues that could arise during the project implementation’. Specific
recommendations for IFC include that the milled rice component work needs to continue with one year
to address the sustainability challenges of the sector’s recent success, strengthen the capacity of the
newly established Cambodian Rice Federation (CRF) and realize the full potential impact from CEDEP
1 project implementation.
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• First dissemination workshop on the results from Phase I of the International Market Studies organized: IFC, in partnership with AFD and FCRE, organized the first workshop in February to disseminate results from the Phase I market studies. The workshop provided (a) a quantitative context for the forthcoming detailed work in the six aforementioned countries, and (b) a rationale for the selection of those countries from a “long list” of 15 countries. In addition, it was the platform for rice industry to provide comments in the selection of 6 countries to be studied and engage in the whole exercise.
• Second dissemination workshop on the final findings and recommendations from the International Market Studies organized: IFC, again in partnership with AFD and the newly established CRF (successor to FCRE), organized the second workshop in early September to disseminate final findings and discuss recommendations from the market studies. The workshop was attended by more than 100 participants, including exporters, ready-export millers, representative from EU and EIF/MoC, Core Team for Milled Rice Component, and other relevant stakeholders. Discussion centered on the fact that the countries vary significantly in market size and maturity, customer profile and preference, processing standards and quota or other commercial restrictions/agreements. As such, the strategies that Cambodia’s rice exporters will need to apply will also vary, and should also prompt the sector to implement capacity and quality upgrades at various stages along the supply chain. In addition to both, specific country and grouped market strategies, the study further testified to the need for Cambodia rice exporters to better diversify and personalize their customer base. Exporters currently still rely overwhelmingly on the EU and its preferential duty arrangement, with 62 percent of all exports destined for Europe. This policy advantage should be viewed as a finite opportunity to make inroads to growing product reputation and market share. Exporters should not under-appreciate the value of establishing personal contacts – as the study noted, importers from the EU, Singapore, and China all indicated a need for exporters to personally contact importers – many of whom are from multi-generational family-run businesses where personal relationships and trust are critical. Additionally, the study underlined the integral role government-backed trade delegations have to play in helping exporters obtain support from both the Cambodian government and the host countries. Representatives from the ministries as well as the Cambodian Rice Federation are important as advocates who can address their counterparts in new markets. The Federation in particular needs to be an important unifying force for the sector, particularly when developing market approaches. Given the recent progress in sector organization, productivity, and quality yield, and the accolades (including being awarded World’s Best Rice at the World Rice Conference the past three consecutive years) that have accompanied these gains, Cambodian rice is well-placed to meet the aforementioned expectations of international importers. It is time for exporters and sector representatives to visit new markets, initiate trial shipments, and establish valued relationships. In order to maximize the chances for success, the sector should first have established a clear identity (i.e., a brand). Cambodia should develop a unique fragrant/high-quality rice product name, mark of certification, and consider the creation of a protected geographical indication (PGI) for specific, limited regions in the country. Cambodian millers should also work hard to develop quality and lower costs. Mills should have farmers under contract to provide consistent rice quality and aim for near 100 percent capacity utilization at the mill. It is clear that ensuring high quality and reliable supply form the basis for increased trade.
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As Cambodia is essentially a price-taker in the global marketplace, it will also be important to ensure processing costs are minimized and exporters are able to provide quality business services to their customers. Quality services and reliable product will serve the industry better over time than aggressive pricing, which should be viewed as a short-term element in a market penetration strategy. Furthermore, Cambodia’s fragrant rice is a high quality product that should not be sold on a price basis but rather on the basis of brand and value in a differentiated market.
Output 2: Manual on export procedures/trade facilitation issues for milled rice produced
• As reported in the last report, the update of the Export Manual for milled rice has been completed, with feedback and comments from key exporters and government agencies incorporated. It has been distributed to exporters and ready-export millers. Trade facilitation issues are now the jurisdiction of the CRF and their Global Market Access ExCo working group. At the time of publication, the CRF and the working group were working with the MoC to identify future strategies.
Output 3: Manual on SPS standards and certification requirements for milled rice produced
• Manual on Food Safety developed and distributed: In addition to three Food Safety manuals (ISO 22000, GMP, and HACCP manuals) and an Occupational, Health and Safety (OHS) manual developed during the previous reporting period, the project developed and distributed Food Safety and Occupational, Health and Safety (OHS) flyers to rice millers/exporters.
• Food Safety curriculum updated for local educational centers: To address the lack of consultants able to provide rice mills with food safety-related advisory services, IFC supported Battambang University (BBU), the Kampong Cham National School of Agriculture, and the Royal University of Agriculture (RUA) in revising their outdated food safety curricula to better reflect the needs of the agro processing industry in general and the rice sector in particular. To this end, IFC developed training curricula and conducted a training course on GMP/HACCP for 52 participants (lecturers and graduate students) from the University of Battambang. The curricula were adopted and integrated in the University’s regular coursework (Agri Quality Assurance Course, Course # FPR3307, Department of Horticulture, Animal Science and Food Processing, University of Battambang). This should help ensure a sustainable core of graduates specialized in food safety that can be directly involved in food safety consultancy services.
• IFC will provide an ISO 22000 Training of Trainers (TOT) to the three universities mentioned above based on the revised curricula. Details on this will be available in the next reporting period.
Output 4: Cambodian Rice Portfolio Catalogue developed and published
The portfolio catalogue of Cambodian milled rice was updated and published in the ‘Exporters Compendium 2014’, promotional Cambodian rice sector folders, the booklet of Cambodian milled rice standards, and the end-consumer promotional leaflet. All have been used by rice exporters in international trade fairs such as THAIFEX in 2014, US Rice Market Mission, World Conference on
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Rice and Grain, EU Rice Market Mission, SIAL Paris 2014, the Second Cambodian Rice Festival and TRT’s World Rice Conference in Phnom Penh. IFC is now working with CRF to update the catalogue to include additional information, such as winning the World’s Best Rice Award for the third year in a row.
