The Rural Development Bank (RDB) has called for the second round of rice millers’ applications for loans from the bank to build 50,000-tonne rice warehouses and 1,500-tonne silos in a bid to give mills a high capacity to store rice in the harvest season.
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The deadline of the second call will be on September 22 before screening and evaluating the applications, according to the RDB.
The second call came after only four rice millers applied in the first call which had a deadline on Friday last week.
RDB CEO Kao Thach hoped the last call would push other mills to apply for loans. He was not sure why only four rice millers sought financial support from the RDB, because the bank had tried to broadcast the announcement via the mass media.
“We decided to make a second round of calls to rice millers to apply for loans because we were afraid that in the first call, they might have missed or not received any information about the announcement,” he said.
Hun Lak, vice-president of the Cambodia Rice Federation (CRF), said the loan announcement had reached the targeted rice millers, but he said the low price in the markets meant there was not a high demand among rice millers for storage.
“Some mills are waiting for a big amount of rice orders. When there is a surge in the international price, they would need capital to expand their capacity,” Mr Lak said.
Song Saran, CEO of AMRU Rice Cambodia, one of the four companies which applied to RDB in the first round, said that the bank reciprocated to the demand of his company, which had specific plans.
RDB’s criteria were in line with plans to develop the Cambodian Agriculture Cooperative Cooperation in Kampong Thom province, which would store, process and export rice, Mr Saran said.
“We need funds to build the agriculture centre in Kampong Thom,” he said.
“Products from Preah Vihear and Siem Reap will benefit from the centre. So we see the criteria from RDB are well suited with our plans,” Mr Saran said, adding that building a huge storage capacity was costly.
“It is to expand the project over the existing one. The government’s plans have the same direction, so we can walk on the same path,” Mr Saran said.
The government through RDB has approved $30 million for loans to build rice warehouses and silos at five percent interest and repayments over ten years.
The first $15 million was disbursed in April to the Rice Bank to build a storage facility and silo in Battambang province.
Another $15 million is for building warehouses and silos in Kampong Thom, Prey Veng, and Takeo provinces. Two of these are in Kampong Thom, one is in Prey Veng, and the last is in Takeo.
The limited amount of money for building warehouses and silos has made mills seek financial support from foreign investors, according to Mr Lak.