Cambodia Investment Review

IBC ‘Industry Views and Outlook for 2024’: An Overview of 10 Major Sectors in Cambodia (Part 1) 

IBC ‘Industry Views and Outlook for 2024’: An Overview of 10 Major Sectors in Cambodia (Part 1) 

Cambodia Investment Review 

The International Business Chamber (IBC) hosted its flagship bi-annual economic outlook, “Industry Views and Outlook 2024,” gathering ten industry leaders to forecast Cambodia’s economic trajectory over the next 12 months and beyond. 

The outlook following the World Bank’s revised growth projection for 2023 to 5.4%, offered a platform for a sector-wide analysis amidst optimistic forecasts for 2024 and 2025, with anticipated growth rates of 5.8% and 6.1%, respectively.  

The meeting also aimed to distill the collective expertise into actionable insights, charting a course for IBC members amid current global headwinds, large scale infrastructure developments and the ripple effects of increasing regional trade accords. 

Credit Bureau Cambodia Forecasts Steady Credit Growth and Emphasizes Digital Transformation Challenges in the Financial Sector 

In a recent assessment of Cambodia’s finance and banking sector, the Credit Bureau Cambodia (CBC) has released an insightful outlook, indicating a stable demand for credit, an increase in loan accounts, and positive growth in outstanding balances. According to the CBC, the demand for credit has remained stable while the number of loan accounts has seen a 3% increase. Notably, the outstanding balance has witnessed a positive growth of 3.4%, with a significant $27 billion in new loan disbursements entering the market. 

Read more: Microfinance Sector Contributes to Cambodia Achieving Its Sustainable Development Goals, Independent Study Finds 

Spearheading the conversation, Sothearoath Oeur from CBC highlighted the bureau’s commitment to supporting key economic sectors, as evidenced by the restructuring allowances for the tourism and construction sectors. These measures are indicative of the CBC’s proactive approach to addressing the financial challenges posed by the global economic environment. Sothearoath stated, “Our strategic decisions are aimed at fostering a resilient economic climate that can weather global financial uncertainties.” 

Looking ahead, the CBC anticipates that credit will continue to grow between 5% and 8% over the next 12 months, bringing the total from $56 billion to approximately $60 billion by the end of 2024. This expected growth comes with a vision of stabilizing non-performing loans, which have increased to 6% (30+ Days Past Due). Sothearoath expressed optimism about the future, emphasizing that “Stabilization in non-performing loans is a key indicator of our sector’s health and a testament to the robust risk management practices we have in place.” 

Sothearoath Oeur CEO of CBC.

The CBC also shed light on the challenges and opportunities within the sector. Among the challenges are the disruptive forces that continue to stress the financial ecosystem, alongside the growing pains associated with deposit expansion. On the flip side, opportunities for improving operational efficiency and enhancing customer digital experiences were identified as critical areas for future development. 

In response to these challenges, the CBC has been an advocate for digital transformation within the sector. “As we navigate through these challenges, our focus is to leverage technology to streamline operations and provide a seamless digital experience for customers. This is not just an opportunity but a necessity in the evolving financial landscape,” Sothearoath remarked. 

The CBC’s insights suggest a sector that is adapting to the demands of a changing economy, with an emphasis on innovation and customer-centricity. The bureau’s forecast and strategic focus on digital transformation speak volumes about the future direction of Cambodia’s finance and banking industry. As Cambodia continues to develop its financial infrastructure, the CBC’s analysis provides valuable guidance for stakeholders looking to navigate the complexities of the market and capitalize on the opportunities that lie ahead. 

Cambodia’s Tourism Sector on the Rise Despite Challenges, Says Rosewood’s Managing Director 

The Cambodian tourism landscape is poised for a notable transition with new developments and strategic focuses reshaping the future of the sector. According to Daniel Simon, Managing Director at Rosewood Phnom Penh, the industry is set to welcome a slew of new hotels in the capital within the next six months, signaling robust growth and investor confidence. 

Despite the promising developments, the current state of tourism presents a mixed picture. The perception of Chinese tourism remains tarnished by negative social media and film portrayals, and international flight options are limited. The local economy has seen a shift in food and beverage spending, which now peaks over the weekends, diverging from previous trends. Nevertheless, the Ministry of Tourism’s visibility has not waned, indicating ongoing government support. 

Read more: Vietjet Launches New Direct Route Connecting Siem Reap and Hanoi Amidst High-Level Bilateral Talks 

A concerning statistic for the luxury sector is the 15% decrease in occupancy rates for five-star hotels in Phnom Penh compared to 2019, along with operating restaurants functioning at 70% of their capacity from the same year. Simon elaborates on the data, “These figures are a wake-up call for us to reinvigorate the industry. It’s essential that we pivot our strategies to enhance our appeal and service offerings.” 

