Unfavourable Business Conditions Force Thailand’s Third-Largest Sugar Firm to Withdraw from Cambodia

• Sommana Yan
• 6 July 2024
• Local News
• 18976 Views

Thailand’s third-largest sugar producer, Khon Kaen Sugar Industry Plc (KSL), has announced its decision to withdraw its investment from Cambodia due to unfavourable market conditions and the underutilisation of trade schemes such as the Generalised System of Preferences (GSP) in Cambodia. The company cited these challenges despite a recent rise in global sugar prices following supply disruptions caused by droughts in several countries, according to the Bangkok Post on 5 July 2024.

KSL’s chairman explained that the company could not sustain operations in Cambodia amidst lower global sugar prices and challenging business conditions. KSL began its sugar business in Cambodia in 2006 through a partnership with Taiwanese investors, operating sugar manufacturing and sugar cane plantations. The Royal Government of Cambodia had granted KSL and its partners a 90-year investment concession covering 125,000 rai (96,168 hectares).

Although KSL is exiting Cambodia, it continues its investment in Laos, where the company has secured rights from the Lao government to operate a 600,000-rai (9,600 hectares) sugar cane factory and plantation.

The GSP provided by the European Union and the United States aims to support weaker economies by allowing them to trade and import goods with tax exemptions or reduced tariffs. However, the lack of effective usage of this scheme in Cambodia has contributed to KSL’s decision to withdraw.

• Business and Market
• Economy and Finance
• Agriculture and Aquaculture Project