Cassava industry demands reopening of polluting plant

Photo by: HENG CHIVOAN
A security guard looks at a closure notice outside the shuttered gates of the South Korean-owned MH Bio-Energy Group factory Monday in Kampong Thom province.

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I will lose $348,000 if the suspension of MH Bio-Energy Group continues.
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The Phnom Penh Post
Thursday, 03 September 2009
Khouth Sophakchakrya

Farmers and brokers say that unless the bio-ethanol factory resumes operations soon, they will lose thousands of dollars

CASSAVA farmers and brokers have urged the owners of a bio-ethanol factory closed Monday to overhaul its wastewater-treatment systems and resume production as quickly as possible as Thai buyers moved Tuesday to force down prices.

Pheng Se, 26, a cassava broker from Kampong Thom province, said he sold 6,500 tonnes of dried cassava to the South Korean-owned MH Bio-Energy Group in late July for US$118 per tonne and was preparing to deliver a 3,000-tonne shipment at $116 per tonne when the factory was shuttered after complaints by local villagers that toxic waste from the facility was killing tens of thousands of fish in nearby waterways.

"I will lose $348,000 if the suspension of MH Bio-Energy Group continues to until next month, because there is no-one else to buy [the cassava]," he said.

MH Bio-Energy Group is one of the few buyers of cassava in Cambodia.

Seng Chantha, a cassava farmer from Kampong Svay commune in Banteay Meanchey province, said the closure meant growers would be forced to sell their crops to Thai buyers, who pay much less than local brokers who planned to on-sell to the factory.

"Local cassava brokers have stopped buying our wet cassava products because they said ... MH Bio-Energy Group was closed," he said. "When I planted my cassava, I expected to be able to harvest it and sell it at a high price, but now I don't have a decent market to sell it in."

Te Haing, a broker from the province, said he cancelled plans to dry 10,000 tonnes of cassava bought from local farmers for the refinery and redirected it to Thailand, where he received 1,100 Thai baht (US$32.36) per tonne for it in its wet, unprocessed state. He said he had paid 1,250 to 1,300 baht per tonne to buy the cassava from farmers.

He sold the batch on Monday before Thai buyers dropped prices further in anticipation of a surplus on the market, he said. "The Thais reduced the price they would pay for wet cassava product to 800 baht per tonne Tuesday after they discovered that MH Bio-Energy Group was suspended on Monday," he said.

The closure of the factory had also left Te Haing with 7,000 tonnes of dry cassava already paid for sitting in his warehouse, preventing him from processing more of the crop. Thai buyers would only buy wet cassava, not value-added dried cassava, he said.

Sar Peov, the head of MH Bio-Energy's administration unit, acknowledged the impact of the suspension on the income of local cassava farmers and brokers. It had also jeopardised the company's contract with European buyers, he said. "We are concerned that we will not be able to process enough bio-ethanol to deliver to our buyers in time to fulfill our contract," he said. He declined to give the size of the order but said it was due in October.

MH Bio-Energy Director Lee Dong Jun told the Post in June that the factory had exported 20,000 tonnes of bio-ethanol fuel to European markets for the year so far and expected to export an additional 20,000 tonnes by year-end.

Sar Peov said the company was fixing the "malfunctioning" water-treatment system and hoped to have finished the job in two weeks.

Ministry of Industry, Mines and Energy Secretary of State Ith Praing said the impact on cassava farmers and brokers was unfortunate. "But we need to suspend and fine them because they had technical problems which caused them to expel liquid wastes and gas that have caused harm to human health and the properties of people living around the plant, and seriously affected the environment," he said.

"However, I hope they will fix their water-treatment system and continue processing bio-ethanol again soon," he added.

The Department of Fisheries is expected to release findings on pollution levels near the factory today. Villagers were due to meet with the Ministry of Environment last night and were expected to make a demand for compensation today.