The International Business Chamber of Cambodia (IBC) and the Cambodia Logistics Association (CLA) held their first networking event, fresh on the heels of the formation of the IBC Supply Chain Working Group.
The working group is headed by Parth Borkotoky, the CEO of Azaylla, Borkotoky said there’s enormous potential in Cambodia to grow its export business, but the supply chain needs to be strengthened.
“There’s potential. I feel enormous opportunity in the country, everything is growing. FDI is coming in, foreign investors are interested in Cambodia,” he said.
Borkotoky’s cold storage warehouses in Phnom Penh allow him to get an edge in a market where cold storage is a problem. Azallya buys produce from farmers throughout Cambodia and distributes their goods to supermarkets and retail outlets mostly based in Phnom Penh.
During Covid, Azaylla grew even bigger as supermarkets demanded their shelves stay stocked while suppliers struggled to meet that demand. Borkotoky said the IBC working group was organized to bring together logistics companies and potential clients to work on solutions together.
IBC and CLA create a unified voice
Combined with members from the CLA, the two groups represent a strong voice to negotiate with the government on issues such as taxes and different regulations surrounding logistics in Cambodia.
A voting board where members chose their most pressing problem in the industry revealed the lack of testing labs and value-added services to be the biggest problem in the industry.
To read more the increasing cost of shipping in Cambodia click here.
Katherine McLean, the executive director of the IBC, said the event was part of an effort to bring together two different sides of the logistics industry, to connect members on each step of the value chain.
“We’re doing this event in conjunction with CLA because they have a broad membership and we want to work together rather than compete. We should be sharing ideas and collaborating,” she said.
Overcoming obstacles together
Okhna Sin Chanthy, the managing director of Linehaul Express and CLA President, said there are several logistics issues facing companies in Cambodia including gas price spikes due to the Russia-Ukraine War and freight containers stuck in the US.
Sandro Batista, the general manager of Bollore Logistics, said as infrastructure improves, it will make his job easier. He said traffic and the lack of safety on roads currently make it difficult to transport large shipments in some cases, this should change in the future.
Peter Pal, the managing director of Maple Global, said there were some negative factors influencing the logistics sector, including the world’s economy facing rising inflation, the threat of war, and geopolitical events shaping global trade.
Despite the hurdles, the logistics sector in Cambodia looks bright. Many attendees noted the importance of RCEP as a means to open up more trade opportunities.
IBC Chairperson Paul Clements said the event was a perfect opportunity to explore potential opportunities together, as IBC lists members across the entire supply chain and by connecting them with logistics providers, harmonious solutions could be implemented together.
“We focus on sectors where we believe there’s opportunity. The supply chain in Cambodia is full of opportunity, from production to the table,” Clements said.
“There’s a big focus on agriculture. We have to fix the whole value chain and make business easier to do here. Through collaboration and careful planning, we can strengthen the supply chain and create a more stable and productive business ecosystem.”