Update on Say Ruos

Update on Say Ruos
Entrepreneur: Say Ruos
Location: Kandal Steung district, Cambodia
http://www.kiva.org/app.php?page=businesses&action=about&id=20198

This entrepreneur is funded by a Kiva loan administered by Maxima Mikroheranhvatho Co., Ltd. here in Cambodia. Say lives in a fertile farming area surrounding National Road 2 several kilometers south of Phnom Penh. This is the first loan she has taken out with Maxima. Her loan is being paid off on schedule.

Say and her family derive their primary income from raising pigs, growing rice and making low-strength alcohol from rice – referred to here as rice wine. They used the funds from this loan to buy feed for their pigs. She works with her husband, Run Hun. They have two children, the oldest of which, a daughter, studies in the village school.

They’ve been raising pigs for more than three years. Currently, their pens hold eight pigs – five being raised for slaughter and three they keep for breeding. After fish, pork is the most common source of protein for Cambodians. They sell the mature pigs for slaughter to a wholesaler buyer. They sell young pigs to other villagers to raise themselves.

Prior to this, I had never visited an example of Say’s other main business – rice winemaking. “Home brew” is a popular form of alcohol in many developing countries. “Brewers” typically use whatever form of grain is popular in a region, first boiling it to release the starches then adding yeast to convert them to alcohol. As a final step, they use a simple boiler to distill the lighter alcohols off of the water. The result is a clear, slightly sweet, slightly bready-flavored liquid that is about 18%-25% alcohol.

Say and Run have been doing this for about three years, as well. He learned from a cousin. He explained to us that he can make about 90 liters a week, the bulk of which he sells to people in his or neighboring villages. He sells the balance to retailers in the district market. I was surprised to learn that no special license is necessary for this kind of enterprise. Unlike my home country, the United States where any alcohol production and sales are very strictly regulated, an operation like Say’s is no different than any other small family business. Rice wine also incurs no extraordinary taxes as it would in most every developed country.

As Run showed us around the outdoor but covered production shed, I was impressed by the order, cleanliness and economy. His daughter pushed fuel, mounds of discarded rice husks, into the fire pit below the large clay oven on which sat a boiling rice kettle. Run removed the lid and stirred the cooking mash (see photo). In one area sat a half dozen 20-liter ceramic urns full of bubbling, fermenting rice mash. The air smelled very much like rising bread or pizza dough. Large, hand-made, wooden spatulas, coils of hose, screen filters and other tools hung from the rafters.

Apparently, this is a steady business for Say and Run. As economists the world-over have observed, products like beer, wine and alcohol have a low “elasticity of demand”, meaning that demand for the product fluctuates little relative to outside factors, even price. Run confirmed this saying demand remains almost constant year-round. They have had to adapt to rising rice prices. Three years ago he sold a liter of rice wine for (US) $0.28. Now they sell one for about $0.45 but business is steady.

When asked about his long-term hopes, he responded with typical Cambodian fatalism saying he generally hopes for the best but that his future is in the hands of someone greater than himself. He said he will, of course, continue to try to grow his business and try to save as much money for his children’s education as possible.

Posted by Darin Greyerbiehl from Kandal Steung district, Cambodia
Nov 19, 2007