Daniel Simon, Managing Director at Rosewood Phnom Penh.

In response to these challenges, the future holds significant prospects. “Luxury tourism is witnessing an uptick, indicating a resurgence in high-end travel. We are exploring partnerships between brands to create a synergy that enhances the luxury travel experience,” Simon says. Additionally, initiatives like inviting journalists to write about Cambodia, promoting visa-free travel, and tapping into niche markets such as dental and golf tourism are being considered to boost the sector. 

Moreover, Simon underscores the importance of strategic marketing and planning, with the creation of the Cambodian Tourism Board and Tourism and Convention Bureau in the pipeline. “These developments are critical for our marketing strategies. We need a strong and focused Sales and Marketing (S&M) plan to navigate the competitive tourism landscape,” he asserts. 

The “Visit SR 2024” campaign, although with a strong focus on Siem Reap, poses questions about its impact on Phnom Penh. Simon addresses this concern by emphasizing the interconnectedness of tourism within the country. “While we focus on Siem Reap, we must ensure that benefits ripple through to Phnom Penh and beyond. A coordinated approach can create a holistic tourism experience for visitors,” he adds. 

The anticipated private sector growth with the entrance of new hotel properties and the strategic focus on marketing and unique tourism experiences position Cambodia’s tourism industry on a path to recovery and prosperity. As Simon aptly puts it, “We are on the cusp of a tourism evolution, and the steps we take now will define our trajectory for years to come.” 

RMA Cambodia Projects Growth in Automotive Sector Amidst Implementation of New Standards 

In the update from RMA Cambodia, a leading player in the automotive industry, projections indicate an optimistic future for the Cambodian private sector with an expected increase in the new vehicle market. Saing Ngorn, CEO of RMA Cambodia, provided insights into the current status and forthcoming trends that are set to influence the industry landscape. 

Read more: Cambodia’s Expanding Car Market Attracts Financing Solutions and Investment Opportunities 

The current automotive market has seen a varied performance across brands over the years, with the total market observing a fluctuation in numbers. In 2023, the market experienced approximately 30% drop in total vehicle imports compared to 2022. Notable shifts include the ascent of brands like MG and Chevrolet, while Ford and Toyota maintain a strong presence despite a slight decrease in numbers.

Saing emphasized the significance of these trends: “The data reflects the evolving preferences of our customers and the competitive dynamics of the market. We are adapting to these changes by focusing on enhancing the quality and safety standards of vehicles.”

Looking to the future, RMA Cambodia is poised to capitalize on the increasing market by improving the quality and safety of vehicles through the implementation of stringent vehicle standards. “We are committed to raising the bar for vehicle quality and safety. While these standards are currently in place mostly for authorized dealers, it should be extended to all imported vehicles,” Saing stated.

Saing Ngorn, CEO of RMA Cambodia.

Furthermore, RMA Cambodia underscores the potential socioeconomic benefits of the automotive sector’s expansion. The establishment of assembly plants is projected to elevate the standard of living and augment the number of skilled laborers in the country. “The growth of assembly plants is a stepping stone towards enhancing our workforce’s skill set and boosting economic development,” Saing added.

However, the journey is not without its challenges. RMA Cambodia acknowledges the issues concerning the level of accuracy in docket prices and the barriers to growth due to the shortage of skilled labor and local components. These challenges underscore the need for a strategic approach to human resource development and local production enhancement.

Saing concluded with an assertive outlook: “Despite these challenges, we see a window of opportunity to strengthen our industry. By addressing these issues head-on and fostering a supportive environment for the automotive sector, we can drive forward not only RMA Cambodia but also the nation’s economic growth.”

RMA Cambodia’s perspective offers a comprehensive look at the automotive industry’s trajectory, balancing realistic assessments with forward-looking optimism. With the implementation of vehicle standards and the development of assembly plants, the sector is gearing up for a transformative phase that promises to rev up the engines of Cambodia’s economic progress. 

Cambodian Agriculture Sets Record Exports, CEO of Dau Tu & Phu Rieng Unveils Future Strategy 

Cambodia’s agricultural sector has hit a new high, with record exports exceeding 6.2 million tons and generating over $3.5 billion, as reported by Eugene Kraamwinkel, CEO of Dau Tu & Phu Rieng. The sector, particularly noted for its cashew production—the third largest globally—shows robust growth and significant potential. 