Output 5: Three new potential markets visited by groups of export-ready and exporting rice millers
Based on the International Market Studies on Cambodian rice as mentioned in Output 1 above, IFC facilitated two trade missions for Cambodian rice exporters:
• US Rice Market Mission: IFC successfully managed an August trade mission to the US for a group of Cambodian rice exporters. The mission visited Boston/Lowell, New York, New Jersey, San Francisco, Los Angeles/Long Beach. Exporters were able to meet with major buyers, Cambodian business community representatives, and honorary consuls. They also visited stores and supermarkets including Kam Man Foods, New BCN Trading, Well Luck, Specialty Food Association, Alter Eco Americas, Trader's Joe, Restaurant Depot, COSTCO, Lotus Foods (conference call) and Otis McAllister. In addition, in Los Angeles, the team met with the L.A. Port Authority, Walong marketing Inc., and IFC International Inc. The mission team compiled a wealth of fundamental market and marketing research. Lessons learned from the visits included:
o Buyers and their customers want to establish trust in both supplier and product quality. o Even the biggest buyers are keen on specialty features/unique branding that help the rice
sell. o Branding goes far beyond establishing a brand name. The classification 'Jasmine rice’ is
good for overall positioning but then the identity should also be uniquely Cambodian. Therefore the branding should play on all the positives that Cambodia has or represents, without being excessively historical or nostalgic; terms like ‘heirloom' and ‘tradition’ are good, but so are ‘progress’ and ‘modernity’.
o Aspects of social responsibility in demand are: caring about farmer benefits, sustainable agriculture, responsible sourcing.
o Certification standards of highest relevance are: a) high purity, b) specifications compliance, c) food safety, d) organic, e) fair trade, f) governmental and other institutional certifications (seals), g) USDA certifications, h) the Global Food Safety Initiative certification, i) Corporate Social Responsibility, j) code of conduct/ethics, k) respect for labor l) kosher/halal, m) ‘green and clean’: free of heavy metals, pesticides etc. n) no GMO, o) low glycemic index.
o Providers must display high ethical standards and credibility. They must deliver what they advertise or submitted as sample. They must be reliable and timely in their delivery.
• EU Rice Market Mission: The EU market mission in October entailed meetings with prospective corporate buyers and store visits in Germany, Belgium, the Netherlands, and France. It also included the participation (a booth exhibition) in SIAL, Paris. The most informative meetings with individual companies at their locations (as opposed to the many contacts at SIAL) took place with MARS (Belgium), Davert (Germany), Eurofins Lab and Eurobasmati (Germany), Alesie, Fair Trade Original, Van Sillevoldt Rijst (all in Holland). The fundamental values of the European buyers are the same as in US, however, the mission learned important aspects which may be particularly
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European traits and should be applied to the global marketing strategy and eventually the brand promotion of Cambodian premium Jasmine rice, such as:
o Targeted buyers of Cambodian Jasmine rice are processors, not mere traders. o Beyond the trust requirements, the image of suppliers in regard to compliance with
ethical, responsible and sustainable sourcing is critical to many. The team obtained detailed information on these requirements and how buyers audit suppliers.
o Most, if not all companies are interested in specialty rice, whether this is based on cultivation (organic, in EU called ‘bio’), sustainable agriculture, or processing such as brown rice, parboiled rice and ‘minute’ rice.
o Several buyers visit the source country and bring along selected customers. o Interestingly, Eurobasmati, Germany, for instance is a channel for Cambodian rice to
Iran/Iraq. This demonstrates the importance of joint collaborations with target buyers that go beyond trading.
o One company challenged the mission team on the formulation of a Unique Selling Proposition (USP). This is the key difference between commodity trading via price only and actual marketing that responds to customer and consumer needs (value addition).
• The following were findings similar to those in the USA:
o Food Safety and Quality Safety certifications are a ’must’ and not promotable competitive features; HACCP is standard but EU buyers want more such as ISO 22000, BRC, IFS.
o The key fields of consumer preferences can be grouped as follows: pleasure (‘feel-good’, curious/exotic, taste varieties), health (including cultural/religious considerations such as halal/kosher), convenience (pack sizes, ease of preparation), and ethics (social, fair trade, responsible, environmental).
Output 6: Exporting rice millers participated in four key rice trade fairs and buyer-seller meetings
• Following on the First Cambodian Rice Festival in Siem Reap in 2013, IFC helped organize a “Cambodia: World Best Rice Cuisine” event to promote Cambodian rice among foreign ambassadors in Cambodia. Co-hosted by the Cambodian Hotel Association (CHA), Cambodia Chef Federation (CCF), and Thalias Group, the event was presided over by the Senior Minister of Commerce and the Minister of Tourism.
• Successful participation in THAIFEX 2014: IFC provided technical support to 23 rice exporting companies (46 participants) to promote Cambodian rice products for the third consecutive year at the THAIFEX ‘World Food of Asia’ in May in Bangkok. IFC manned the “Cambodia Rice Pavilion”, developed promotional materials, and introduced Cambodia's newly developed Rice Standards. It was an excellent opportunity for the exporters to promote their products and network with existing and potential buyers.
• Successful participation in World Conference on Rice and Grain: Given the trend of South American buyers to diversify their suppliers, IFC provided technical support and facilitation to a group of five rice exporting companies to promote Cambodian rice products at the World Rice Conference in Panama in August. This was the first time Cambodian rice exporters attended this
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conference and promoted Cambodian rice in South America, which was considered a promotional and networking success.
