Cambodia Investment Review

Aquarii BD Cambodia Highlights Key Economic & Trade Developments in September 2024 Newsletter

Aquarii BD Cambodia Highlights Key Economic & Trade Developments in September 2024 Newsletter

Cambodia Investment Review

Aquarii BD Cambodia’s September 2024 newsletter provides a detailed overview of the country’s recent economic and trade developments, with a focus on major investments from Japanese firms, Cambodia’s strategic efforts to establish its first Free Trade Zone (FTZ), and growing international partnerships. These developments reflect Cambodia’s continued progress and its emergence as a regional player in Southeast Asia.

Read More: Aquarii BD Cambodia Highlights Key Economic & Trade Developments in August 2024 Issue

Japanese Investments Driving Industrial Growth

Japanese companies are strengthening their presence in Cambodia, with significant investments from MinebeaMitsumi and Honda. MinebeaMitsumi, a global leader in precision components, has begun constructing its second factory in Pursat province. The facility, located in a special economic zone (SEZ), will operate entirely on renewable energy, aligning with Cambodia’s environmental goals. Since its initial investment in 2011, MinebeaMitsumi has committed $600 million to its operations in the country, employing thousands of Cambodian workers. This expansion will further increase production of electronic components, including motors, sensors, and actuators.\

His Excellency Sun Chanthol, Deputy Prime Minister, First Vice Chairman of Council for the Development of Cambodia (CDC) Yoshihisa Kainuma, Representative Director, Chairman CEO of MinebeaMitsumi.

Honda, another key player in Cambodia’s automotive industry, is also expanding its operations to meet rising demand for motorcycles. Since 1992, Honda has produced over 4.3 million motorcycles in Cambodia through its subsidiary, N.C.X. Co., Ltd. The company’s Cambodian operations employ nearly 2,000 workers and are a cornerstone of the local manufacturing sector. Honda’s expansion is supported by the Cambodian government’s industrial development policies and vocational training programs.

Cambodia’s First Free Trade Zone Initiative

Cambodia is taking steps to establish its first Free Trade Zone (FTZ), aiming to streamline trade processes and reduce tariffs, thereby attracting more investment, particularly in manufacturing and logistics. This initiative builds on the success of Cambodia’s existing SEZs, which continue to be a magnet for foreign direct investment. In August 2024, the Council for the Development of Cambodia (CDC) approved 53 new investment projects worth $1.2 billion, creating over 33,000 jobs.

A high-level Cambodian delegation, led by Deputy Prime Minister Sun Chanthol, visited Xiamen, China, to seek technical expertise in developing the FTZ. The initiative is expected to draw in industries like electronics and automotive manufacturing. With FTZs focusing more on trade and logistics, the project aims to enhance Cambodia’s role in regional supply chains and global trade networks.

Read More: Leader Talks with H.E. Sun Chanthol on New Opportunities for US Investors at ASEAN Leadership Forum in Washington

Diplomatic Efforts to Strengthen Trade Relations

Cambodia has increased its diplomatic engagements to foster stronger international trade ties. In early September, Prime Minister Hun Manet welcomed a U.S. business delegation from the Cambodian Chamber of Commerce in California. The delegation explored investment opportunities in Cambodia’s agriculture sector, particularly in the export of rice, cashew nuts, pepper, and dried mango to the U.S. The visit also included discussions on increasing educational cooperation, with plans for a U.S. company to open a representative office in Cambodia to assist students pursuing studies in the United States.

Mr. Chap Sopheak- CEO of IDI.

Cambodia also co-chaired the Fourth Meeting of the Cambodia-Philippines Joint Commission for Bilateral Cooperation (JCBC), focusing on trade, tourism, and air connectivity. Both countries reaffirmed their commitment to enhancing cooperation across various sectors, including security, education, and culture. In a separate engagement, a Thai delegation visited Cambodia to discuss cross-border investments, particularly in manufacturing and agriculture. Cambodian officials emphasized strategies to encourage foreign companies in Thailand to shift labor-intensive production to Cambodia’s SEZs, further promoting regional cooperation.

Infrastructure Development and Sustainability Initiatives

On the infrastructure front, Cambodia made a significant move with the opening of a new container terminal at the Sihanoukville Autonomous Port (PAS). This $37.5 million project, largely funded by a Japanese concession loan, is expected to greatly enhance the port’s capacity to handle international shipping traffic. This development is part of Cambodia’s broader strategy to position itself as a regional logistics hub, particularly through initiatives like the Free Port Concept at Sihanoukville Port, which aims to reduce trade barriers and improve efficiency.

In the realm of sustainability, Sihanouk International Airport achieved Level 3 certification under the Airport Carbon Accreditation (ACA) program. Operated by VINCI Airports, the airport has implemented several energy-saving measures, such as upgrading to energy-efficient systems and replacing traditional lighting with LEDs. This achievement reflects Cambodia’s commitment to reducing its carbon footprint, in line with the country’s long-term goal of reaching carbon neutrality by 2050.

Outlook for Cambodia’s Investment Climate

Cambodia’s focus on foreign investment, infrastructure development, and diplomatic partnerships highlights the country’s competitiveness as an investment destination. The expansions by Japanese companies, alongside the potential development of an FTZ, showcase Cambodia’s commitment to creating a business-friendly environment. By attracting manufacturing and logistics companies and improving trade processes, Cambodia is positioning itself as a key player in Southeast Asia.

Sihanoukville Autonomous Port – Cambodia’s only deep-sea port.

These strategic initiatives, along with ongoing infrastructure improvements and sustainability efforts, are expected to drive long-term economic growth. As Cambodia continues to strengthen its regional and global connections, the investment climate looks increasingly promising. The September 2024 edition of the Aquarii BD Cambodia newsletter offers a clear picture of these efforts, showcasing Cambodia’s steady progress and ambition for the future.

Aquarii BD’s Role and Mission

Aquarii BD emphasizes the importance of providing international businesses and investors with up-to-date information on Cambodia’s economy and market.

“At Aquarii BD, we believe that helping international businesses and investors, particularly those not yet familiar or socialized to Cambodia’s value proposition and opportunities, to formulate an up-to-date understanding of factual developments in Cambodia’s economy and market, remains an important first step to attracting more investments to the Kingdom.”

“‘Connecting Dots’, a monthly compilation of the more salient local developments from the preceding month, coupled with insights and comments from trusted industry experts into Cambodia’s evolving market dynamics, underscores our commitment to equip businesses and investors with the knowledge and information to navigate the local business landscape and to make better-informed decisions on investment opportunities emerging from Cambodia’s socio-economic developments.”

For those interested in a deeper dive into Cambodia’s economic updates and forecasts, the full August 2024 issue of “Connecting Dots” is available for download on Aquarii BD’s website, offering invaluable insights into Cambodia’s economic progress and investment potential.

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