In a bid to compete with producers of cheap factory-ready leather, Mong Reththy Group is building Cambodia’s first pig skin processing factory.
Mong Reththy said work on the $8 million plant had already started and was slated for completion by late 2015, all thanks to a joint investment with a Chinese company he declined to name.
Reththy said the plant – located at his company’s private port in Preah Sihanouk province – would employ 1,000 people. Built on 6.6 hectares, the site will include a health clinic, workers’ accommodation and a canteen, he added.
“This is the first ever such factory in Cambodia,” Reththy said.
“In fact, our neighbouring countries, especially China, have invested in such kind of production for many years already, but only we don’t have it.”
Reththy said the opportunities for profit-making in the industry were substantial.
“While [Chinese plants] import pig skin at about only $2,000 per tonne, they can sell it back after processing it to leather for about $30,000 [per tonne],” he said, adding that the majority of the factory’s produce will be reserved for export.
Cheat Khemara, senior official at the Garment Manufacturers Association in Cambodia (GMAC), said that there are around 50 factories in Cambodia that produce shoes and bags and require leather as a raw material.
“Most [of these] raw materials are either provided by buyers or imported from producers outside Cambodia,” he said.
Khemara added that producing leather within Cambodia would benefit the garment sector by decreasing transportation and servicing costs.
“It will result in increasing revenue for the industry.”
Contact authors: Hor Kims