• Successful participation in SIAL Paris 2014: IFC, in partnership with AFD/SNEC, the French-Cambodian Chamber of Commerce (CCFC), the Cambodian Rice Federation (CRF) and the Cambodian Chef Federation, provided technical support and facilitation to a group of rice exporting companies and export-ready millers to promote Cambodian rice products at the SIAL Paris in October. SIAL is the largest agri-food industry exhibition in the World. It gathers more than 5,000 exhibitors and registers more than 150,000 visitor entries (mainly professionals). The decision to participate in SIAL was primarily to use the exhibition as an opportunity to introduce and improve the image of Cambodian rice and to build business relationships with food industry and buyers/distributors in France, Europe and beyond. Together with IFC clients, the team manned the “Cambodia Rice booth”, developed and distributed promotional materials and introduced Cambodia's World’s Best Rice to all visitors. Senior Minister Sun Chanthol, Cambodian Ministry of Commerce together with H.E Nuth Narang, Royal Ambassador of Cambodia to France participated in the Cambodian rice cooking show at the event. Cambodian exporters also met with French businesses that could potentially be buyers or suppliers of equipment or services. Also, Cambodian rice exporters participated in “Cambodian Rice Promotion Dinner” at Le Carre Des Feuillants prepared by Chef Alain Dutournier, associated with Cambodian Chef Luu Meng, as well as the Press Conference. This specific event aimed to enhance the image of quality of Cambodian rice, expose to different media to promote Cambodian rice and pursue the building of business relationships.
• Successful organization of the second Cambodian Rice Festival: IFC, in partnership with AFD/SNEC and CRF, organized the Second Cambodian Rice Festival in Phnom Penh in November. Similar in content and design to the previous event, the festival aimed at promoting Cambodian rice among tourists and foreign residents in Cambodia. In addition, the event also aimed to raise awareness within Cambodia of the high quality and wide variety of locally grown rice. The festival also organized the second national rice competition, with the winning samples to be submitted to the “World Best Rice” competition at the annual World Rice Conference in Phnom Penh 2014. The festival brought together the many stakeholders in the industry, such as farmers, millers, exporters, and representatives from support organizations and government ministries involved in the rice sector. Approximately 1,200 people participated in this event, including 76 rice exporting millers also participated, from whom 24 submitted samples for the rice competition. The festival broadly covered by different national and international media, in total 20 representatives from newspapers, magazines and TV stations.
• Cambodia wins World’s Best Rice Award for the third consecutive year at the TRT World Rice Conference (WRC): After spending four years working with TRT to promote Cambodian rice, IFC was able to convince TRT to conduct its annual WRC conference in Cambodia. The TRT WRC is the annual gathering of rice industry professionals, with a conference agenda set out to map the future direction for rice markets, and how price trends will be shaped. This year, the conference attracted over 600 delegates from all over the world. It was a huge networking and promotion opportunity for the Cambodian rice sector, and it is therefore high
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praise for a Cambodian fragrant rice sample to have won the “World Best Rice Award 2014” in the tasting competition for the third consecutive year. This award attracted significant media coverage, and senior Cambodian government officials appreciated the joint EU, EIF and IFC program which made it possible.
Outcome 3: Cambodian Rice Millers are successful completing export contracts in the three targeted markets - by meeting quantities, quality, price requested by importers, especially with respect to fragrant rice which is developed as the leading Cambodian rice brand and meeting SPS standards requested by importers.
Output 1: Established a Cambodian fragrant rice brand for an export-quality milled fragrant rice able to compete with Thai fragrant rice and conforming to international market standards.
• IFC aided CRF in developing a branding strategy for Cambodian rice based on competitive analysis of leading global exporters, market research, and in-country missions. The strategy covers a i) definition of terms for a common understanding of what branding entails; (ii) situational analysis: review of the export (supply chain) development thus far, current status of export marketing and promotion channels; (iii) branding in three steps: Create Brand Identity, Research and build desired Brand Image, Build Brand Equity; (iv) market access requirements and customer demand and preference; (v) a road map on how to create and sustain a brand image that is attractive to target markets/customers; and (vi) considerations for the selection of a brand name. This was a critical step toward brand development and promotion of Cambodian rice. This strategy has been endorsed by CRF and key exporters, and outlines key next steps for implementation, including the establishment of Global Market Access Exco (Branding Working Group). IFC will enlist an external branding consultant to coordinate the process of branding and image campaign. The details on this exercise will be available in the next reporting period.
Output 2: Promoted the Cambodian fragrant rice brand
• Key promotional materials updated and distributed: IFC, CRF, EPWG and other exporters collaborated on an update of the existing promotional materials to reflect the recent achievements of Cambodian rice, especially the World’s Best Rice Award. Further promotional tools developed this reporting period included: (1) a “Recipe Book” in English and French developed to educate tourists on Cambodian rice; and (2) the third VDO clip highlighting the prestige of Cambodian rice for international markets. These VDO clips are available on www.youtube.com: “Cambodia, Rice Country”: https://www.youtube.com/watch?v=kCRQ_R87iso “The First Cambodian Rice Festival 2013”: https://www.youtube.com/watch?v=Cmq--UcW0rA “Cambodian Rice – White Gold”: https://www.youtube.com/watch?v=skVyULhVvqg
• In addition, the Facebook page of ‘Cambodian Rice Exporters’ has reached more than 3,701 individuals, an increase of more than 2,000 followers during this reporting period.
15
• The listing of Cambodian rice quotations: IFC technical assistance to exporters included registration of its rice price quotations at the global price index, Live Rice Index (LRI). Rice prices are publicly available and updated every week. This is expected to help promote Cambodian rice in the international market.
Output 3: 8 Rice Millers have received their HACCP certification
• On-going Food Safety Advisory Services: During this reporting period, six Food Safety clients were HACCP-certified by International Certification bodies (TUV Rheinland and Bureau Veritas). As part of project monitoring and evaluation, a survey found 92% of rice mills reported improved access to international markets and 83% reported improved performance and productivity as result of HACCP implementation and certification.
