Government to help abattoir stay out of the red
The company behind Cambodia’s first industrial slaughterhouse has refuted local media reports that claimed the government intends to shut down the company, insisting that remarks made by the minister of agriculture last week were taken out of context.
Tola Chea, general manager of SLN Meat Supplies, said the $22 million abattoir, which supplies meat to the domestic market but was always intended as an export supplier, remained solvent and sales were growing.
“SLN has no intention of closing,” he said yesterday. “SLN’s local sales have grown month-on-month and we have streamlined much of our business, with these efficiencies resulting in lower operational costs. We will also have our first container of boxed Australian beef shipped to Laos next week.”
Chea said local media outlets had misconstrued a statement made by Minister of Agriculture Veng Sakhon during a visit to the abattoir on Thursday in which he offered his ministry’s support to promote the company in international markets to prevent it from going bankrupt.
“International trade involves much government-to-government interaction, such as negotiating protocols, so the minister has pledged his full support by providing a dedicated representative from his ministry to SLN to expedite red tape,” he said.
“Local markets are small and true success will be found when we are able to unlock international markets.”
The minister of agriculture called on all the other relevant state authorities to get involved and support SLN, such as the General Department of Taxation and the Ministry of Commerce, which are needed to negotiate tax protocols, customs for quarantine and clearance protocols, Chea added.
“He actually made no reference to SLN closing, but some of his words in the discussion were taken out of context,” Chea said. “His closing comments were along the lines of ‘if the other ministries don’t help, we have little hope’. This closing remark is what other news agencies have taken out of context,” said Chea.
SLN previously told The Post that the company had already sunk $22 million into its 11,000-square-metre facility in Preah Sihanouk province, and had another $10 million earmarked for expansion and ordering new equipment. The company received its first and only shipment nearly 2,800 heads of live Australian cattle last June.
Sakhon said following his visit to the abattoir on Thursday that he had decided to dispatch government officials to the company with expertise in animal health and international trade.
“I found that the biggest challenge SLN faces is the ability to export to international markets, and if they can’t they could go bankrupt unless the ministry helps them solve this issue,” he said. He added that the company is currently only operating two days per week and is slaughtering less than 100 cattle a week.
The minister also said that SLN had informed him that exports were being held up at borders because they did not have the proper tax compliance documents. He said these shipments would not reach their destination unless the company complied with sanitary and phytosanitary (SPS) requirements.
“Another issue is that the company does not fully understand how strict SPS laws work in other countries,” he said. “As long as SPS procedures remain strict to ensure the quality, standards and food safety of products, the company needs the government to intervene to establish bilateral trade agreements for beef shipments with countries like Thailand and China.”
However, Sakhon was confident that the ministry could hammer out a deal soon by working with SLN directly and then holding state-to-state negotiations on export protocols.
Mong Reththy, chairman of agro-industrial conglomerate Mong Reththy Group, said it was crucial for exporters to comply with SPS requirements, not only to ensure delivery of a shipment but also to secure future orders.
“I do not face any challenges for exporting as long as I understand what the buyers want and meet their food safety requirements,” he said.
“If our products are turned down, it will destroy our trade reputation and block future exports, so it is good that the Ministry of Agriculture is directly intervening to ensure that they [SLN] can meet the requirements.”