Strengthening Cambodian value-added and diversified rice product exports

CBI, the Centre for the Promotion of Imports from Developing Countries, is part of the Netherlands Enterprise Agency, funded by the Netherlands Ministry of Foreign Affairs. The mission of CBI is to connect small and medium-sized enterprises (SMEs) in developing countries to the European market and thereby contribute to sustainable and inclusive economic growth. For more than 40 years, CBI has specialised in supporting value-added exports from selected developing countries in selected high-potential export sectors, allowing these countries to sustainably export the associated products to the European market through capacity building, international promotion and networking activities.

CBI has identified potential in the European rice market, particularly with regard to value-added products, and sees a good match for a support programme with Cambodia that focuses on diversification into value-added products like organic rice and/or further processed products like rice flour, starch, protein, noodles and crackers.

Some underlying reasons for this are given below:

• European demand for sustainably produced rice is growing (including demand for organic rice). At the same time, there are multiple initiatives in Cambodia at farmer level to support the production of organic and sustainable rice. Cambodia has the potential to develop a sustainable rice industry.
• A study has also shown opportunities on the European market for further processed rice products, such as rice noodles and snacks, Gamma oryzanol (and rice bran oil), rice protein and rice starch.
• The costs for the technology necessary to produce processed rice products such as rice noodles and snacks have gone down significantly. This has resulted in an increase in processing in less developed countries. European players are also looking to outsource processing activities. Thailand, India and China are good examples of countries that have developed a large rice processing industry.

• Cambodia currently benefits from GSP preferences for diversified rice products.
• An existing institutional framework is in place in which relevant stakeholders, including national and international development partners, have developed a sector strategy and a branding strategy in order to increase the competitiveness of Cambodia.
• At international level, the Sustainable Rice Platform (SRP) is working on a strategy for producing sustainable rice at a global level. Cambodia is positioned to be a leader in adopting the SRP standard
   

Several other key trends in the European market offer opportunities for the Cambodian rice sector to find higher value for diversified products, including:

• health awareness, in which the strong drive for gluten and lactose-free products plays an important part;
• diversity in taste – consumers are becoming more and more adventurous, seeking to try out different cuisines even at home;
• convenience – more and more, consumers are looking for easier and faster ways to prepare a home-cooked meal;
• sustainability – SRP rice will have a major appeal and organic and Fairtrade-certified rice play a growing role in the European market, which is also reflected in diversified products.

CBI develops and implements projects using several consecutive phases:

• Value Chain Selection (VCS) phase: based on a preliminary research, the most promising VC in the target country is selected;
• Business Case Idea (BCI) phase: an initial idea for a project is formulated based on CBI criteria for the selected VC;
• Value Chain Analysis (VCA) phase: an in-depth analysis of the VC is conducted;
• Business Case phase: a detailed business case for a project is formulated;
• Implementation and Performance Management phase: the project is implemented and monitored over the course of the project life cycle;
• Audit and Evaluation phase, conducted after project completion.

This Value Chain study therefore feeds into a business case based on which a Committee within CBI’s governing structure will approve the investment in a support programme that will last the next five to six years.