Packaging Upgrades Usher in Market Expansion Opportunities

A local packaging company works with Cambodia’s horticulture sector actors to improve packaging

Quality packaging for horticulture products can serve multiple purposes, including reducing damage during transport and storage, protecting food safety, and providing marketing and branding. Acquiring quality packaging has been a challenge for Cambodia’s producers, agricultural cooperatives (ACs), local processors, and small and medium enterprises (SMEs) as they build and establish their domestic and export markets.

To assist horticulture actors in need of branding and packaging support, Harvest II partnered with packaging company Phnom Penh Packaging Company (PPPC). Utilizing exposure visits, trainings, and business matching events, Harvest II and PPPC are working with project partners to improve the marketing and packaging of products, facilitating entry into high-end markets, and capturing premium pricing.  

Harvest II recently organized the Product Development for SMEs online training that was attended by 42 SMEs and AC members from across its target provinces. The product development training focused on introducing new marketing strategies, exploring labeling and packaging, and discussing other strategies and practices to increase competitiveness. Working with longan actors to expand the distribution of fresh and processed longan, Harvest II also coordinated a two-day exposure visit to Phnom Penh for 12 longan actors to learn about processing, post-harvest handling, and packaging and branding. During these events, PPPC facilitated sessions presenting easy-to-use packaging techniques and best practices to protect and add value to products.

PPPC’s Managing Director, Mr. Hai Sophea shared the company’s motto with the participants, “Packaging Represents Your Product Quality.”

Phnom Penh Packaging shares their packaging solutions during an exposure visit for Harvest II partners

After the sessions, PPPC offered additional assistance to attendees that would like to learn more about expanding their business through packaging. They also formed a Telegram group with SMEs and ACs to share information and packaging advice.

Continuing to establish linkages, Harvest II organized an online business matching event between the packaging company and ten Harvest II partners. Following the event, Ponleu Pichchenda AC made an initial purchase of 250 bottles from PPPC to package its honey for markets in Phnom Penh. The AC continues to work with the company to improve its marketing, packaging, and distribution system. After hearing the challenges fruit processor Navita was facing, PPPC offered an economical alternative to the processor’s expensive longan syrup glass bottle packaging. After receiving samples of the packaging, Navita ordered 3,000 units. The two parties have an informal agreement and continue to work together to improve packaging for Navita’s other processed products.

General Manager of Navita Mr. Uy Cheng Heng shared, “It is a pleasure to work with Harvest II partners, and I am confident in their products and services.”

Navita showcases its longan in syrup product in new glass packaging, sourced from Phnom Penh Packaging. 

PPPC continues to identify improved packaging solutions in areas such as reducing in-transit produce loss from the provinces to domestic markets, developing standardized company branding, and working with companies such as AGID to develop packaging to facilitate exports. Harvest II and Phnom Penh Packaging Company have partnered together to unlock opportunities for Cambodia’s horticulture actors across domestic and international markets, developing customized branding and packaging solutions.

 

 

Facilitating access to safe products builds a healthy community

 A local retailer implements a multifaceted action plan to promote and ensure access to safe fruits and vegetables

Aliments is a Phnom Penh-based retail market established in 2016 that specializes in safe agricultural products, including vegetables, fruit, meat, rice, and other consumable goods. Addressing the growing demand for safe food, the retail market offers both fresh and processed products with various certified safety standards ranging from organic, chemical-free, good agricultural practices (GAP), good manufacturing practices (GMP), hazard analysis critical control point (HACCP), and ISO22000. Envisioning a community with convenient access to organic and safe products, Aliments is actively working on improving its supply chain by focusing on production, distribution, value-added products, and marketing.

In support of Aliment’s mission, Feed the Future Cambodia Harvest II recently awarded the market retailer a Horticultural Solutions grant to expand vegetable production by strengthening pre- and post-harvest practices, ensuring a consistent supply of safe vegetables. The retail market is building a model farm to demonstrate improved production methods such as net housing and crop rotation. Once the model farm is complete, Aliments will promote the adoption of a participatory guarantee system (PGS) and GAP through producer training and will establish contract farming agreements with at least 25 participants. The company is also developing value-added products and installing solar dryers to convert organic waste into processed products.

