Brewery to tap solar power for expanded beverage line
Kingdom’s economy insulated: officials
KHMER Beverages, the maker of Cambodia beer, is nearing completion of an expansion to its brewery on the outskirts of Phnom Penh that will nearly triple its production of beer and add new beverage lines, as well as what could be the largest deployment of an industrial solar panel array in the Kingdom.
The company has sunk $120 million into expanding its production facility on the capital’s southern flank, its president, Peter Leang, said yesterday during the signing ceremony of a memorandum of understanding (MoU) with local firm Kamworks Utility for the installation of solar panels on the roof of the building complex.
He said the new investment will push total capital expenditure in the beverage plant to over $200 million.
The expansion adds 2.5 hectares to the factory’s footprint and new equipment for producing both beer and non-alcoholic beverages. Partial operation is expected to begin later this week, with the remaining production lines expected to come online by March.
“We changed our name from Khmer Brewery to Khmer Beverages because we will expand our production line with a new variety of products that have not yet been launched,” Leang said.
“The new capacity for beer products will be 5 million hectolitres per year and our capacity for other products will be 3 million hectolitres, with space for an additional 2 million hectolitres reserved for further production of the new beverages that gain popularity in the market.”
The current facility, opened in 2011, has a capacity of around 1.8 million hectolitres per year, according to a company representative.
“In the previous facility, we could process 60,000 cans an hour, but the expansion will add an additional capacity of 90,000 cans an hour,” he said.
The representative added that beer cans make up over 90 percent of current production at the factory, with the remainder filled by bottles and kegs.
“The expansion will include facilities to produce a variety of beverages, including juices, bottled water and energy drinks,” he said.
“Once the factory is fully operational, we will look into producing new beer brands.”
The expanded facility will be one of the first factories in Cambodia to produce its own PET preform, the material used to produce plastic beverage bottles, Leang said yesterday. This will allow the company to have the entire plastic bottle production process in-house, reducing costs, he said.
Crowning the expanded building complex will be an array of up to 10,000 solar panels, according to Ken Bradley, utility director of business development at Kamworks. The installation, the solar energy company’s biggest to date, would allow the beverage factory to significantly reduce its power costs.
According to Bradley, the project will follow a lease model, where Khmer Beverages will purchase the energy produced from the panels directly from Kamworks.
Arjen Luxwolda, chief operating officer of Kamworks Utility, said that the exact percentage of energy the factory will receive from the solar panels has not yet been determined.
“We have seen that for the current factory that is already in operation, that 2 megawatts would fit, and since the new factory will be around 2.5 times as big, we estimate that at least 4 megawatts is possible,” he said.
Luxwolda added that facto- ries that operate every day of the year, such as a brewery or beverage plant, were currently the best candidates for solar projects in Cambodia as the continuous daytime production of energy from the panels would not be wasted on weekends or holidays. He added that for solar to really have an impact in the country, the government would need to allow companies or individuals to sell back excess electricity to the national grid through net metering.
“Net metering needs to be the issue everyone is talking about,” he said. “Without it we cannot make major progress with solar energy in Cambodia.” SPEAKERS at a government forum held yesterday on macroeconomic management and the 2017 budget law said Cambodi a’s s t r ong economic growth has been l arg el y unscathed by China’s slowdown, though clouds were forming on the horizon.
Vongsey Vissoth, secretary of state at the Ministry of Economy and Finance (MEF), said Cambodia could expect to continue on course at around 7 percent gross domestic product (GDP) growth in 2017 despite uncertainty over the health of the global economy. He said the Kingdom’s economy has been a bright spot in the world economy, weathering the effects of China’s slowdown and other external pressures.
“Our priority at this time is to maintain a growth rate of 7 percent as long as possible and distribute the achievements of the economy to all the people that benefit from it,” he said.
According to MEF projections released yesterday, Cambodia’s GDP will reach $22.3 billion this year, with the agricultural sector increasing by nearly 2 percent while the industrial sector is pegged to expand by an impressive 10.7 percent. The service sector is predicted to enlarge by 6.3 percent.
Despite the optimistic forecast, concerns were raised at the forum about the slower growth of China’s economy, US d o l l a r a p p re c i a t i o n , t h e increasing price of oil and the United Kingdom’s intention to leave the European Union.
“Slower growth of the Chinese economy could affect Cambodia’s economy especially in the trade and financial s e c t o r s ,” s a i d C h h e a n g Vanarith, director of the macroeconomic and fiscal policy department at the MEF. “The increasing price of oil will affect the cost of goods in the market because Cambodia has to import all of its oil.”
The forum comes a day after the National Bank of Cambodia released its annual report, which reported a surge in foreign direct investment (FDI) despite a feared slowdown in investment from China.
Total capital inflows of FDI topped $2.15 billion in 2016, a 25 percent increase over the previous year, according to the report.
China remained Cambodia’s largest source of FDI last year, contributing $511 million, with another $237 million coming from Hong Kong.