business

Coconut-based Social Enterprise Ravaged by Covid

The owner of Coco Khmer has spoken of his struggles to rebuild business after the pandemic crippled operations just weeks before the social enterprise’s international launch.
Coco Khmer products on display at Odom Garden in Phnom Penh
Coco Khmer products on display at Odom Garden in Phnom Penh

Cambodia’s premium producer of high-quality virgin coconut oil and coconut-based products, Coco Khmer, has been severely hit by the Covid-19 pandemic.

“Two years of Covid has almost ended an incredible eight-and-a-half-year journey,” said founder Robert Esposito, as he told Kiripost of the struggle to rebound business.

Building upon a solid foundation in triple bottom line economics, Coco Khmer is a social enterprise that finds value in a closed-loop production cycle while establishing business and a sustainable future for the women of Boeung Kak Lake in Phnom Penh and the community of Toch Village in Kampot.

Harboring a passion for coconuts, the 51-year-old from Canada made it his mission to produce high-quality coconut-based products. In 2013, he launched his small social enterprise.

“With a $2,500 investment and a small team of dedicated women, who had previously never made more than $2 a day nor had a job longer than three months, we boot-strapped Coco Khmer, Cambodia’s first commercial producer of virgin coconut oil and 100 percent natural skincare products,” said Esposito.

He added that the women who attended training had the opportunity to talk with their peers, and formed a strong bond and sense of community when coming to work together.

Heap La, 43, was among the first women to be trained and recruited to the ranks of Coco Khmer, which went on to grow from six to 34 staff. She then received further training to become operations manager. However, during the two years of Covid, the shop and production line were closed. This meant the workforce had to be cut.

Robert Esposito (left) and Heap La at their storage site in Phnom Penh
Robert Esposito (left) and Heap La at their storage site in Phnom Penh

“He taught me how to make coconut oil and products with his recipes,” La said. “During Covid, we got Covid and closed. I did not go to work. It was very difficult for me. So difficult, I had to spend a lot. I had no job. I just recently returned back to work. I had stayed at home for so long.”

When Coco Khmer started in 2013, according to Espositio, only 20 percent of products were good enough to meet the standards he had set.

“I made a commitment,” said Esposito. “When we first started, if we were going to make a product, it had to really be the best quality. We want to be able to have people come to Cambodia and try the oil and think that Cambodia is a place as a coconut oil producer. It’s just not a place of poor-quality oil. We spent a lot of time focused on quality.”

Esposito added that Coco Khmer continued to make progress, and in 2018 sales increased and the team was given classes in Cambodian literacy and English, as well as had their medical expenses paid for. At the beginning of 2020, Coco Khmer had gained international interest for distribution and was one month from its first international launch event in Singapore.

“Then Covid hit me like a punch in the face,” said Espositio. “The market just dropped and dropped. Then also, you know, the shopping habits of people changed. There was a dramatic demand for food storage, masks and alcohol sanitizer. The stores said they are not ordering more of our products.”

The pandemic caused more than 30 staff to be laid off during the peak. La recently returned to work this year.

She was struggling to regain employment during Covid. However, she eventually found a job as a dishwasher at a restaurant, working from 1pm to 1am, seven days a week with two days off a month. She earned less than $200 per month, according to Esposito.

In February, Esposito started a GoFundMe campaign in a bid to rebuild Coco Khmer.

The campaign has raised $3,160 from 32 donors out of a $8,500 goal, as of May 23, 2022.

Lip balm, Naga balm, and facial serum - Coco Khmer new skincare line
Lip balm, Naga balm, and facial serum - Coco Khmer new skincare line

According to World Bank data, in 2020, the Covid-19 situation had a negative impact on three major areas of Cambodia's economy: tourism, manufactured exports, and construction. Together, these sectors accounted for more than 70 percent of the country's economic development. In 2019, they jointly produced 39 percent of total paid employment.

“Amid eased mobility restrictions, economic recovery is underpinned by a strong rebound in manufacturing, especially the garment, travel goods, footwear, and bicycle industries, and agriculture. Meanwhile, the recovery of the service sector and, especially, tourism -- an important source of employment -- remains sluggish,” said the World Bank report.

At the stage of recovery, Esposito said his future plan is to first increase sales to rehire staff. He then plans to continue Coco Khmer’s growth to move beyond personal care coconut-based products and launch its all-natural Home Essentials & Green Cleaning line.

“The thought of my team, their families and the impact we had is what kept me motivated. I couldn’t quit and I couldn’t fail them without fighting to the end. With what little energy I could gather, I made a plan to revive the business. I spent time researching and formulating new products, meeting with people, and thinking about how I could rebuild,” Espositio said.