Promoting local access to safe produce, an Aliments employee displays safe and organic leafy greens.

Harvest II assisted Aliments to establish its model farm by connecting the retailer with producer and net house builder Tasey Samaki Agricultural Cooperative (AC).  After the initial introduction, the actors agreed to partner together and Tasey AC constructed five net houses on Aliments model farm. Additionally, Tasey AC will serve as a safe and organic produce supplier to the retail market.

Aliments recently launched a media campaign using its website, blog, and videos to educate the community, build brand awareness, and expand its market reach. Harvest II supports the retailer by providing input and ideas for their videos and online program “Ali Health,” which promotes food safety standards and healthy living. Recognizing the potential benefits of linking the two businesses, Harvest II connected the market retailer to Battambang-based fruit processor Navita. The business match led to Navita appearing as a guest on the Aliments’ “Ali SME” series – a component of the “Ali Health” program that links quality producers to consumers by sharing stories, discussing production, and highlighting products.

An in-store display showcases Aliments’ high-quality safe fruits and vegetables. 

Co-founder of Navita, Sothea Rina Uy, shared the benefits of being featured on the “Ali SME” program, saying “the show promotes Navita’s products and expands local and international markets.”

Since even before the pandemic, Aliments has been developing its online business approach, which proved to be advantageous during the recent pandemic lockdown. Having observed the benefits of online ordering, the retail market began establishing an online presence and signed formal contracts with five ordering and delivery service apps, including Nham 24, Food Panda, Buzzbuy, Grab, and E-GETS.  In addition to these new services, Aliments created company Messenger and Telegram pages and developed a smartphone app, facilitating direct ordering through various channels. By proactively preparing an action plan, implementing standard response procedures, and strategically placing staff in the provinces to ensure an undisturbed supply chain, Aliments has experienced a three-fold increase in sales during Cambodia’s recent lockdown.

Addressing elements in its supply chain, including production, distribution, value-added products, and marketing, Aliments continues fostering development and facilitating access to safe agricultural products to Cambodia’s local community. 

 

A partnership launches a processor into international exports

 Capturing added value and employing women in Cambodia’s horticulture sector

Illustrating determination and innovation, the owner of Chey Sambo Cashew Nut Processing Handicraft (CSC) Ms. In Laihout began her career as a cashew farmer and has expanded her technical knowledge and business skills working in various capacities in the cashew subsector. Drawing on her initial experience and her boundless energy, Ms. Laihout developed CSC’s targeted mission, aiming to sell Cambodia’s processed cashew in domestic and international markets by establishing contract farming agreements with producers, thus ensuring a consistent quantity and quality of raw cashew nuts. CSC is also dedicated to empowering women, prioritizing the employment of local women to work in its processing facility. 

Presenting at a workshop organized by the Ministry of Agriculture, Forestry, and Fisheries last year, CSC met and forged a business partnership with the Japanese company Top Planning Japan (TPJ). This relationship paved the way for CSC to launch exports of its premium processed cashew. The two parties signed a business agreement and TPJ loaned CSC $280,000 to construct a medium-sized factory in Kampong Thom province, expanding the company’s processing capability and facilitating the export of cashew nuts. TPJ also provides working capital to purchase raw cashew nuts, enabling year-round processing. 

An employee manually sorts and grades the cashew nuts to ensure high-quality product

Feed the Future Cambodia Harvest II awarded an Investment Accelerator grant to CSC to help catalyze further investment in its production capacity. The cashew processor invested $305,776 to upgrade the factory’s equipment, including a peeling machine, DC-shell machine, grading machine, vacuum packing machine, waste-water treatment, and other equipment. The new equipment facilitated compliance with international food safety standards, environmental requirements, and expanded production capacity, increasing the local and international competitiveness of CSC’s processed cashew.

Ms. Laihout proudly shared, “The grant helped CSC improve the capacity of processing to respond to market demand, now there are many buyers ordering finished cashew products from the factory.” Ms. Laihout is a pioneer in helping the country capture added value from this valuable commodity, grown by tens of thousands of smallholder farmers.