• Bi-weekly coaching and guidance to five rice mill clients to meet GHP/GMP, HACCP/ISO 22000 requirements has resulted in five having already completed the necessary documentation, audits and infrastructure improvement and now awaiting third party certification. After ten months of project support on Occupational Health and Safety (OHS), project client BRICo has reached Stage 2 Audit and is ready for a third party certification. Certification will help BRICo to differentiate itself from the rest of the Cambodian rice exporters.
• DNA fingerprint of Cambodian rice varieties established: In addition to DNA fingerprints of rice varieties adopted by rice authority CARDI reported in the previous progress report, IFC closely collaborated with CARDI and rice exporters to facilitate further DNA Fingerprint analysis on a rice variety and validate that it was different from Thai rice (Pathumthani). The results were successful, and CARDI is now looking to purify this variety and release it at later stage.
• Based on the bi-annual exporters’ survey, the project directly facilitated 284 contracts/deals (US$53,754,693) of exports of Cambodian fragrant rice to both old and new markets – this is an additional 165 contracts/deals (US$29,191,040) achieved during this reporting period.
16
4. DIFFICULTIES ENCOUNTERED AND MEASURES TAKEN/PLANNED
Cambodian rice millers and exporters are challenged by a shortage of working capital, high levels of rice stock and a decline in milled rice prices due to large volumes of Thai rice dumped on international markets. As a result, most rice millers and exporters sell their rice at a loss in order to pay debts; rice mill owners prioritize cash generation to pay debts over mill infrastructure improvement, including Food Safety related upgrades. In addition, since most rice mills are located in rural areas and salaries offered by rice mills are not competitive, it is hard to find and keep qualified personnel. As result, some rice mills may be delayed in getting HACCP or other Food Safety certifications. Mitigation: IFC will monitor project progress with particular attention to delays resulting from macroeconomic or staff related issues. Client rice mills may need to hire full-time, short-term consultants to assist with Food Safety documentation and implementation (instead of relying on staff, with the risk of losing them during the process). Efforts with rice industry had to be redirected. As reported in the last annual report, IFC spent significant time and effort to identify a rice industry association that best represented the Cambodian rice export sector, and subsequently started working with FCRE. However, the MoC initiated a merger of the three existing rice industry bodies to create the “Cambodian Rice Federation” (CRF). The CRF was formally established in May, with 15 executive board members, including a president and three vice presidents. While it is a step forward in terms of unifying the sector, it has also pushed back IFC’s rice sector support, as progress made with FCRE has to be restarted with the CRF. IFC has initiated dialogue and engagement with this new industry body to determine advisory needs and IFC’s support role until such time that they can take over roles and responsibilities from IFC in due time. Note that with FCRE an exit strategy was already under consideration. Mitigation: IFC, in coordination with AFD/SNEC, has held a number of consultation meetings with the CRF management team to better understand their needs and priorities and to identify potential areas where IFC can provide support. IFC has already started to engage with CRF concerning core project activities and will continue to work with AFD/SNEC to provide more technical support and discuss cooperation strategies. CEDEP 1 project extension period is short in duration. Although the project will most likely achieve all original targets (output/outcome/impact), the Mid-Term Evaluation commissioned in 2014 recommended that the CEDEP 1 – Milled Rice Component should be extended for one year, in order to address the sustainability challenges of the sector’s recent success, strengthen the capacity of the newly established Cambodian Rice Federation (CRF) and realize the full potential impact from CEDEP 1 project implementation (see more details on MTE report in text box on page 8). However, as pointed out earlier in this report, the EIF Secretariat agreed to only a 6-month extension of all 3 components of the CEDEP 1 Project. This poses a challenge for the IFC, as it agrees with the MTE findings that a 12-month extension is indeed needed to sustain the project’s success, especially concerning CRF’s capacity building. In addition, certain project activities implemented in 2015, such as the development of an international rice branding campaign need further support beyond the proposed extension period. Mitigation: IFC will intensify its collaboration with CRF in the agreed-upon areas of capacity building during the
17
coming months, in order to guarantee the continuation of high quality sector support by the time CEDEP 1 phases out. At the same time, IFC is discussing with different development partners (AfD, ADB, USAID and CAVAC/DFAT) in order to explore potential interest and synergies between the programs and see where other DPs can come in with CRF support. In addition, IFC is currently developing its 2016-2020 national program and is assessing ways to support the rice and other agri sectors in Cambodia, inclusive of industry association strengthening.
18
Annex 1: PROGRESS UPDATE Cambodia Export Diversification and Expansion Program - Milled Rice (December 2014)
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
Impact #1: As rice is the largest employment sector of
the Cambodian economy, development of milled rice
exports will have a positive impact on poverty
reduction, especially through income growth in many
regions of the country. Development of the sector
supports Cambodia’s efforts to meet its MDGs
• Export of milled rice increase by
100% from 2011 baseline of
approximately 140,000 MT
• National rice export
volume: 140,000
metric tons (2011).
• National rice export
value: US$
84,280,000
• 380,000 tons
• US$ 229,400,000
• 387,061 tons
• US$ 270,942,700
(Average price ~ $700/ton)
Impact #2: The competitiveness of Cambodian rice
exports is increased, resulting in better earnings of rice
millers and farmers in the milled rice supply chain, led
by its higher value fragrant rice segment.
• Value and volume of rice export
directly facilitated by the
project.
• Volume of rice
export deals
facilitated: 0 tons
• Value of rice export
deals facilitated:
US$ 0
• 81,000 tons
• US$ 48,762,000
• 105,776 tons
• US$ 74,120,423
Outcome #1: The Enabling Environment for the
Cambodian Private Sector to meet the Government’s
targets for Milled Rice exports is enhanced and
sustained through the creation of an Association of
Rice Exporters and enhanced G-PS dialogue on Rice
exports in G-PSF or other venues
• Number of
constraints/challenges
identified in Rice Policy that
have been addressed
• 0 • 4 constraints/
challenges identified
in Rice Policy
addressed
Note: As reported in the
last progress report, the
new industry called
“Cambodian Rice
Federation – CRF)
established in late May
2014 represent the
industry. IFC has discussed
with CRF and agreed that
the 4 constraints identified
previously with the former
industry body, FCRE, are
still valid. These include:
(1) Milled Rice Standards;
(2) Food Safety; (3)
Branding; and (4)
• Cambodian Milled Rice
Standards developed and
endorsed by the
government.
