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# Cambodia Corn Project

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Project concept for investment in irrigated corn production in Cambodia

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• I am sure that corne prices have fallen in the last few years. Current market price is \$190 per ton. Therefore, it cannot possibly a good investment. Now, let's do the math:

Assuming yield is 6 tons (max), but not every hectare will produce 6 tons. Let's only assume the yield is only 4.5 tons per hectare. Thus, your total revenue per hectare is around \$2,565 (4.5t x 3 harvest x \$190).

Now look at the operational cost:
Seed: 150kg per hectare at \$4.5 per kg = \$675
Feritilizer: approx. 1 ton per hectare = \$550
Diesel/Fuel (tractors):\$350 -- difficult virgin soil
Disel Fuel (irrigation pumps): estimating around \$50
Labor: \$192 per hectare (avg. salary \$400 x 200 people x 12 months all divide by 5000 hectare)
Harvest: assuming fully mechanized combine, \$210 per hectare at \$70 per harvest
Transportation, collecting from field to storage: \$105 at \$35 per harvest

Total operational cost: \$2132 per hectare. The estimatation is assuming water is readily available. However, there is a need to invest in irrgation and water reseviors. That will incur additionals cost. Also, I have not mentioned about depreciation costs, repairs, mismanagement, bad crops, etc...

Hence, through all these hassles, you will make about \$500 per hectare on your investment. So for a 5000 hectare investment, you will be making \$2.5m a year. However, for this much, there are many undercertainties and the amount in the initail investment. As for the \$15m initial plan, you cannot do it with this much money. For 5000 hectare, you will need about 100 tractors, which costs around 4-5 million if you buy John Deere. You wouldn't want to buy cheap tractors. Investment in roads, irrigations, infrastrcuture. It is probably little left for the operational expenses.

In conclusion, corn is a not a good investment--unless you can put in a processing plant nearby. meanwhile, there are better opportunities in cambodia than corn. Perhaps in sugarcane?

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• Are you professional skill on this Corn and Cassava cultivation project?
If so, you could contact me for business deal
e-mail: narin@goldenvalleyofwealth.com
h/p: 016-555 082

Our company is focusing on Agriculture Investment:
Cassava, Corn, Pepper and Mango project

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• I am very happy to hear so in Cambodia for your master plan

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• Our group are still doing some study on the feasibility of Large Scale Mechanized Corn Production in the Economic Land Concession in Preah Vihear.
We are seeking for HandsOn expertise and consultant to do a detailed project and feasibility for Corn Investment in Cambodia on dry land or irrigated Land for a good return of Investment.
Our ELC comprised of 3 parcels in Preah Vihear totaling for 30,000 Ha.
Once our Master Plan and soil survey are completed we will apply from MAFF for the Approval for Land Development licence for operations to commence.

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### Cambodia Corn Project

1. 1. CAMBODIA: CORN (MAIZE) PRODUCTION PROJECT An Investment Concept
2. 2. CONCEPT <ul><li>Cambodia – Is the potential food basket of South-east Asia </li></ul><ul><li>Corn – a basic animal feed raw material and prices are rising </li></ul><ul><li>Approach – large-scale farming (3,000 scaled to 15,000 hectares) using Western technology (centre pivot irrigation) and management; marketed to feed millers in Vietnam and Thailand or for export to China </li></ul><ul><li>Structure – private equity; guaranteed Economic Land Concession; 100% foreign ownership </li></ul>
3. 3. The Kingdom of Cambodia <ul><li>In the centre of South-east Asia </li></ul><ul><li>Excellent agriculture </li></ul><ul><li>Stable government </li></ul><ul><li>Good market access </li></ul>More maps More information on Cambodia
4. 4. Corn (Maize) <ul><li>World market 867 myn tons (2011/12) </li></ul><ul><li>Dominated by North America </li></ul><ul><li>Asia is a major net importer (China uses 160 myn tons, other Asian countries import net 40 myn tons) </li></ul><ul><li>Major raw material for animal feed – used for chickens, pigs and cattle </li></ul><ul><li>Demand and prices are rising </li></ul><ul><li>Neighboring countries Thailand and Vietnam have major corn milling and animal feed industries </li></ul>More information…….
5. 5. Approach <ul><li>Agricultural and market conditions in Cambodia are perfect for corn (maize) production ( link to land use map ) </li></ul><ul><li>The Government of Cambodia grants Economic Land Concessions (ELC) with long-term guarantees </li></ul><ul><li>Foreign investment is welcomed – the UK is the largest foreign investor this year in Cambodia (see footnote) </li></ul><ul><li>Thailand and Vietnam animal feed millers will absorb output </li></ul><ul><li>Note: In 2011 UK is the largest investor with the promised investment of USD 2.22 billion, followed by the domestic investor of USD 1.29 billion and Chinese with USD 1.13 billion (source: sophirom.wordpress.com) </li></ul>
6. 6. Location of the Proposed Economic Land Concession <ul><li>Kompong Speu Province </li></ul><ul><li>Three hours drive from the capital, Phnom Penh </li></ul><ul><li>On the main A4 route to the port of Sihanoukville </li></ul>
7. 7. <ul><li>Scale and Technology   </li></ul><ul><li>Initial 3,000 to 5,000 ha. plot </li></ul><ul><li>Scaled up to 15,000 – 20,000 ha. </li></ul><ul><li>Fully mechanized </li></ul><ul><li>Centre pivot irrigation supplied by Valmont (Valley), the world’s leading manufacturer </li></ul><ul><li>Three crop harvests annually </li></ul><ul><li>Full community safeguards and social responsibility integrated with the project </li></ul>More about Centre Pivot Irrigation
8. 8. <ul><li>Productive output </li></ul><ul><li>Three crops a year provide 18 tons per ha. or for 5,000 ha. = 90,000 tons </li></ul><ul><li>At the decade-long actual average price of corn of \$136/ton this output is valued at US \$12.24 million (GBP 7.65 myn). Current corn price is over US\$273/ton. </li></ul><ul><li>Also note that the Thai producer price typically has a premium of 11% over the international corn price. </li></ul><ul><li>Costs: </li></ul><ul><li>A full cost-benefit and returns study is required at feasibility stage. </li></ul>Profitability
9. 9. Growth Plan Initial 3,000 to 5,000 ha provides a profitable return and solid experience of the production and market conditions With success and knowledge of the market land area can be added incrementally in similar sized plots The business can be vertically integrated with scale into animal feed production The farm can eventually form the basis of animal feed-lots and meat production
10. 10. Financing Installation and start-up investment costs will be in the order of \$3,000/ha (depending on infrastructure requirements. Basic initial capital for start-up of US \$15 million ( GBP 9.4 million) Partners Possible co-financers include regional agribusinesses such as Charoen Phokpand or Saha Farms (both Thai animal feed producers; InfraCo Asia may provide start-up capital to cover infrastructure; the Asian Development Bank could be a longer term development partner for financing expansion.
11. 11. Risks Land grabs - Check this link Country risk - B2 ( Moody's )   B+ ( S&P ) Commodity market risk – Corn price falls below long-run average of US\$3.5/bu (\$136/ton) Corruption – Contract enforcement is an issue as is extortion and casual corruption Physical safety – Minor from crime and accident, no political risk
12. 12. About Our Management Team FoodWorks Company Limited is a British-owned Hong Kong based company specializing in natural resource management with a particular focus on agriculture, agribusiness and rural development. We offer a unique range of services to investors and other implementing projects in the world’s most challenging environments. More information on our management team