The factory was completed and equipment installed in December 2020, and processing launched at the beginning of 2021. Though delayed slightly due to pandemic-related travel restrictions, TPJ’s initial eight-ton order was successfully delivered in the beginning of June 2021, and a second nine-ton order has already shipped and is expected to arrive in mid-July.  The two parties have made formal arrangements and CSC will continue exporting seven to ten tons of processed cashew to Japan per month.

CSC is dedicated to promoting gender equality, employing a majority of women in its factory. 

Aiming to access additional international markets, CSC is participating in Harvest II’s Export Competitiveness Program for Local Cashew Processors, facilitated by cashew expert Jim Fitzpatrick in collaboration with HEKS.  The integrative program helps domestic processors build competitiveness and resilience by raising awareness about growing demand in the sector, providing SMEs a blueprint to access the most relevant opportunities, and guiding actors as they build their cashew processing and exporting capacity.  The cashew processor is also working with TPJ to unlock other international export opportunities by applying for hazard analysis critical control point (HACCP) certification.

To supplement supply and meet international demand, the business partners are also working together to test the products of small, local cashew processors and CSC will purchase semi-processed product from processors that meet TPJ’s standards.

Ms. Laihout is dedicated to empowering women and promoting development in Cambodia’s horticulture sector. Utilizing a holistic action plan, CSC continues working with Harvest II and other partners to capture every opportunity to learn, improve, and expand – promoting prosperity and sustainability across Cambodia’s cashew subsector.

 

Facilitating global access to Cambodia’s fruits and vegetables

A business implements a holistic approach, applying interventions at various levels to improve the horticulture supply chain

Observing supply chain challenges occurring throughout Cambodia’s horticulture sector, the newly established, joint-venture company AgriOn Cambodia (AgriOn) devised a multifaceted action plan that envisions a dependable, sustainable supply of locally grown, safe fruits and vegetables to domestic and international markets. Investing to improve storage and logistics, working with producers to adopt improved production practices and establish traceability systems, and developing formal contract agreements with producers, AgriOn aims to implement a new business model to promote Cambodia’s horticulture sector on a global scale.

Feed the Future Cambodia Harvest II “Harvest II” awarded an Investment Accelerator grant to AgriOn to support the expansion of their operations through an investment in logistics and cold-storage equipment. The investment includes cold rooms, refrigerated trucks, conveyers, cleaning machines, water filtration systems, packaging machines, and other equipment. This equipment improves the collection and transport of fruit and vegetables. Refrigerated trucks transport fresh, quality produce to a cold storage facility to wash, clean and package it in accordance with food safety standards, followed by refrigerated transport to local and international markets. Since receiving the pay-for-performance based Harvest II grant, AgriOn invested $221,469 and hired 23 new employees including eight females.

Harvest II awarded a grant to AgriOn to establish a sustainable supply chain to domestic and international markets.

The investment improves storage and logistics and promotes compliance with food safety standards, increasing local and international competitiveness and access to Cambodia’s products. AgriOn’s Director Mr. Marith Chhor recently stated, “with the grant from USAID, it not only helps us in funding, but it may help us access more high-value markets like the US and EU, and give more chances to Cambodian growers.”

AgriOn’s multi-pronged action plan includes forging a dependable and high-quality supply chain by working closely with local agricultural cooperatives (ACs) and farmers to supply quality inputs, provide training, and connect them to reliable suppliers of greenhouse technology. In collaboration with PDAFF, AgriOn works with their producers to implement good agricultural practice (Cam-GAP) standards to improve quality and yields. In March, AgriOn provided technical training to 187 producers from 18 ACs in Battambang province, sharing various practices including crop cultivation, land treatment, and soil testing.

AgriOn signs contract farming agreements with representative from ACs to supply various fruits and vegetables.

Encouraging development across Cambodia’s horticulture sector, AgriOn establishes contract farming with farmers and farmer groups.  The company signed contract farming agreements with a total of 418 farmers from 33 ACs across 11 provinces. Mr. Nop Nun from Tasei AC and Mr. Long Mom from Meanchey AC, representatives from two producer groups that have contract agreements with AgriOn, shared that they are very happy working with AgriOn and receiving the support they provide, including technical support, record keeping, and market access.