Kraamwinkel shared his insights on the current status and future trajectory of agriculture in Cambodia. “We’ve seen unprecedented growth in our export volumes, which speaks to the potential of our agriculture sector. However, we are not without our challenges, such as price volatility due to rising global input prices and resource constraints stemming from limited access to equipment, technology, and financing,” he explained. 

Reda more: Launch Of Khmer Agriculture For The Future Incubator: A Step Toward Climate Resilient Agriculture in Cambodia 

Environmental sustainability remains a pressing concern, alongside the need to develop resilient agricultural practices. In the face of these challenges, Kraamwinkel is optimistic about the opportunities for exports and value chain development, noting the importance of tech-savvy agriculture, including the use of drones and smart irrigation systems. 

Eugene Kraamwinkel, CEO of Dau Tu & Phu Rieng.

Looking ahead, Kraamwinkel outlined the “Pentagon Strategy Phase II” for the 2023-2028 period, which aims to tackle these current challenges with a long-term vision for agricultural development. “The Royal Government of Cambodia (RGC) is steadfast in its promotion of agricultural exports, and we are committed to continuing this momentum with strategic planning and technological advancement,” he stated. 

A key element of the strategic plan is the diversification of markets. Dau Tu & Phu Rieng is exploring new markets outside of Asia, aiming to reduce dependence on specific buyers and increase price competitiveness. “Diversifying our markets is crucial. We must not rely solely on traditional markets but instead open up new avenues that can provide better prices and stability for our producers,” Kraamwinkel emphasized. 

The CEO also highlighted the importance of community and adaptability. “We believe that collaboration is key, focusing on local communities and ensuring that our agricultural practices are adaptable to the changing global landscape. This includes fostering entrepreneurial initiatives that can contribute to a sustainable and resilient agricultural sector,” he remarked. 

Cambodia’s agricultural sector stands at a crossroads, with high export records underscoring its potential. Under the guidance of visionaries like Kraamwinkel, the future looks promising, with strategic initiatives in place to navigate through market volatilities, environmental concerns, and the global push for technological integration in farming practices. 

Intercare Hospital’s Vision for Healthcare: A Blend of Quality and Innovation 

The healthcare landscape is undergoing transformative changes, and Intercare Hospital is at the forefront, forging a path towards enhancing Cambodia’s healthcare sector. Jason Harrison, RN, co-founder and General Manager of Intercare Hospital, spoke about the institution’s progress and its plans to influence the private healthcare sector in the coming years. 

Intercare Hospital has made significant strides in developing quality practitioners and building trust through excellence. “Our focus has always been on providing exceptional care with competitive and fair pricing. We believe that trust in healthcare grows from consistently delivering high-quality services,” said Harrison. 

Read more: Intercare Medical Center Continues Expansion with 24/7 Emergency Department in Phnom Penh 

The healthcare provider is also playing a critical role in supporting the tourism industry by ensuring that visitors have access to reliable and top-tier medical services. This, in turn, contributes to the overall attractiveness of Cambodia as a destination for travelers seeking both leisure and medical care. 

Looking to the future, Harrison outlined the anticipated impacts on the private healthcare sector over the next 12 months. Key among these is addressing staffing and human resources challenges, managing the potential saturation of the healthcare market, ensuring robust clinical governance, and prioritizing education. 

The healthcare sector is not without its challenges. Harrison noted, “We are in an era where technology and innovation are pivotal. Along with this comes the challenge of integrating these advancements into our practice while ensuring our staff are educated and capable of using these new technologies effectively.” 

Jason Harrison, RN, co-founder and General Manager of Intercare Hospital.

Governance also plays a crucial role. “The role of governing bodies cannot be overstated. Their guidance is essential in navigating the complex healthcare environment while fostering a space for innovation,” Harrison added. 

Intercare Hospital is set to tackle these challenges head-on, with Mr. Harrison emphasizing the opportunity for growth and improvement. “Education is the cornerstone of advancement. By investing in the continuous education of our staff, we not only enhance our services but also contribute to the greater health ecosystem of Cambodia,” he asserted. 

As the healthcare sector continues to evolve, Intercare Hospital remains committed to its mission of excellence and is well-positioned to be a leader in shaping the health outcomes of the nation. Harrison’s vision for Intercare Hospital is clear: to be an institution that not only responds to the needs of today but anticipates and shapes the healthcare of tomorrow. 

Read more: IBC Mid-Year Market Review 2023: Trends, Transitions and Triumphs Across Key Industries in Cambodia (Part 1) and Mid-Year Market Review 2023: Trends, Transitions and Triumphs Across Key Industries in Cambodia (Part 2) 

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