• Branding strategy for
Cambodian rice endorsed by
CRF.
[contributed by TA to rice
federation (output1) and support
the formal mechanism for
consultation between
Government and CRF (output4)]
19
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
Productivity and Paddy
Quality (Improved seed).
Output 1: Technical working groups organized among
rice millers and exporters as a precursor of the
association
• Number of technical working
groups formed
• Number of meetings of technical
working groups
• 0
• 0
• 1 technical working
group
• 30 meetings
• 3 technical working groups
formed with support of the
project (Rice Standard
Technical Working Group,
and Export Promotion
Working Group; Global
Market Access Exco).
• 11 meetings
Output 2: Updated mapping of milled rice value chain
(based on mapping in Rice Policy)
• Mapping published and
disseminated
• 0
• 1 report • In progress. The recruitment
of the consulting firm to
conduct this mapping
exercise is being finalized.
The firm is expected to
commence their works in
Feb, 2015.
Output 3: Functioning association created and
registered • Registration of Association
• Association website established
• Meetings of Association
organized
• 0
• 0
• 0
• 1
• 1
• 12
• Done
• Website created
• 11 rice exporter meetings
organized with support from
IFC.
Output 4: Mechanism(s) for regular consultation
between Government and Rice exporters on milled
rice exports established through G-PSF or other venue
• Formal channel for G-PS
communication identified
• Number of formal G-PS
consultations on rice
• 0
• 0
• 1
• 8 formal G-PS
consultations
• 1 (CRF)
• 12 formal G-PS consultation
on rice organized by FCRE
(meeting with Institute of
Standard of Cambodia – ISC -
to discuss and finalize the
revision of Cambodian Milled
Rice Standards, meeting with
the Tax Department on VAT
for milled rice for export;
meeting with MEF on access
to finance issues; meeting
20
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
with MoC and MEF on
transport costs on national
road #4 from PHN to SHV;
and meeting with General
Department on Customs and
Excise).
• (1) Meeting with MoC to
discuss on agreement to
export rice China; (2)
Meeting with MoC and China
delegates to discuss about
MoU to export 100,000
metric tons of Cambodian
rice to China; (3) Meeting
with RDB to discuss about
access to finance issue for
CRF members; (4) Meeting
with MEF to discuss on trade
partner countries to allow
Cambodian rice to be
imported without quota; (5)
Meeting with MSME to raise
concerns and suggestions
from rice sector for the G-
PSF; (6) Meeting with MAFF
to discuss to gain their
support on rice related issues
such as improved seed,
access to finance, logistics
and infrastructure; (7)
Meeting with MoC to discuss
about potential opportunity
to export Cambodian rice to
middle east countries, i.e
Kuwait.
21
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
Outcome# 2: Cambodian Rice Millers are successful in
identifying several new major import market
opportunities (in addition to EU and Russia) and
signing contracts in at least three new markets.
• Five new export markets (outside
EU and Russia) have been
identified and three have been
visited and explored. Export
contracts are being negotiated in
at least three of them.
• New markets
identified: 0
• New markets
procured
Cambodian rice: 0
• 5 new markets
identified.
• 3 new markets
procured Cambodian
rice.
• 7 markets identified. Besides
Israel reported previously, 6
additional markets/countries
were identified international
market studies on
Cambodian (US, China,
Singapore, Ivory Coast,
France, and Germany).
• 3 new markets procured
Cambodian rice (US, EU and
Israel)
[contributed by market
analysis from five target
markets (output1),
development and promotion
of Cambodian rice catalogue
(output4), and the
participation of rice
exporters and export-ready
millers in trade fairs,
exhibitions and other
business matching (output6)]
Output 1: Market Potential Analyses/Trade
information developed for five new markets • Five market potential analyses
prepared and disseminated
through workshops
• Road Map Pillar 2 KPI 2.3.1.b: A
minimum of two new and large
scale distribution channels to
overseas markets have been
identified
• Number of
workshops
organized to
disseminate
information about
potential markets: 0
• At least two
workshops organized.
• 2 dissemination workshops
organized. One to present
the results from phase 1 of
the market studies. And two
to present the final results
and recommendations.
Output 2: Manual on export procedures/trade
facilitation issues for milled rice produced • Manual prepared and
disseminated through workshops
• Manual on export
procedures/trade
facilitation: 0
• Dissemination
workshops: 0
• Manual on export
procedures/trade
facilitation: 1
• Dissemination
workshops: 2
The update on manual on export
procedures/trade facilitation has
completed. This is now in the
hands of CRF and their Global
Market Access ExCo. It is one
important part of their mandate
22
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
to improve the export
procedures and costs.
They are working with the MoC
on that. IFC continues providing
support to CRF on this area so
that they regularly provide
updates to all exporters.
Output 3: Manual on SPS standards and certification
requirements for milled rice produced • Manual prepared and
disseminated through workshops
• Food safety manual:
0
• Workshops/training
sessions: 0
• Food safety manual: 2
• Workshops/training
sessions: 16
• 3 Food safety (GMP, HACCP
and ISO 22000 ) manuals + 1
OHS manual developed
• 9 GMP/HACCP/ISO22000
training sessions +1 OHS
awareness training session
organized.
Output 4: Develop and publish Cambodian Rice
Portfolio Catalogue • Portfolio Catalogue published
and disseminated through
workshops
• 0
• 1 portfolio document The catalogue of Cambodian
milled rice for export was again
updated/published has used
during 2nd
Cambodian Rice
Festival and TRT’s World Rice
Conference.