In collaboration with various partners including Harvest II, AgriOn continues actively working to improve Cambodia’s horticulture sector through the implementation of a holistic, multi-pronged approach.  AgriOn is establishing a sustainable supply of local and safe fruits and vegetables to both domestic and international markets through investment, training, and contract farming.

 

 

 

 

 

Exposure visit encourages market & product diversification

New connections unlock a multitude of exciting opportunities in the longan subsector. 

Uncertainty regarding standards, quality and packaging creates challenges in the fresh and processed longan sector. To address these issues and expand distribution, longan actors require a better understanding of market expectations in terms of quality, quantity, and production requirements.

Observing these challenges, Feed the Future Cambodia Harvest II “Harvest II” organized two events for longan actors to learn, observe, and develop connections in potential markets. Harvest II assembled 16 longan actors including processors, exporters, suppliers, a logistics company, and agricultural cooperatives (AC) from Battambang province to discuss collaboration opportunities. Harvest II recruited a consultant to assist these actors to increase competitiveness and unlock access to export markets by identifying and exploring target markets. The meeting established new connections and resulted in the members forming a Telegram group to share market and technical information, raw material supply, and logistics arrangements. 

Longan actors visit KCCV Plantation’s market to gain a better understanding of product expectations and requirements.

 Following the meeting, Harvest II organized and conducted a two-day exposure visit to Phnom Penh for 12 longan actors from the newly formed group. Sessions with experienced market actors focused on three areas of growth:

1.    Encouraging the adoption of good manufacturing practices (GMP), hazard analysis critical control point (HACCP), and food processing standards, certified fruit processing companies CSL Enterprise and KCCV Company shared their experiences, provided guidance, and advice to participants.

2.    Promoting value-added longan products, Harvest II introduced the participants to food processing experts at the Institute of Technology of Cambodia (ITC) and Phnom Penh Packaging Company (PPPC) to discuss processing, product packaging and branding.

3.    Facilitating market distribution expansion, introductions and meetings were held between longan actors with buyers, wholesalers, and premium markets.

The visit employed active learning and knowledge sharing to advance the longan sector, promoting improved production standards, value-adding, and diversification. Mr. Uy Chhengheng, co-founder of Navita shared what they learned from the visit, “Navita now knows about Lucky market’s requirement on their new products, that helps Navita improve their products by themselves to be able to sell at Lucky in the future.”

A visit to Chip Mong premium market during the exposure visit resulted in a partnership with CSL.  

Harvest II continues to support increased prosperity and sustainability across Cambodia’s horticulture sector. Working with market actors, Harvest II connects and assists in forging critical partnerships and strategies to improve production practices, strengthen the supply chain and diversify distribution networks.

A chain reaction, beginning with the initial meeting and continuing with the exposure visit, produced a multitude of fruitful partnerships for the longan actors. New market diversification partnerships include KCCV selling Agro Nature’s products in their Phnom Penh markets and CSL Enterprise successfully introducing and launching their new products in AEON, Lucky and Chip Mong premium markets. Engaging product diversification, wholesaler Chheng Sreyleap now supplies fresh dragon fruit to fruit processor Navita for processing. Further agreements facilitated by these events include Yim Bunthoeun supplying fresh longan to KCCV and AC Ponleu Pichenda supplying fresh longan to Chheng Sreyleap and KCCV. Additionally, the group formed Telegram groups with PPPC to share packaging advice and with ITC to access technical information for processed products.

Harvest II continues to support increased prosperity and sustainability across Cambodia’s horticulture sector. Working with market actors, Harvest II connects and assists in forging critical partnerships and strategies to improve production practices, strengthen the supply chain and diversify distribution networks. 

 

Strengthening the Horticulture Sector through Contract Farming

Agricultural Cooperatives in Battambang use contract farming to guarantee consistent and quality supply

Businesses in Cambodia’s horticulture sector are often hampered by the lack of formal agreements to clarify mutual expectations in business dealings. Contract farming is a formal agreement to promote trust and clarify expectations around product quality, quantity, timing, and price. However, many actors fail to form contract farming agreements because they don’t know what’s involved and don’t understand the benefits. 

