New Executive    
We welcome a new Associate Partner to Leopard Capital's full time team in Phnom Penh to strengthen our value addition capabilities for our portfolio companies.  Brian Erskine has 15 years of operational, investment, and consulting experience in North America, Europe, and Asia. In Asia, his background covers the transportation, retail, manufacturing, aviation, education, and agriculture spaces. His overall experience encompasses risk management, asset management, strategy, business development, and corporate finance, spanning multiple industries and companies including Mercer Management Consulting, General Electric, Downtown Associates, PPG Industries, Masan Group, and Vietnam Investments Group. He earned an MBA in finance from the Wharton School at the University of Pennsylvania and an AB with honors from Harvard University, and holds the Investment Management Certificate from the CFA Society of the UK and the Treasury Management Certificate from the Tepper School at Carnegie Mellon University. Brian is fluent in French and conversational in Vietnamese.

Frontier Public Equities

Leopard Capital has created a new group subsidiary, Leopard Capital Management Ltd., which will specialize in public equities in Asian frontier markets. Qualified investors may request info at:

[email protected].

 

Emerging Frontiers Blog

Please visit our new blog covering investment, business and economic news in the emerging frontier markets we like most.

www.emergingfrontiersblog.com.

Annual Meeting and Myanmar Trip

Limited Partners and probable future investors are invited to attend the Leopard Cambodia Fund 2012 Annual Investors Meeting on May 25th at the Raffles Le Royal Hotel, Phnom Penh. The General Partner will meet on May 24th.  We will also organize an optional side trip to Yangon, Myanmar (Burma) from May 21st  to 22nd, 2012. 

To obtain more details and secure your spot please write to Marina, [email protected]

 

Travelogue: "Mondulkiri - The Road Less Traveled", by Michael Hodgson   

 

Most visitors to Cambodia will tour the riverfront capital, Phnom Penh, and become familiar with Siem Reap's lively hot spots on Pub Street after exploring the ancient monuments of Angkor. Few however find their way into Cambodia's remote provinces such as Mondulkiri. One of my Cambodian colleagues at Leopard inspired me to make the 8 hour journey from Phnom Penh.

 

Mondulkiri Province abuts the Vietnamese border in Cambodia's Northeast. Although it is physically Cambodia's largest province, it is also the most sparsely populated with only three inhabitants per square kilometer. Little is known about Mondulkiri's history prior to French colonization in 1864 which led to the first dirt road being hacked through the malaria-plagued jungle to the provincial capital, Sen Monorom. The province's tribal inhabitants earned a fearsome reputation and a posting to the province was probably the last thing a colonial administrator would have wished for. Later, during America's Vietnam War, the Ho Chi Minh Trail ran though Mondulkiri and its unfortunate natives, who had nothing to do with that, were carpet bombed. Until a decade ago Mondulkiri was the last bastion of an ethnic minority guerilla group, FULRO - the United Front for the Liberation of Oppressed Races - which fought against outsiders of all ideologies.

 

It was only recently that the 127 km final section of the road to Mondulkiri's capital was paved, courtesy of a soft loan and construction crew from China. As a result of its former isolation, the province remains steeped in the past with over 80 percent of the population belonging to one of the ten tribal minorities. Whilst some of the hill tribesmen have taken jobs in the capital "city" or smaller towns along the road, the majority have remained in close proximity to their place of birth. Due to their animist beliefs, these tribesmen retain a spiritual connection to the land and subsist in the traditional manner of their ancestors, gathering fruit and wild honey, hunting game in the forests, and carrying out slash and burn agriculture techniques closer to home. Few are literate or can speak Khmer, increasing their isolation.

 

While the region's hilly terrain does not lend itself to large-scale rice production, it is well-suited for growing rubber, cassava, coffee beans and cashew nuts. Cassava has of late been a success story in Cambodia with many farmers turning to the crop from less lucrative ones. Rubber is also attracting attention particularly from Vietnamese and other foreign investors. Cambodia currently has 100,000 hectares of mainly small, family-run rubber plantations with an additional 60,000 hectares of larger scale plantations under cultivation. The government's goal is to increase that figure to 300,000 hectares by 2020. With its rich red soil and relatively few people to relocate, Mondulkiri is attracting rubber investors. The French/Khmer Socfin KCD venture was awarded one such concession but encountered resistance from the local Phnong tribe which held a traditional ceremony to curse the company and make it "vanish like a dead pig." The curse does not seem to have had the desired effect, as the project continues.