Output 5: Three new potential markets have been
visited by groups of export-ready and exporting rice
millers
• Number of participants and
number of trade missions
• Number of
exporters and
export-ready millers
participated in trade
missions: 0
• Number of trade
missions: 0
• Number of exporters
and export-ready
millers participated in
trade missions: 20
• Number of trade
missions: 3
• 29 (4 for US and 25 for EU
and France)
• 2 trade missions (US and
EU/France)
Output 6: Export-ready and exporting rice millers
have participated to four key rice trade fairs and
buyer-seller meetings
• Number of participants and
number of trade fair
participations
• Road Map Pillar 2 KPI 2.3.1.c:
Rice traders and exporters
participate to trade fairs and
buyer-seller meetings
• Number of
exporters and
export-ready millers
participated in trade
fairs and key buyer-
sellers meeting: 0
• Number of trade
fair participations: 0
• Number of exporters
and export-ready
millers participated in
trade fairs and key
buyer-sellers
meetings: 30
• Number of trade fair
participations: 6
328 exporters and export-ready
millers participated in 9 trade
fairs and key buyer-sellers
meetings as per below:
• THAIFEX in May 2013: 18
exporters and export-ready
millers participated.
• First Cambodian Rice Festival
23
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
in October 2013: 800 people
participated, of which 18 rice
exporting companies, which
submitted the samples for
the first national rice taste
competition.
• TRT/WRC in Nov 2013: 43
exporters and export-ready
millers participated.
• Business Cocktail Networking
with Hong Kong Merchants
Association in Phnom Penh
in Dec 2013: 73 Cambodian
and Hong Kong
exporters/importers
participated.
• THAIFEX in May 2014: 46 (23
exporters and export-ready
millers (from 23 companies)
participated.
• World Conference on Rice
and Grain in Panama, August
18-20, 2014: 5 exporters and
export-ready millers
participated.
• SIAL Paris 2014, October 19-
23, 2014: 25 exporters and
export-ready millers
participated.
• Second Cambodian Rice
Festival, November 18 2014:
76 exporters and export-
ready millers, of which 24
rice exporting companies,
which submitted the samples
for the first national rice
taste competition.
• TRT/WRC, November 18-20
2014: 76 exporters and
24
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
export-ready millers
participated
Outcome #3: Cambodian Rice Millers are successful
completing export contracts in the three targeted
markets by meeting quantities, quality, and price
requested by importers, especially with respect to
fragrant rice which is developed as the leading
Cambodian rice brand and meeting SPS standards
requested by importers
• Increase in volume of exports to
the three new markets targeted
under project
• Number of rice millers HACCP
certified
• Road Map Pillar 2 KPI 2.3.a:
Exports to a minimum of three
new markets in two years
• Road Map Pillar 2 KPI 2.3.b:
Exports of “new products”
increase (in this case, “branded”
Cambodian fragrant)
• Number of
contracts signed to
procure Cambodian
fragrant rice in both
new and old
markets: 0
• Value of contracts
signed (procuring
Cambodian fragrant
rice) in both new
and old markets:
US$ 0
• Volume of rice
processed in
compliance to FS
standard: 0 tons
• 54 contracts signed.
• Total value of
contracts signed:
US$8,127,000
• 105,000 tons in
volume of rice
processed in
compliance to FS
standards
• 284 contracts signed.
• US$53,754,693
[contributed by the
establishment of Cambodian
fragrant rice in the import
markets (output 1), and
promotion of Cambodian
fragrant rice (output2)]
• 23,316 tons of milled rice
processed in compliance to FS
standard
[contributed by technical
improvements validated by
certification (output 3)]
Output 1: Establish a Cambodian fragrant rice brand
for an export quality type of milled fragrant rice
competing with Thai fragrant rice and responding to
expectations of import markets
• Number of media appearances.
• 0 • 30 media
appearances
• 63 media appearances
Output 2: Promote Cambodian fragrant rice brand • Number of campaigns and events
at which the brand is
prominently promoted
• 0 • 6 campaigns and
events.
Note: To align with the
international trade fair
events in output 6 of
outcome 2, the project
11 events in which Cambodian
rice has been promoted:
• THAIFEX 2013 in May
• First Cambodian Rice
Festival in October
• TRT/WRC in Nov
• “Dinner with Cambodian
25
Strategy of Interventions Key Performance Indicators Baseline Target Progress Results as of Dec 2014
plans to support (over
the project lifespan) 6
campaigns and events,
as the target for this
indicator.
Rice” with Foreign
Ambassadors in Cambodia
Jan 2014
• THAIFEX 2014 in May
• World Conference on Rice
and Grain Aug, 2014
• US Rice Market Mission,
Aug 2014
• EU Rice Market Mission,
Oct 2014
• SIAL Paris, Oct 2014
• 2nd
Cambodian Rice
Festival, Nov 2014
• TRT/WRC, Nov 2014
Output 3: 8 Rice Millers are supported to become
HACCP certified • Road Map Pillar 2 KPI
2.3.1.d:Techncial support is
provided to rice millers to meet
quality specifications and SPS
requirements
Number of rice miller
obtaining food safety
certification: 0
8 rice millers obtaining
food safety certification.