Feed the Future Cambodia Harvest II “Harvest II” encourages the adoption of contract farming as a tool of mutual benefit for both farmers and buyers. Harvest II facilitated a contract farming signing event between Tasei Agricultural Cooperative (AC) and five ACs, from Battambang and Banteay Meanchey provinces, and the buyer REMIC. The Provincial Department of Agriculture, Forestry and Fisheries (PDAFF) from Battambang served as the witness for the event. In the agreements, Tasei AC agreed to source vegetables from the five ACs based on price, quantity, type of vegetable, and other binding conditions agreed to by both parties. 

Farmers harvest curly cabbages in Tasei Agricultural Cooperative’s net houses in Battambang. 

Before entering into the agreement, Harvest II introduced these ACs to growing safe vegetables under net houses. Observing a strong interest, Harvest II connected them with Tasei AC to provide net house building services and sign agreements to work together. Among these ACs, PichChenda AC originally focused on growing longan but after seeing the benefits, they expanded to also include vegetables. Harvest II supported 30 of the AC’s members’ joining Cam-GAP trainings conducted by PDAFF. 

Prior to the signing of the agreement, Tasei AC sourced around 600 kg of vegetables per day from its members, but after signing the agreement, they can now source an average of two tons per day. Tasei AC supplies these vegetable to REMIC, one of the leading buyers in Phnom Penh, and other buyers across the provinces. Additionally, Harvest II connected Tasei AC with Laey Baitong, a vegetable supplier in Battambang. The two parties have partnered together to capture the growing market demand. 

Harvest II facilitates a contract farming signing event between Tasei AC with five other ACs, and buyer REMIC, witnessed by PDAFF.

Even though many businesses were negatively impacted by the pandemic, Tasei AC has expanded, increasing from 26 to 49 net houses and building an estimated 120 net houses for other cooperatives across the provinces. The expansion created jobs for 26 Cambodian migrant workers returning from Thailand, helping them generate income during the crisis. 

The leader of Tasei AC, Mr. Nob Nun, has worked as a farmer in the past. This experience inspired him to help other farmers implement better farming techniques. He welcomes new ideas and support from various development projects including Harvest II. He shared, “Through Harvest II, we have expanded our services, building more net houses and sourcing more vegetable from other ACs. Through contract farming, farmers are happy to work with us because we help them find markets for their products.” 

Tasei AC is one of many safe vegetable suppliers, working to not only expand their cooperative but also help other ACs grow. Through the establishment of strong connections with multiple actors, Tasei AC brings quality and safe local products to Cambodia’s people, encourages healthy living and promotes the country’s sustainable landscape.

New Financial Product Help Businesses Accelerate Growth

Through Harvest II’s grant, AMK introduces supply chain financing to help address MSME’s financial constraint.

Access to finance is critical for business growth, increasing working capital, improving production, and strengthening the supply chain. Many businesses find themselves unable to expand as they cannot access financing in a timely manner, consequently restricting the effective planning and managing of cash flow.

In January 2020, Feed the Future Cambodia Harvest II “Harvest II” awarded a grant to AMK Microfinance Institution to pilot supply chain financing (SCF) for horticulture MSMEs. SCF is a type of working capital designed to address a company’s short-term financing needs and is a fairly new financial product for AMK.

AMK promoted its SCF model, introducing the customized financing products and services to 26 SMEs (including five women entrepreneurs). As a result, AMK approved the financing of $1.5 million to four market actors including an exporter and input firms in the vegetable and longan subsectors.

Mr. Yim Bunthoeun, a longan exporter in Battambang was one of the actors who qualified for the loan. AMK approved loan  to Bunthoeun to use as working capital to increase his longan purchases. Bunthoeun uses this money to promptly pay farm owners for maintaining the longan farms before flowering and harvesting, and repays AMK after the product is sold. Bunthoeun said, “This loan is important for me as I can expand my purchasing and increase the amount of fresh longan export.”

Yim Bunthoeun collects fresh longan from farmers ready to export to Thailand.

