Siem Reap goes nuts over value added cashews
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Siem Reap goes nuts over value added cashews

May 26, 2023

Phal Phearom owns a specialist shop in Siem Reap named "Cashew Village". His operation is based on adding value to a widely available product, and he aims to improve the livelihoods of those around him.

Phearom established the handicraft shop – which buys cashew nuts, then peels and roasts them before packaging them for sales – in Khnar Sandai commune's Prei village of Banteay Srei district and registered the shop in February, 2022 at the Ministry of Commerce.

"I think that this kind of business has been established in other areas – I once saw one in Kampot province – but in Banteay Srei district, we have never had anyone peeling them. In the past, locals just broke them by hand and ate them. This is not as efficient as employing a machine, and cannot be done in large quantities," he said.

"The special thing about our cashews is that they are grown locally. This means they are very fresh when we prepare them. When cashews are shipped to a large factory, it can take up to a year before they are peeled. This means they do not taste as fresh as our product," he added.

Having seen the business, Banteay Srei district governor Khim Finan and the provincial department of agriculture encouraged it to produce more cashew nut products for sale and hoped that farmers would support them, or even process them into cakes or foods that could be sold at small handicraft shops in the district.

Finan said the idea is not new, and that the district administration has always encouraged any initiative that could help grow the cashew nut industry.

He added that Banteay Srei district grows a lot of cashews for export, but only sells raw nuts, with no value added to them.

"Most farmers sell them at a low price, with no special features, so we are happy to know that there are business people who doing this kind of work and helping to promote the district's produce," he said.

The 37-year-old owner of Cashew Village said that he actually started packing in 2020, but it was only in February this year that he obtained a business certificate and registered with the Ministry of Commerce. He officially opened in April, so technically the business is just two months old.

He explained that they use machines to process and package the product. He knows that this is the way mass produced cashew nuts are prepared, but said he doesn't know of anyone else who peels them by hand while they are still fresh before processing them.

"Before that, we were buying them in small amounts. Sometimes we bought already peeled cashews before we processed and packed them. But now we peel and pack by ourselves. We are still coming across new challenges that we have to deal with," he added.

He said the inspiration that led him to start processing cashews came from an encounter he had in his previous career. He was a Korean speaking tour guide in Siem Reap, and one day a group of Koreans asked him to take them to a cashew plantation.

"I took them to farms in Siem Reap, Oddar Meanchey, Banteay Meanchey, Kampong Thom and Kampong Cham, and they wanted to import the nuts to Korea to process them," he explained.

This made him realise that cashew nuts were valuable to foreigners, who often came to Cambodia to purchase them raw for export. He said to himself, "If foreigners can add value to cashew nuts, why can't Cambodians?"

"In 2016, I decided to investigate the industry further. I travelled to Thailand and saw how they were doing similar things to what we do here, by adding value to a readily available local product. Everything really started in 2019, when Covid-19 effectively shut down the tourism industry in Siem Reap. That was when I turned to the cashew business," he said.

"In 2020, while the country was closed, I ordered machines from China and Vietnam and began to process and package the nuts. At first, I set up a location in Kampong Thom, but when the country reopened, I moved back to Siem Reap. I was able to employ some villagers who were out of work, and we attract tourists traveling from Banteay Srei to Siem Reap," he added.

Phearom who is native of Siem Reap says Banteay Srei is an ideal location. He can buy and sell easily and it was able to employ villagers who live near to him. At present, he has 7 staff working with him, six women and one man. Some were previously unemployed and some were former migrant workers in Thailand.

Finan said that currently, the business was still a fairly small-scale operation, but he hoped it would grow and perhaps become the base for a large community business in the future.

"The Cashew Village is a great start, but what we really want is to encourage participation from more villagers and cashew farmers. If the farmers can find a market locally for their raw product, and if the local people can turn them into new products, then a widespread handicraft industry will spring up and benefit everyone," he said.

Phearom said Cambodia has three large cashew factories in Preah Vihear, Kampong Thom and Kampong Cham, which focus on exports to Japan, China and Thailand. Craftsmen who peel their cashews by hand cannot meet the demands of the market.

Vietnam used to set the price of raw cashews, but Phearom said his handicraft business has contributed to raising wholesale prices.

"Although my business is not large, I can at least help local farmers by buying their products for a better price than they would otherwise get. Previously, the cashews were grown just for the Vietnamese market. If the Vietnamese did not buy them, the sellers had no choice but to bring them home, sell them cheaply or leave them to rot," he said.

He explained that the production chain starts with picking cashews at the plantation. Cashews must be collected no more than two days from the time they fall from the tree to the ground, otherwise they will be spoilt. Once they are harvested his staff steam and dry them, then remove the shells. Finally, they are roasted and seasoned.

He has the capacity to roast about 1.5 tonnes of nuts per day, but because the cashews are peeled by hand – a labourious process – just 50kg a day are produced. A peeling machine would speed the work up, and he is currently exploring ways to finance its purchase. Once installed, he hopes to be able to produce at least 500kg per day.

At present, his products are only available at selected outlets in Siem Reap and Phnom Penh. His wholesale price is $9, with the recommended retail price being $11 per unit.

"Cashew nuts can be processed in many ways and it is not difficult to find a market for the finished product. We are not able to expand our business yet, as we cannot peel enough nuts. At some point, we will outgrow our facilities here, and will have to find larger premises and employ more staff, to compete in the market," he said.

Tea Kim Soth, Director of the Department of Agriculture, Forestry and Fisheries of Siem Reap Province, said that it was certainly true that processed cashew nuts were a valuable commodity. While finances and manufacturing capacity remained limited, however, it was unlikely to grow.

"‘In Banteay Srei, they are producing a quality product. Some farmers have also explored the idea of processing their own crops, but need capital. They could take loans from the banks, but are wary of the high interest rates. The department also has plans for the cashew market," he added.

Finan added that he hoped that the people in Banteay Srei district would look at the cashew plant, like palm sugar. People often processed palm sugar into sugar tablets or maple sugar to sell to tourists.

"I hope that more villagers will turn raw cashew nuts into new products. This idea has a lot of potential. If they can make and sell something in this way, they will boost their families’ finances," he added.

Phearum said he would like to create a larger production chain to meet the needs of other investors and those who wish to export.

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