 

Apart from such cash crops, the province produces a variety of agricultural products for domestic consumption such as bananas, sweet potatoes, and (rather surprisingly) strawberries and avocados. Some of these could potentially be expanded into larger commercial production. Due to its elevation Mondulkiri enjoys a cooler climate than most of Cambodia, somewhat akin to Vietnam's Dalat which produces specialty crops while serving as a domestic tourism mecca. Mondulkiri's pleasant climate, rolling hills, thick forests and gushing waterfalls render it a suitable destination for eco- and adventure tourism. Its proximity to Vietnam has spawned casinos near a newly opened border crossing. The road to those casinos is currently under construction and skirts past lonely hill-tribe villages and along magnificent stands of bamboo.

 

Mining exploration is a burgeoning industry. The Chinese mining company Zhong Xin Industrial Investment is currently excavating three mines as deep as 500 meters in the Memang Gold Mines Area. Vietnam's Vinacomin is exploring for bauxite in Mondulkiri, after BHP Billiton and Mitsubishi withdrew from the Province. The Australian group Oz Minerals recently sold its gold deposit claims in Mondulkiri to Renaissance Minerals for $17.8 million. ASX- listed Brighton Mining has reportedly acquired gold properties in Mondulkiri, and Liberty Mining is believed to hold claims; the list goes on.

 

At risk from Mondulkiri's ability to deliver agricultural produce and minerals is its important role as a wildlife habitat. In 2002, the government designated 400,000 hectares as part of the Mondulkiri Protected Forest (MPF). The area is home to a small number of tigers, clouded leopards, the rare fishing cat and the kouprey. Other fauna include the critically endangered Siamese crocodile, which is found in tributaries of the Srepok River within the MPF, the Irrawaddy Dolphin, and the world's largest remaining population of black-shanked douc, an endangered monkey.

 

Slightly easier to spot are Mondulkiri's elephants. Cambodia is home to over 600 wild elephants and 100 domestic elephants, half of which call Mondulkiri home. For those interested in owning their own pachyderm, the average cost of a domestic elephant is US$13,000, with some younger elephants fetching up to three times that amount. The Elephant Valley Project (www.elephantvalleyproject.org) is an elephant sanctuary on the outskirts of Sen Monorom that was established several years ago by a young Englishman, Jack Highwood. The purpose of the sanctuary is to provide veterinarian treatment and care to a small herd of sick and mistreated elephants. The sanctuary has recently acquired a new addition, Ruby.

 

Jack regaled a group of us one evening, against a soundtrack of barking deer calling in the valley below, with a curious tale of how the global economic crisis had affected elephants in neighboring Thailand. Thai law allows mortgages over certain types of movable as well as immovable property. Included within the movable category are elephants. Some Thai logging camps near Chiang Mai were so completely indebted to their lenders that when the banks came to foreclose on their assets, they ended up owning herds of elephants. The banks sought to offload the elephants as a "job lot" and Jack was interested in buying them and establishing a similar center in Thailand. But before he could raise the funds, the lot went to a local tycoon who apparently fancied owning his own herd of elephants.

 

Along the long journey from Mondulkiri back to Phnom Penh, I absorbed the rich biodiversity, the poverty and the economic opportunity the province has to offer, and was left with a sense of cautious optimism. Economic development is sweeping through Cambodia and will continue to spill over into this province. Investing in Mondulkiri, particularly in its agribusiness, eco-tourism and mineral extraction, will deliver needed employment opportunities along with improved social and physical infrastructure. However the related demand for land could reduce Mondulkiri's natural forest cover and deplete its endangered wildlife, while eroding the traditional culture of the ten hill tribes. Clearly a balance must be found. Early investors will have the unique opportunity to establish responsible investment precedents that both preserve and provide resources to Mondulkiri Province.

 

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Leopard Cambodia Fund, LP  

USD 34,135,000

G5458L102

003811078

LEOPARD KY

65096323

Leopard Cambodia Investments (BVI) Ltd. 

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003884357

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