Promoting Sustainable Rubber Production, Trade and Investment in Cambodia and Vietnam

Download PR in Khmer

Phnom Penh, March 27, 2025_Vietnam and Cambodia are closely connected through investment into and trade of natural rubber (NR). Cambodia is Vietnam’s most important destination for investment in NR production and Vietnam’s key NR exporter. Vietnam Rubber Group JSC (VRG) is the leading investor in NR in Cambodia, currently with 16 rubber plantation projects covering nearly 90,000 ha and 7 processing facilities in Cambodia. Other Vietnamese companies, both state-owned and private ones invested in NR production in Cambodia too. Vietnam’s customs data shows that in 2024 Vietnam imported nearly a million tons of NR from Cambodia, or over 64% of Vietnam’s total imports, worth over US$1.2 billion. The volume of Cambodian import almost equals Vietnam’s domestic production. 

China is Vietnam’s most important export market for NR. Most of the NR produced in Vietnam and imported from Cambodia is exported to China. In 2024, Vietnam exported 1.45 million tons of NR to China, valuing US$2.4 billion. Other Vietnam’s essential export markets include the EU, US, Korea, and Japan. While there’s no available information if NR from Vietnam imported to China gets its way to the EU and other markets, anecdotes have indicated that a proportion of the China’s import is destined to major markets in final products such as tires and threads.

Major consumer markets such as the EU and US are adopting increasingly stringent requirements on the legality and deforestation-free concerning the products imported into these markets. In 2023, the EU passed the Deforestation regulation (EUDR) that bans seven products, including rubber, if the production of these products causes deforestation. Importers in the EU are required to ensure their products are legal and deforestation-free. Products need to be traceable back to the specific plot of land where they are grown. It is expected that increasing legality and sustainability requirements will be widely adopted in major markets in the future.

Phan Tran Hong Van, a representative of VRA, said, "Vietnamese companies operating in Vietnam and in other countries, including in Cambodia, are taking vigorous steps to comply with market requirements. The EUDR presents both opportunities and challenges for our sector. Companies with available resources and a strong foundation in quality and environmental management standards will have an advantage vis-à-vis those without. Also, the current supply chains are quite complex, involving layered traders and many smallholders. Traceability is challenging.” 

Phuc To at Forest Trends, said, “Interconnected nature of production and trade of NR in the Mekong region and particularly between Cambodia and Vietnam further complicates the supply chains. Vietnam plays a unique role in the production and trade of and investment into NR in the region. The current pattern of production and cross-border trade of NR between Vietnam and other countries in the Mekong makes it challenge if not impossible to trace the product along the supply chains.” 

Initiatives to clean up the supply chains are being implemented at different scales. In Vietnam, the government has been working closely with rubber (and also timber and coffee) sector in preparing for EUDR. New policies have been formulated and resources mobilized to prepare rubber companies to meet the EUDR. Rubber companies both state-own and private are trying to clean up their supply chains. Mai Vinh, a private company in Vietnam now is collaborating with more than 3,000 smallholder rubber growers in producing EUDR-complied NR for European buyers. 

“Working with a large number of smallholders is hard, but we have no other option but collaborating with them. They are our backbone,” said Ms Mai who leads Mai Vinh. 

According to a representative of Chu Se Kampong Thom Rubber JSC, the state-owned Vietnam Rubber Group has been supporting their members, including those operating in Laos and Cambodia in preparing for the EUDR. Chu Se Kampong Thom stands out as a best-practice model for comprehensive EUDR compliance. With 16,000 hectares of rubber in Cambodia, the company has invested heavily in digital technology to improve plantation management, and to enhance transparency and traceability throughout the supply chain. 

However, so far little effort has been focusing on cross-border aspects of trade of NR among the Mekong countries and between Vietnam and Cambodia particularly. “Understanding these cross-border aspects has huge implications for EUDR said Phuc To of Forest Trends. 

Ms. Sophoan Phean, National Director of Oxfam in Cambodia, said, “While the implementation of EUDR is likely to drive significant change in how rubber is produced, sourced and traded, and promote sustainability in the rubber value chain, smallholder rubber farmers risk being marginalized if they lack the capacity to adapt or access adequate support. This requires collective efforts from stakeholders from the government, private sector and NGOs,” 

She added “Oxfam is working closely with General Department of Rubber of the Ministry of Agriculture, Forestry and Fisheries, local and international organizations to develop Cambodia Sustainable Natural Rubber Guideline, localize Community Engagement Handbook from Vietnam to Cambodia context, provide skill training on Community Engagement and Gender Equality to member companies of VRG in Cambodia and Vietnam. Moreover, Oxfam and its partners support the mobilization of small-scale rubber producers, empowering them to negotiate latex price with traders and fostering solidarity and knowledge sharing in the field.” 

Given the interconnectedness of Cambodia and Vietnam around the production and trade of NR and the emergence of deforestation-free regulation from major markets, it is crucial to get a common understanding of the current supply chain of NR between the two countries. On 27 March 2025, a workshop titled “Promoting Sustainable Rubber Production, Trade and Investment in Cambodia and Vietnam” was organized for this purpose. The workshop—co-organized by three organizations: Oxfam in Cambodia, The Viet Nam Rubber Association and Forest Trends—takes place in Phnom Penh, Cambodia. 

The workshop aims to provide a better understanding of rubber production and trade of and investment into rubber in each country of Cambodia and Vietnam; to inform relevant stakeholders from both sides regarding the current supply chains between the two countries, including the legality and sustainability aspects of these chains; to discuss legality and/or sustainability risks associated with the production and trade of and investment into rubber in each country; and to explore the opportunity for future collaboration to facilitate legal and sustainable production and trade between the two countries. 

Participants of the workshop include representatives from rubber planting and processing companies from Cambodia and Vietnam, development agencies, research institutions, NGOs, rubber smallholders, and other stakeholders involved in rubber trade and sustainability.