To support Bunthoen on quality production, Harvest II linked the exporter to input firms Khmer Angkor Farmer (KAF) and Drone Khmer Technology (DKT) to receive technical production training and access quality inputs to boost longan yield. In addition, Harvest II supported the General Directorate of Agriculture (GDA) in delivering Cam-GAP training to 422 longan producers.  Forty of these producers applied for Cam-GAP certification, aiming to receive premium pricing for their quality products.

Harvest II assisted Bunthoeun access new markets by connecting him with the safe food mart of KCCV Company in Phnom Penh. The market is currently sourcing 100 kgs of fresh longan per week from Bunthoeun. Harvest II hosted a visit for the exporter to visit and learn about the processing lines of the processing company CSL Enterprise in Phnom Penh, as he would like to set up a longan drying facility to add value to longan. The project also connected him with various processors during business matching events, aiming to increase access to export markets and explore new business opportunities.

Harvest II organizes a business matching event for 16 longan actors to discuss collaboration opportunities.

Bunthoeun said, “I want to expand my export markets not just to Thailand. This is a great opportunity for me to connect with other business partners. Thanks to Harvest II, I have increased not just supply and quality but also access to new potential markets.”

AMK also approved and disbursed supply chain financing to Azaylla in the amount of $20,000. Azyalla used the entire financed amount for expansion of their working capital to a double increase of sales to retail markets such as Chip Mong and Grocerdel in Phnom Penh.

Through Harvest II’s grant program, the project supports various actors including processors, exporters, financial institutions, businesses and farmer associations not just improving production and supply chains, but also accessing new opportunities that help them grow and expand beyond their limits.

 

 

 

 

Safe and organic products foster healthy living

The rising demand for safe and organic horticultural products in Cambodia is creating an array of opportunities for businesses, producers, consumers, and other market actors. Laey Baitong is the first agribusiness enterprise that provides local, fresh, safe, and organic agricultural products in Battambang province. Feed the Future Cambodia Harvest II has been working with this enterprise since January 2020, connecting them with multiple actors including producers, input dealers, and other public and private sector partners, utilizing several avenues to provide consumers with access to safe, local products. 

Harvest II connected Laey Baitong with several input supply firms such as Healing Nature and Husk Ventures to procure organic fertilizer; it also connected them with seed dealer Song Mouy to obtain quality seeds for farmers. In addition to sourcing quality inputs, Harvest II worked with Song Mouy to host an exposure visit to Thailand. This notable occasion provided an opportunity for not just Laey Baitong but also producers and other buyers to learn various methods to improve practices and innovative production approaches, thus returning to Cambodia with increased knowledge and beneficial alternative practices to share and build the technical capacity of producers.

Laey Baitong joins an exposure visit to Thailand to learn improved organic production practices. 

Mr. Tityarith, a committee member of Laey Baitong, shared, “the exposure visit provided an opportunity for us to gain a deeper understanding from an expert about organic production and the value of forming producer groups.”

To promote awareness and educate consumers on the benefits of safe and organic products, Harvest II facilitated Laey Baitong’s participation in the Accelerating Inclusive Markets for Smallholders (AIMS) project’s weekly Farmers Market venture, led by the Ministry of Commerce, which began in June 2020.  Harvest II introduced and supported Laey Baitong’s participation and booth set-up to display safe, local vegetables at the pilot market. Additionally, Harvest II assisted Laey Baitong in attending several trade fairs organized by other government ministries to promote their business and products.

Laey Baitong displays their products during AIMS’s weekly Farmers Market to promote safe and organic products.

Mr. Chhay Lo, the chairman of Laey Baitong mentioned, “During the first day at the AIMS market, we earned around $25, but as we continued displaying every weekend, people became aware and bought more. Now we earn about $50 a day – double the amount on the first day.” These trade fairs not only provide an opportunity for Laey Baitong to promote their products but also serve to raise awareness of the benefits of local over imported products.

Additionally, Laey Baitong also caters to customers by providing a home delivery option. As demand for home delivery has increased over the past year, Laey Baitong plans to expand this service, expanding its reach across Battambang and other provinces.

By working closely with key actors and stakeholders in the market system, Laey Baitong has demonstrated the value of promoting safe and local products to end consumers and has succeeded in expanding their business faster than expected.