• 7 (Brico, Loran, Amru,
Khmer Food, CARMA Rice,
Hak Se and White Gold)
were HACCP certified
26
Annex 2: Cambodia Export Diversification and Expansion Program – Milled Rice Budget versus Actual Expenditures
Table 1: Funding status as of December 31, 2014 (US$)
Sources
Funding (US$)
From Inception to December 31, 2014
Committed Received (US$)
Outstanding (US$) Original
Currency US$
UNOPS USD 1,112,847 500,000 612,847
Total Gross Donor Contribution 1,112,847 500,000 612,847
Less: Administrative Fees 55,642 25,000 30,642
Total Net Donor Contribution ( A ) 1,057,205 475,000 582,205
Investment Income ( B ) 1,875
Total Source of Funding = (A+B) 476,875
Total Expenditures 144,516
TF Balance ( C ) 332,359
Burn Rate (Total Expenditure / Total Source of Funding)
15% Available Fund (Outstanding + TF Balance)
914,564
27
Table 2: Overall Program: Budget vs Actual Expenditures as of December 31, 2014 (in USD) – cost category
Cost Category Budget Actual Expenses
as of Dec 31, 2014
Overall Program Burn
Rate (%)
Staff Costs 272,394 71,337 26%
Consultants 265,500 23,400 9%
Travel 244,000 14,057 6%
Contractual Services 197,000 24,408 12%
Communication and Rent 78,311 1,295 2%
Other Expenses 0 10,019 0%
Program Spending 1,057,205 144,516 14%
IFC Administration Fee 5% of Fund 55,642 25,000 45%
Total 1,112,847 169,516 15%
28
Table 3: Budget versus Actual Expenditures as of December 31, 2014 (in USD thousands) - Cost Category
Inception to December 31, 2014 Budget FY2015
(Jul 2014-Jun 2015)
Budget Actual Expenses
Burn Rate (%)
Staff Cost 115 71 62% 162
Consultants (Inc. Temp) 171 23 14% 285
Travel 84 14 17% 124
Representation 0 0 0
Contractual Services 38 24 64% 4
Communication and IT Chargeback 8 0 5% 16
Office Rent 8 1 11% 16
Equipment/Furniture 0 0 0
Other Equipment and Building Expense
0 0 0
Other Expense 19 10 51% 5
Total Expenditures 444 145 33% 613
Note: The Rice program is multi-donor funded (EIF and EU) and given the expiration of EU funds by December 31,
2014, program spending was predominantly charged to EU funding resulting in lower burn rate against EIF
funding. Furthermore, to fully utilize the EU funding some prior period expenditures reported in the June 30, 2014
report were reposted to EU as well.
29
Annex 3: Work Plan CEDEP 1 Milled Rice Component (Indicative Project Activities) – Updated December 2014
Strategy of Intervention Year 1 Year 2 Year 3
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Preparatory Quarter:
Indicative Activities:
• Preparation of Year 1 Annual Work Plan (AWP)
• Staffing
• Formation of Component Steering Committee, including TORs
• Identification of key experts
• Consolidation of list of current or potential exporters
Outcome #1: The Enabling Environment for the Cambodian Private
Sector to meet the Government’s targets for Milled Rice exports is
enhanced and sustained through the creation of an Association of
Rice Exporters and enhanced G-PS dialogue on Rice exports in G-PSF
or other venues
Output 1: Technical working groups are organized among rice millers
and exporters as a precursor to the association
Output 2: Updated mapping of milled rice value chain (based on
mapping in Rice Policy) (to be done with stakeholders)
Output 3: Functioning association is created and registered –
Cambodian Rice Exporters Association (CREA)
Output 4: Mechanism(s) for regular consultation between
Government and Rice exporters on milled rice exports is(are)
established through G-PSF or other venue and utilized
Indicative Activities:
• Convene meetings with exporters to identify issues in areas of Trade Facilitation, Export Financing, Compliance (Quality Management), Production Technology and Rice
Supply, and the design of a Cambodian fragrant rice brand image. These meetings lead to formation of Technical Working Groups and provision of rice mill operations and
standards training courses.
• Consultation mechanisms identified and agreed among exporters and government lead agencies
• Mapping of Rice Export Value Chain (focus on trade facilitation element) is updated with exporters and rice millers
30
• Annual review/update of Value Chain
• Legal/administrative assistance to register the association
• Consultative meeting with Thai Rice Exporters Association, possibly through a country visit
• Baseline information compiled
• Cambodian Exporters Association website designed
• Leverage financial support given to the CRF through the RSSP (IFC) project collaboration with AFD/SNEC to enhance the CRF's development to make their operations
sustainable.
• Strengthen the operational capacities of the CRF and through that there appreciation by her members by facilitating/supporting the following:
• Assist the CRF to set up a services portfolio including the provision of training courses for member companies on topics that had been identified through needs analysis.
o Organisation and conduct of training courses, beginning with access to finance:
How to prepare and how to present a business plan (a loan application) to a bank. Two audiences would comprise of middle and top management.
o One interactive workshop with financial institutions and loan seekers.
• Support the creation, administration and promotion of a collective Rice Brand.
Outcome# 2 Cambodian Rice Millers are successful in identifying
several new major import market opportunities (in addition to EU
and Russia) and signing contracts in at least three new markets.
Output 1: Market Potential Analyses/Trade information developed
for five new markets
Output 2: Manual on export procedures/ trade facilitation issues for
milled rice produced
Output 3: Manual on SPS standards and certification requirements
for milled rice produced
Output 4: Develop and publish Cambodian Rice Portfolio Catalogue
Output 5: Three new potential markets have been visited by groups
of export-ready and exporting rice millers
Output 6: Export-ready and exporting rice millers have participated
to 4 key rice trade fairs and buyer-seller meetings (actual timing
depends on event calendar)
Indicative Activities:
• Create an event calendar (rice trade fairs and related fairs, national, regional, international)
• Update baseline information including list of international buyers/investors interested in Cambodian rice
• Market research on attributes of Cambodian fragrant rice (domestically, as well as perception of current international buyers)
• Update Cambodian Rice Export Potential Assessment at HS 6 level and HS 8 for aromatics
o Current markets vs. potential markets
o Trade flows, including competitors trade flows
o Market access conditions
o Nature of demand - parboiled, aromatic, organic, brown
• Workshop on market research, identification of market opportunities, and identification of sources of information and networks, including overseas Government representatives
(trade information and promotion channels)
31
• Workshop with capacity training on the use of on-line Market Analysis Tools
o Select 5 new (out of the top ten) milled rice importers in the world (ITC’s trade maps)
o Analyze trade-flows and competition
• Workshops with exporters on preparing for market prospecting and participation to trade fairs, (one workshop before each mission but can be reduced to round table briefing
meetings)
• Debriefing workshops after each market visit, each participation in trade fairs
• Preparation/briefing meetings to no less than 9 (better 12 = 4x/year) Cambodian participations in trade fairs: Timing and number depends on actual event calendar
• Training workshops:
o Contracts and negotiations, international trade laws, settlement of claims, arbitration
o Export packaging and labelling, product adaptation, branding
o Costing, positioning, pricing
o Purchasing and supply management
• Manual on trade facilitation produced by TWG and translated into Khmer
• Cambodian rice product portfolio agreed upon and published by the Association’s Working Groups
• 9 Market prospecting missions to target markets (elaborated during Market Analysis work shop)
• Round table meetings with visiting international buyers/rice traders
• Assist Cambodian Rice Exporters through CRF in setting up an overseas trade promotional network involving Cambodian diplomatic missions including honorary consulates.
