Chub rubber plantation has entered into negotiations to supply rubber to tyremaker Bridgestone, as the Kingdom's exports increased by nearly 66 percent in the first quarter, according to Chub General director Mok Kim Hong.
But while an agreement with the industry bellwether would open up a new market for Cambodia, he said, Japan-based Bridgestone's requirements for rubber are difficult to meet.
"They are very strict in terms quality, stock and how the rubber is transported, said Mok Kim Hong, also President of the Cambodia Rubber Association.
"We are preparing the paperwork necessary to supply Bridgestone.
Transportation is a major issue, as the Kampong Cham-province plantation's rubber will travel through Vietnam en route to Japan. Customs officials in the Kingdom's eastern neighbour typically open containers to verify shipments, but that can damage the rubber and lessen its quality, he claimed.
Mok Kim Hong cited this as "the main problem between Chub and Bridgestone at the moment and said that as a result a deal is not guaranteed. "Right now, we are in discussion with Vietnam to solve the problem. If we can reach the deal, Bridgestone will buy all of our rubber to supply their factory and resell to other countries, he said.
Mok Kim Hong said the opportunity to sell to Bridgestone would bring global recognition to Cambodia's rubber exports. And even if the company did not accept all of Chub's available rubber, it would still try to sell some to Bridgestone.
Kong Nguon, president of Kong Nuon Import-Export, the exclusive importer of Bridgestone tyres to Cambodia, said he was unaware of the status of the negotiations, but recognised their importance for the Kingdom.
"If we can reach the deal, that's very good for our country, he said.
Meanwhile, Ministry of Commerce figures obtained yesterday showed total rubber exports shot up 65.8 percent to 11,822 tonnes in the first quarter compared to the same period last year.
In dollar terms, those exports soared 205 percent to about US$55 million year-over-year, up from about $18 million.
Mok Kim Hong attributed the increase to Cambodia's growing yield at its rubber plantations. High demand from the tyre industry also played a part, he said, as the country now sells to Malaysia, Singapore, China and some European countries.
He said that Chub had exported more that 1,500 tonnes in the first quarter, an increase of between 100 and 200 tonnes year-over-year. Rubber prices reached approximately $5,450 per tonne over the quarter compared to closer to $2,000 a tonne last year.
Ly Phalla, Director General for Cambodia's Rubber Department, a division of the Ministry of Agriculture, was not available for comment yesterday.(Syed Rashid Ali, Karachi, Pakistan)