Food sector requests bailout
Food sector requests bailout
The Cambodia Food Manufacture Association (CFMA) has requested that the Ministry of Economics and Finance defer all kinds of tax payments and delay repayments to banks and microfinance institutions for its member companies which have been hit by the Covid-19 outbreak.In an open letter dated April 21, the CFMA said the pandemic has severely impacted the food processing, agro-industry and agricultural sector across the Kingdom.
As orders from supermarkets, mini-marts and exporters dry up, its members have been forced to suspend up to 50-70 per cent of staff to make up for revenue shortfalls and cover expenses and loan payments, it said.
“The CFMA hopes that all those affected companies will receive incentives from the government,” said the letter.
The CFMA outlined seven requests to present to the ministry.
It called for the deferment of all kinds of tax payments, the reduction of electricity costs by 25 per cent, the reduction of production costs for continuing production activities and the incentivisation of local consumers.
The remaining requests were the provision of low-interest loans for small and medium-sized businesses, assistance in the delay of down payments and interest payments for six months, and a government subsidy to pay 50 per cent of salaries.
Keo Mom, CEO of Ly Ly Food Industry Co Ltd, which operates factories that produce crackers under the ‘Ly Ly’ brand, told The Post on Wednesday that the private sector would breathe a sigh of relief were the government to accept the requests.
Her company has been facing severe losses due to a decline in market demand, she said.
“If the government assists the private sector at this time, we will be able to maintain business and production chains, and workers will not lose their jobs and incomes,” Mom said, adding that the company has not reduced its workforce.
Mao Sothea, a sales manager at Kirirom Food Product Co Ltd, which processes dried mango, said her company also faces a shortage of about $500,000 in working capital.
She said the shortfall is due to declines in exports and retail demand.
“I think that our private sector needs financial support from the government, particularly tax deferment and a subsidy to help them move business forward,” she said.
Prime Minister Hun Sen has said the government is planning a $450 million relief package.