• Strengthen the domestic awareness i.e. the national promotion base for Cambodian premium Jasmine rice (Brand) through Cambodian Rice events (festival, dinner, tasting
competition, AEON Mall) and follow-up via billboards, posters, VDO dissemination and similar. Target: Leading restaurants mention Cambodian Jasmine rice in their menus.
Outcome #3: Cambodian Rice Millers are successful completing
export contracts in the three targeted markets by meeting quantities,
quality, and price requested by importers, especially with respect to
fragrant rice which is developed as the leading Cambodian rice brand
and meeting SPS standards requested by importers
Output 1: Establish a Cambodian fragrant rice brand for an export
quality type of milled fragrant rice competing with Thai fragrant rice
and responding to expectations of import markets
Output 2: Promote Cambodian fragrant rice brand
Output 3: 8 Rice Millers are supported to become HACCP certified
Indicative Activities:
• A promotional concept and standard flyer and poster for a Cambodian fragrant rice identity is created (note: fragrance in Cambodian perception is linked to Rumduol, Mitrella
Mesnyi, national flower)
• Recruit consultant for above to work with Association’s working group
• Poster is distributed to prominent locations in Cambodia frequented by visitors (airports, hotels, tourism offices)
• Market visits under outcome #2, outputs #5 and #6
• Promote brand through Cambodian booth at Trade fairs (rice, tourism, food, hospitality)
• Factual information on Cambodian rice and rice exporters and promotional material is disseminated to all Cambodian Embassies’ Commercial sections abroad, trade
promotion offices, tourism organisations etc.
32
• Press conferences
• Exporters adopt the Cambodian fragrant rice brand/logo and display it together with their individual brands.
• Exporters use Cambodian brand in association with their product lists and invoices
• Cambodian Rice Exporters Association (CREA) Website promotes Cambodian Rice
• CREA sets aside advertising budget for Cambodian rice
• Presentations to expose millers to new export enhancing products/technologies such as extrusion of broken rice and fortified rice (e.g. NutriRice)
• Group training on HACCP organized for selected group of rice millers
• On-site training for HACCP organized in 8 rice millers/exporters
• 8 rice millers’ application for HACCP certification and 1 rice mill application for OHS supported
• DNA fingerprint of Cambodian Rice Varieties Established
• Help Cambodian Rice Exporters (via CRF), using the collective Brand, to formulate and strategically promote their Unique Selling Proposition (USP)
• Help CRF/CRX to obtain Seals and Certificates beyond the required technical Food Safety certifications that respond to Consumer Preferences
• Build capacity of CRF to organise the participation in international trade fairs and conferences. Target: to support CRF's participation in 3 out of the following 7 events:
- World Expo Milan (01 May-31 October)
- SIAL China (Shanghai, 06-08 May) plus market mission?
- THAIFEX WoFA (Bangkok, 20-24 May)
- Fancy Food Show New York (June/July)
- ANUGA (Cologne, 10-14 October)
- TRT-WRC (location tbd, November)
- Fancy Food Show San Francisco (January 2016)
• Lobby the RCG through the CRF to embark on a Branding Cambodia campaign to enhance the image of Cambodian export products based on the image of the country of
origin (‘Made in Cambodia’)
Original Currency
US$000
UNOPS USD 1,113 500 613Total Gross Donor Contribution 1,113 500 613
Less: Administrative Fees 56 25 31Total Net Donor Contribution ( A ) 1,057 475 582Investment Income ( B ) 2 Total Source of Funding = (A+B) 477 Total Expenditures 272 TF Balance ( C ) 205 Burn Rate (Total Expenditure / Total Source of Funding) 57%
Available Fund (Outstanding + TF Balance) 787
Table 1: Funding status as of March 31, 2015 (US$)
Sources
Funding (US$000) From Inception to March 31, 2015
Committed Received (US$000)
Outstanding (US$000)
Table 2: Overall Program: Budget vs Actual Expenditures as of March 31, 2015 (in USD) – cost category
Cost Category BudgetActual Expenses
as of Mar 31, 2015
Overall Program Burn
Rate (%)Staff Costs 272,394 161,525 59%
Consultants 265,500 31,280 12%
Travel 244,000 16,805 7%
Contractual Services 197,000 27,161 14%
Communication and Rent 78,311 21,428 27%
Other Expenses 0 14,166 0%Total 1,057,205 272,365 26%
IFC Administration Fee 5% of F 55,642 25,000 45%Total 1,112,847 297,365 27%
Staff Cost 162 Consultants (Inc. Temp) 31 Travel 17 Representation 0 Contractual Services 27 Communication and IT Chargeback 6 Office Rent 15 Equipment/Furniture 0 Other Equipment and Building Expense 0 Other Expense 14 Total Expenditures 272
Inception to March 31, 2015