September 23, 2022
PHNOM PENH – Several current and former Cambodian migrant workers in South Korea have combined their capital and expertise to launch Veha juice – a new enterprise which aims to process locally grown fruit into preserves and canned drinks in a bid to promote the Kingdom’s farmers and introduce local products to international markets.
Keo Kosal, one of the co-founders of Veha Juice, completed his work contract in South Korea and returned home in 2020, during the global Covid-19 pandemic.
“There are seven co-founders. We got to know each other when we worked in Korea, and that was when we decided to form this company,” the 30-year-old told The Post.
“Currently, there two of us are running things in Cambodia – the others are still working in South Korea,” he added.
Originally, the group intended to set up a company which would import second-hand cars. The business was too time-demanding however, so they looked for a different opportunity.
“We knew that agricultural crops were an existing product of the Kingdom and that the country wanted to promote them. We decided to open the Veha Juice Company to support the farming sector,” he added.
The company was established in 2019, and has permits to process all kinds of fruit and vegetables.
The group began to market its products in mid-2020, when it introduced dried longan and longan jams. Pineapple, dragon fruit and mango were produced as jams between the end of 2020 and 2021.
In mid-2022, the company launched its latest product – Pailin canned longan, which was developed from fresh longan syrup in glass jars.
The production facility employs about 20 people who work from product to another.
“For example, one day we produce dragon fruit jam and then we switch to mango. We process them in a consecutive manner. This means they have work to almost every day,” said Kosal.
The factory in Poipet town’s Nimitt 1 village is supervised by another co-founder, Sum Savong, while the other co-founders are working in South Korea.
“Our company is very young. We don’t know if there is enough work to justify all seven of us working on it just!” he added.
Today, they earn just enough to cover staff costs and factory expenses. The company is trying to achieve its goal of turning its potential into profitability. This would also increase the amount of produce they could purchase from local farmers.
“We have not yet entered a large international market, but we are trying to find markets at home and abroad. Once demand increases, we will be able to place far larger orders with farmers,” he said.
In the local market, their jams and canned goods are available in marts, most noticeably Tela gas stations.
“Some local supermarkets are not yet carrying our products. Once the demand is there, we have the facilities to produce as much jam as we want,” said Kosal.
Overcoming challenges
Two complications are the fact that their products are seasonally produced and the unpredictable demand from retailers. Tonnes of products made with longans were produced at the beginning of the season and quickly sold out however, which was promising.
“Because we aim for pure natural products, we do want to use preservatives. This means we don’t want to have products standing and waiting for orders. We manufacture according to customer orders. With just a few days notice, we can produce the freshest possible goods,” he said.
Unlike many other canned products, he claimed very few sweeteners were used, meaning they were a healthier product than those of many of their competitors.
The fruit jam was originally sold for 6,000 riel, but later the prices for a 55-gram package were reduced to just 3,500 riel.
Canned products such as syrup made from fresh longan cost from 4,000 to 4,500 riel per can, depending on the location.
“Our products are not expensive. They are priced similarly to our competitors, at affordable prices,” said Kosal.
He admitted that they faced stiff competition from imported competitors. Another difficulty is finding ways to increase demand. As fruit jams and canned fruit are non-essential items – and nor are they part of regular daily meals – they require more marketing, as befits ‘treat foods’, or luxury products.
“Some products are ones that everybody needs, so moderate promotion is enough. We, on the other hand, are selling something which is a luxury. There are also many imports and even domestically produced products that compete directly with us,” he added.
He also acknowledged that their manufacturing process was not where it needed to be. The company was looking for collaborators to introduce solar energy and peeling and drying machines.
“We are currently peeling our fruit by hand, which is not as efficient. We also employ an electric oven for drying our fruit, so our overheads are very expensive,” he said.
“Once we are employing solar power to dry them, we will be able to move to a larger location and the flesh of the fruit we dry will be of higher quality,” he added.
Veha Juice, meanwhile, plans to shift its strategy from seasonal to mass production, offering a wider range of products.
“If we can combine the fruit that we process to make a jam, for example, we will be able to complete larger production runs,” he said.
Unlocking international markets
With the assistance of USAID, Veha Juice was invited to showcase its products in 10 countries, including China and South Korea.
“We have also collaborated with a local company to supply whole fruit to China. They did not take the fruit packaged, but orders tons of longans to pack there,” he said.
He expected that the company would soon sign a large contract which meant they will be able to increase the supply of domestic products in large quantities. Currently, domestic sales were distributed individually into each of the 25 capitals and provinces.
The 25-year-old exclusive distributor of Veha Juce in Siem Reap, Sam Chaiwong, said the fresh canned longan had sold better than the jams because they are made from healthy sugar and not artificial sugar.
“Ours is not very sweet, as we use only very moderate amounts of healthy sugar,” she said.
She added that during the Khmer New Year, consumers had bought fresh canned longans as presents when they had visited their hometowns.
“We put the canned logans into the refrigerator to eat cold. They are delicious, and the old people like to eat things which are just a little bit sweet,” she said.
She had observed an increase in demand for eating fruit at home, thanks to the support of several organisations and ministries which helped promote the products and held exhibitions.
After an early September exhibition of Khmer products on Koh Pich, Chaiwong said that Veha Juice had produced and packaged canned fruit in two flavours to judge the tastes of consumers.
“We selected the most popular formula as the basis for our production run,” she added.
In addition to processing longans, dragon fruit, pineapple and mango, Kosal said he planned to add more fruits and vegetables to the production chain in the future.
“We can obtain permits to process all fruits and vegetables, so we should take advantage of that. For example, if we want to add lychees or rambutans, we just need to write a letter to the authorities and we can add more products,” he explained.