India-based Saba Industries Group, a major manufacturer and exporter of rice and other commodities in the region, plans to invest $100 million in Southeast Asia’s rice industry, aiming to become one of the largest producers and exporters in the region.
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According to a press release earlier this month, Saba Industries will buy outdated and abandoned rice mills in Vietnam, Cambodia, Laos and Thailand to convert them into storage facilities equipped with bio-energy rice dryers that can help combat the effects of climate change.
Saba’s stated goals are to help modernise the agricultural sector in Southeast Asia, promote organic rice farming and improve farmers’ quality of life. The announced $100 million investment will be made over a two-year period.
The Indian company will also buy farmers’ rice paddies and supply farmers with equipment, seeds and organic fertilizer free of charge.
“This is a much needed change from the centuries-old practice of farmers being forced to purchase everything necessary to farm, leaving them with mounting debt and perpetuating the cycle of poverty,” Saba said, adding that they will also train farmers in organic farming techniques.
Malini Saba told Khmer Times that there simply aren’t enough rice dryers in Cambodia to handle the country’s entire output.
She said the Kingdom harvests 7.5 million tonnes of rice every year, but that only about 2 million tonnes are dried and processed in the country. The remaining rice is sent to Thailand and Vietnam for processing.
“Much more rice can be processed inside Cambodia,” she said.
“In Cambodia, our plan is to buy old rice mills and make them into storage facilities with bio-energy dryers, which will also help combat the effects of climate change. We are now in the process of identifying the mills that can be a good fit for the project.”
Golden Grain Rice, a subsidiary of Saba Industries, will process the rice and distribute it to wholesalers throughout Southeast Asia and parts of Africa and the Middle East.
Song Saran, president of Amru Rice, welcomed Saba’s plans for the local agriculture sector.
“We support their investment and their plans to help poor rice millers and farmers,” he said. “I think their idea has huge potential and we wish them the best.”
Amru, which works under contract farming schemes with farmers that employ organic techniques, exported 40,000 tonnes of rice last year, and expects to reach 60,000 in 2018. By 2020, the company aims to be exporting 100,000.
Saba’s philanthropic arm, Saba Family Foundations, also plans to build and operate schools and health clinics in farming communities throughout Southeast Asia that have no access to basic education and healthcare services.
In 2017, Cambodia produced about 10 million tonnes of paddy rice and had a four million tonne surplus. Exports of milled rice amounted to 635,679 tonnes, an increase of 17.3 percent compared to 2016.