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Cambodia ready for the next generation of Malaysian investors

Brian Badzmierowski / Harrison White

Malaysian business representatives have identified Cambodia as the next market destination for Small and Medium Enterprises looking to expand and attract the next-generation of Malaysian investors.

A recent trade visit of 36 Malaysian companies to Cambodia was organized by SME Association of Malaysia and the Malaysian Business Chamber of Cambodia (MBCC) in collaboration with Malaysia External Trade Development Corp and supported by the Royal Embassy of Cambodia to Malaysia.

In addition, the Council for Development of Cambodia and the ASEAN Business Association were also involved in an SME matchmaking event hosted at NagaWorld – owned by Malaysian businessman Ten Sri Dr. Chen Lip Keong.

The ASEAN Business Association formed an associate partnership with the SME Association of Malaysia and supported this event to promote business opportunities between Cambodia and Malaysia.

Malaysian investors have been a driving force since the 1990s in Cambodia, considered first-generation investors when the Kingdom opened up to international trade and began rebuilding its economy.

Since 1994, the Council for the Development of Cambodia has approved a total of 162 qualified investment projects from Malaysia with an approximate investment value of $3.15 billion.

To read more about FDI in Cambodia click here.

Growing a strong foundation

Speaking to Cambodia Investment Review, Okhna Tan Khee Meng President of the Malaysian Business Council of Cambodia (MBCC) outlined the need for new or “second generation” investors to continue growing the strong base that previous Malay investors have established over the last 30 years.

“Cambodia is a fantastic destination for Malaysian investors with three of the most favorable aspects being: a dollarized economy, 100% business ownership for foreign investors, and no capital control,” he said.

The event hosted well known Cambodian official and prominent Malaysian investors.

He recommended potential investors undertake due diligence and work with internationally recognized firms and undertake best business practices when in Cambodia. Adding, “MBCC is always open to assist both Malaysian and international investors”.

“My tip for new investors would be to focus on value-added processing as well as construction and manufacturing standards. Cambodia is currently undergoing major development in its process and standards and I feel that Malaysia would good benchmark for Cambodian firms to adhere to,” he said.

Ross Wheble, Cambodia country head at real-estate advisory firm Knight Frank told Cambodia Investment Review that Malaysian FDI continues to contribute to the development of Cambodia with the construction of power plants in Sihanoukville, improving access to electricity and helping to bring down costs.

“Knight Frank Cambodia was founded in 2008 by the shareholders of Knight Frank Malaysia, and we remain majority-owned by Malaysians. We were invited here by the Ministry of Economy and Finance to help form a regulatory body for the real estate sector, and have continued to assist the government in all areas of real estate,” he said.

Malaysian SMEs pitch their products

In addition, to networking dinners, the trade delegation also hosted an SME matchmaking session which featured over 36 Malaysian companies and 300 Cambodian companies represented in person.

Speaking at the matchmaking session Secretary-General of the Council for Development Sok Chenda Sophea said his country is doing all it can to attract foreign direct investment and the New Law on Investment offers a range of tax exemptions, including full tax exemptions for between three and nine years.  

To read more about the new Law on Investment click here.

Many of the business owners told Cambodia Investment Review that the country appeared open, inviting, and a stable environment to do business with many companies were eager to get their foot in the door.

Photographer and entrepreneur Patrick Low was one of the many Malaysian businesspeople to make the trip for the event and said he sees potential for developing business through social media education in Cambodia.

“Content is more valuable than ever and I want to play a role in changing how social media and advertising is used in Cambodia. Technologies like augmented reality could play a pivotal role as Cambodia hopes to expand its business influence in Cambodia,” he said.

A young businessman and his father pitched their small dome-like homes made out of polystyrene made by their company LBS. The small enclosures can fit a bedroom, a bathroom, and a kitchen, and only take two hours to set up the home’s shell.

Malaysian and Cambodian SMEs pitch their business ideas.

LBS founder Dato Ban Seng Law said his goal is to offer the fastest-built home in the world, adding that it currently takes about two weeks to fully outfit one of the homes. The products will officially launch in July and the father-son pair are hoping they can make a splash in the Cambodian market.

Loh Yean Jie, a Malaysian businessman who has been operating for several years in Cambodia, was exploring food and beverage options. His main company, Khmer Angkor Plastic, produces plastic pipes used for large infrastructure projects.

Jie said Cambodia is full of opportunity, but only for the right products. He said consumer priorities are shifting in Cambodia and it’s sometimes difficult to predict coming trends. Recently, he said, there’s been a priority placed on higher-quality products. 

“Cambodia is definitely a growing country. If you talk about making money, it’s about whether you are bringing in the right product,” he said.

A focus on safety

Everything from isotropic drinks and teas to fire extinguishers and safety goggles were also on display in the ballroom.

Michelle Hah, the executive director of Fire Fighter, a fire safety equipment company, said Cambodia’s fire safety regulations weren’t up to par and she was on a mission to change that. Besides manufacturing and selling the extinguishers, the company offers training and maintenance as well.

“It’s very important, we’re talking about saving lives,” she said. “There’s a lot of potential for us, it’s a good time to come and explore the business environment here. We notice Cambodia is growing very fast and with RCEP, it will grow faster.” 

Dato Ngai Mun Lee and Datin Cindy Choh of Proguard are looking at opening a factory in Cambodia.

Datao Ngai Mun Lee, the chief operating officer of safety equipment company Proguard, said he was lured by low labor costs and incentives for foreign direct investment when he made his decision to travel to Cambodia and explore his options.

Pointing to the stitching inside his injection-molded safety helmets, he said assembling his products requires lots of handiwork, and he’s interested in opening a factory in the Kingdom. One problem, he said was the potential power supply issues in Cambodia. He said if a short were to occur, he could lose a lot of product.

Peter Khom, a marketing officer with the Malaysia External Trade Development Corporation, said the event had been a success and was hoping there would be some deals made in the soon future.

“All in all, we’re happy to see 36 Malaysian companies and 300 Cambodian companies represented,” he said. “Hopefully by next week, they’ll send some samples and discuss prices.”

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