Worldbridge i4.0 SME Cluster ready to transform manufacturing in Cambodia

Harrison White

The Worldbridge Group is in the final stages of completing its ‘game-changing’ i4.0 SME Cluster site development located in Kandal province with the project aiming to facilitate Cambodia to leapfrog into modern and responsible manufacturing practices.

The site will primarily host agro-processing facilities, waste recycling and eco-friendly packaging and offer full incubation to production services. The project that first broke ground in late 2019 was expected to be complete in late 2021 however after minor delays due to the COVID lockdowns last year is now expected to be complete in early 2022.

Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data.

According to the company it is already engaged in discussions with its first tenants to facilitate their current and new higher-value production lines for export markets across the region with rents per square meter starting at $2.25 for production spaces with a monthly management fee added for 24/7 access to the facility’s numerous infrastructure, services and amenities offerings.

Each octagonal module provides 566sqm of factory floor, 288sqm of multi-level office space, 162sqm of open yard and 81sqm of loading dock with tenants able to easily join new modules as they expand their production.

The cluster will also include a logistics and services center that will provide domestic transport, import-export clearance, on-site customs, cold storage packaging, compliance services, business linkages facilitation, technology transfer, and access to finance.

In addition to the logistics and services center, there will also be utility building that will provide the tenants with access to reliable clean energy and wastewater treatment systems.

Charles Esterhoy presents the project during ground breaking in 2020.

i4.0 SME Cluster and Cambodia’s leapfrogging capabilities

Charles Esterhoy CEO of Worldbridge Industrial Development told Cambodia Investment Review during a recent site visit the SME cluster will revolutionize the way Cambodian manufacturing operates and the current perception of what Cambodian manufacturing is.

He added, unlike special economic zones, industrial parks or traditional SME clusters – the i4.0 SME Cluster is an innovative solution that supports government objectives Industrial Development Policy for 2015-2025.

Under the policy, Cambodia aims to transition from a labor-intensive industry to skilled-labor industry by achieving three main goals.

These include increasing the share of the industrial sector in the country’s GDP to 30 percent by 2025, promoting the diversification of exported products besides garments and boost the export of processed products, and support SMEs.

The industrial development policy is a key driver for the country to achieve its ambitious aim of a middle-income country by 2030 with Cambodia expected to lose its current trade benefits under the LDC program when it is forecast to graduates in 2028.

“Global manufacturers, value chains and logistics are now being challenged to transform their business models to overcome the “three new normals” faced today where cooperative and competitive value chains, product innovation and market opportunities are accessible, sustainable practices and worker well-being will become paramount. Our i4.0 SME Cluster will allow Cambodia to leapfrog away from its current industry 2.0 environments and mindsets” Esterhoy said.

“We have also approached the project with sustainability, transparency and workers’ needs in mind from the outset. The site will also be open for the local community to use for startup services and business development” he added.

The location is strategically located 16KM from Phnom Penh and close to the new Ring Road 3 and new Phnom Penh International Airport.

Impact investment and sustainable development in Cambodia

The project has also partnered with sustainable investment and eco-system building firm Platform Impact that nurtures companies form incubation to production as well as ensuring they adhere to Environmental Social and Governance (ESG) guidelines.

Natharoun Ngo Co-Founder of Platform Impact told Cambodia Investment Review that the SME cluster was not just unique in design but also because of the collaboration with impact investors.

He added, ensuring companies meet certain ESG standards is now a basic requirement for many local and overseas investors as well as development organizations.

Platform Impact specializes in ESG-centric investments and has over the last few years and has built a $200 million portfolio. The firm seeks to build, develop and empower new breeds of enterprises generating financial returns while also creating long-lasting positive social or environmental impacts

“To meet the increasing consumer demands for corporate responsibility, Platform Impact is partnering with WorldBridge Group to pioneer Cambodia’s first i4.0 Cluster enabling the development of transparent, inclusive and ethical supply chains from Cambodia to the World; through deep cooperation between local SME and international companies,” Ngo said.

“Cambodia can change the current narrative around what is possible for local companies to achieve both in terms of production as well as the conditions under which those products are produced,” he added.

The cluster has been designed with easy to install ‘plug and play’ modules.

The Worldbridge Group ongoing investment in Cambodia’s development

Initial investment in the site has been reported to cost $28 to $30 million, excluding the price of the six hectares of land it sits on with an estimated 26 more sites planned around the country in the coming years.

The site is also located next to the affordable housing development project “Satellite Serei Mongkul City” of Worldbridge Homes Co Ltd, another subsidiary of Worldbridge Group.

The Worldbridge Group is one of Cambodia’s largest conglomerates headed by Neak Oknya Sear Rithy who has been a pioneer in Cambodia’s development since the early 1990s.

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