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ADB Cambodia gives $15M concessional loan to animal feed producer De Heus TMH

Harrison White

The Asian Development Bank has awarded its first loan to Cambodia’s agricultural private sector, the $15 million concessional debt to De Heus and TMH Company Limited will aim to increase storage and processing capacity for local animal feed production in Cambodia.

De Heus and TMH Company Limited is a joint venture between De Heus Animal Nutrition from the Netherlands, a family-owned global animal feed supplier established in 1911, and TMH Company Limited from Cambodia.

TMH is a leading animal feed producer in Cambodia, with the capacity to produce 180,000 metric tons of high-quality livestock feed.

Minister of Agriculture H.E. Sakhon Veng.

Speaking at the signing ceremony, Minister of Agriculture H.E. Sakhon Veng commented on the partnership as a fantastic example of the Royal Cambodia Government, development organizations, and private enterprises working together.

“This investment in Cambodia’s agriculture sector is vital for Cambodia’s economic growth as well as a key agenda for the Cambodian government to increase the affordability and reliability of our food supply,” he said.

In April, the development bank predicted Cambodia’s Gross Domestic Product to grow by 5.3% in 2022 and 6.5% in 2023. Agriculture is predicted to maintain a growth rate of 1.2% between 2022 and 2023.

To read more about the ADB’s economic outlook for Cambodia click here.

Public and private partnerships 

General Director of De Heus Mr Harry Schimmel said the company was committed to empowering the independent farmers of Cambodia as well as the Kingdoms food supply through this public private partnership.

“The strategic cooperation agreement with ADB, is in combination with our focus on training and knowledge sharing, with the motto global knowledge­ local impact. We will also support and accelerate the sustainable development of the Cambodian animal protein supply chain,” he said.

The transaction will be supported by the Asian Development Fund 13 Private Sector Window (PSW) through a partial guarantee solution.

General Director of De Heus Mr Harry Schimmel.

The PSW supports private sector development in frontier markets by offering grant resources to fund financial products that address and reduce common financing constraints that hinder many private sector transactions.

The money which will be spent in Kampong Speu province and also includes a $500,000 technical assistance grant to support training for 2,000 maize and 2,000 poultry farmers, many of them women, in climate-resilient farm practices and financial literacy.

Supporting women farmers will help strengthen their positions within farms and boost their access to finance to expand their businesses as well as being a key agenda for the ADB.

Investing in Cambodia’s food supply

ADB Country Director for Cambodia Ms Jyotsana Varma commented by supporting De Heus TMH, the bank was helping to strengthen the feed value chain, improve the livelihoods of feed crop, livestock, and fish farmers, and support sustainable and resilient agricultural practices.

“Developing locally sourced, high-quality, and affordable animal feed supply is integral in safeguarding Cambodia’s food security and reducing reliance on imported feed inputs,” she added.

The additional storage and procurement of processing machinery will promote efficient feed production.

ADB Country Director for Cambodia Ms Jyotsana Varma.

This will allow the company to buy more local raw materials like maize, rice, and cassava from smallholder farmers within its supply chain, enabling a supply of affordable, high-quality feed for livestock and fish farmers.

With investments in storage, maize can be stored for more extended periods, making the supply chain less dependent on climate-related vulnerability.

ADB Cambodia is committed to assisting the Cambodian government implement its post-pandemic framework to ensure an inclusive recovery, and outlined the 3 R’s – recovery, reform, and resilience.

In addition, the ADB believes that properly utilizing trade agreements and regional cooperation initiatives already implemented will further open up the Cambodian economy.

To read more about the ADB and Cambodia’s post-COVID recovery for economic reform agenda click here.

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