Cashew Unit Start in Cambodia by 2025 

The Japanese companies are expected to set up cashew processing and related units in Cambodia by 2025, Uon Siloth, president of the Cashew nut Association of Cambodia, told Khmer Times.

Initially, they will be setting up two units for cashew nuts, he said. Two more factories will come up later to process byproducts of the processing of the commodity, he added.

“Once the two factories open, there will be two more,” Siloth said without sharing any further details about the projects.

Of the two factories, to be set up in the next two years, each is likely to have the capacity to process around 20,000 tons of cashew nuts per year, and the two other plants are likely to be the cashew-crushing oil unit and the industrial charcoal factory to use the crushed cashew nuts, according to the reports.

Pointing to his meeting with the Japanese company representatives and other dignitaries, the president of the Cashew nut Association of Cambodia expressed happiness over the Japanese company’s decision to invest in Cambodia to process cashew for export to the Japanese market. Of the 184.9 tons of processed cashew nuts exported to Japan from 2019 to 2022, around 126.44 tons were exported only last year.

He also expressed optimism that the new units will be a big boost to the cashew segment in Cambodia.

According to Siloth, the Japanese companies invested much time and energy in 2019 to conduct feasibility studies for setting up a cashew processing plant in Kampong Thom. But the outbreak of Covid-19 disrupted their plans and the project got stalled. Now they have returned to revive the projects, he added.

Identified as an agro-industrial crop as well as one of the 12 priority crops, the Cambodian government has been working to increase the productivity and competitiveness of cashew through economic diversification.

Japanese Companies Cashew Plant Projects

The national cashew policy draft, which was approved last month, aims at improving productivity and quality, promoting industrialization to increase value addition, processing 25 percent of domestically produced cashew by 2027 and as much as 50 percent by 2032, and promoting its export through market diversification.

After a meeting this month with representatives of Top Planning Japan Co Ltd and its Director General, Minister of Agriculture, Forestry and Fisheries (MAFF) Dith Tina said, “I welcome and encourage the investment of Japanese companies in Cambodia, which have been processing cashew nuts for export to the Japanese market, as well as plans to build a large factory in Cambodia to bring Cambodian cashews to the world market, both cashew nut products and cashew shells turned into fuel.”

Domestic processing of cashew will also translate into better returns for cashew farmers as well as reduce dependence on Vietnam.

Of the 670,000 tons of raw cashew nuts worth $1.07 billion exported last year, Vietnam accounted for 660,000 tons. For the 2023 season, two Vietnamese companies have already placed orders for 70,000 tons of cashew nuts.

According to the Cashew nut Association of Cambodia, Vietnam imports mostly wet nuts from the Kingdom, which are cheaper than fresh cashew. Vietnamese traders buy and dry wet cashew nuts and separate good and lower-quality nuts. While the good quality nuts are sold to processing plants, not-so-good cashew is sent for crushing to oil mills.

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At present, Siloth said domestic cashew units are small and can’t make large purchases. Referring to a study, he said cashew nuts processed locally turn out to be more expensive than Vietnamese products. Vietnamese companies have many advantages, like a skilled workforce, new machinery, cheap water, electricity, and logistics. Also, they import duty-free raw materials under special tariffs for the agricultural industry, he added.

Because of all these reasons “the price of processed cashew nuts comes out higher in Cambodia than in Vietnam,” he said and added that makes it
difficult to compete and sell. While the price of dried seeds is 4,300-6,800 riels per kilogram, the processed cashew fetches 30,000- 42,000 riels per kilogram, he remarked.

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