A worker toils away at a garment factory in Kandal province’s Ang Snuol district in January. Yousos Apdoulrashim
The Council for the Development of Cambodia (CDC) notices issued in March reveal that it greenlit seven new investment projects worth a cumulative $33.7 million, which are expected to generate a total of 6,669 jobs. Four of them are located in Phnom Penh.
The two totals – for investment capital and jobs expected to be created – were calculated by The Post from statistics that were provided individually. The actual figures may differ due to rounding.
In a March 27 notice, the CDC – the government’s highest decision-making body for large-scale investments – said JKD Packaging Co Ltd’s $5.3 million cardboard and packaging materials factory in Bek Bak village, Kouk Roka commune, Prek Pnov district, Phnom Penh is expected to bring in 300 new jobs.
In a March 20 notice, the CDC disclosed that its Cambodian Investment Board had greenlit final registration certificates to Dazhengxuan (Cambodia) Industrial Co Ltd, Xin Yuan Cheng Factory Co Ltd and Xu Wei Garment (Cambodia) Co Ltd for their projects.
Dazhengxuan’s $6 million factory on National Road 2 in Kraing Svay village, Prek Kampoes commune, Dangkor district, Phnom Penh will churn out umbrellas, raincoats, curtains, tablecloths and similar items. Plans show that the venture could create 1,741 jobs.
Xin Yuan Cheng’s $5.1 million shoe parts factory in Prey Khla village, Kraing Mkak commune, Ang Snuol, Kandal province is set to generate 318 jobs.
Xu Wei’s $5.1 million garment factory in Prey Kambot village, Chaom Chao II commune, Por Sen Chey district, Phnom Penh is slated to deliver 995 jobs.
In a March 16 notice, the CDC said Won Star Enterprise Co Ltd’s $2 million factory will produce LED and string lights as well as plastic decorations – including an “ancient tree elf” – in the Svay Rieng Giga Resource Special Economic Zone (SEZ), and is set to create 350 jobs.
The remaining two projects – both $5.1 million garment factories – were mentioned in a March 10 notice, the first of the month.
Dun Tai Garment (Cambodia) Co Ltd’s project in Prey Sruol village, Por Angkrang commune, Baset district, Kampong Speu province and Preclo (Cambodia) Co Ltd’s venture in Kantaok Choeung village, Kantaok commune, Kambol district, Phnom Penh could bring in 1,326 and 1,639 jobs, the CDC said.
The Ministry of Commerce’s business registry lists addresses in the Greater China region for officers of five of the companies: mainland China for Dazhengxuan, Xin Yuan Cheng, Xu Wei, and Preclo; and Taiwan for Dun Tai. The sole officers listed for JKD and Won Star are “Hay Kimchhay” and “Wu Junhong”, respectively.
Major draws
In a recent interview with The Post, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that the Kingdom’s trade agreements with key partners have been major draws for investors, and that greater access to international markets would fuel the diversification of production and exports.
“I believe the number of companies coming to invest will increase since – in addition to having more export markets – Cambodia has also benefited to some extent from geopolitical conflicts between major powers, which have moved factories here,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on April 3 that the investment situation in the Kingdom continues in a new-normal manner, albeit without the pre-Covid momentum, despite economic fallout from the health crisis, geopolitical tensions between major powers, and the Ukraine conflict.
He attributed the recent influx of investment to a number of internal and external factors.
On the internal side of things, Cambodia’s investment laws have been made more favourable for investors, while the Kingdom’s geographical location, labour costs and transport infrastructure are all suitable, he said.
On the external front, free trade agreements – the bilateral deals with China and South Korea, along with the Regional Comprehensive Economic Partnership (RCEP) agreement in particular – and preferential tariff treatment from major trading partners have improved Cambodia’s access to international markets, he added.
“Although the numbers of projects and investments approved by the CDC are not all that large, they are indeed a positive for Cambodia’s economic activity at this time. Those figures will increase as conflicts between major economies end,” Vanak said, sharing that local investments have been gathering considerable steam in recent years.
According to a report jointly published by the CDC and the National Bank of Cambodia (NBC), foreign direct investment (FDI) inflows in the Kingdom in the 10,011-day period from the August 5, 1994 promulgation of the old Law on Investment and December 31, 2021 amounted to 168.8 trillion riel ($41.0 billion), rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
Broken down by sector, finance accounted for the lion’s share at $9.4 billion or 22.9 per cent, followed by manufacturing ($8.5 billion; 20.8%), real estate ($4.9 billion; 12%), hotels and restaurants ($4.4 billion; 10.7%), agriculture ($4.2 billion; 10.3%), electricity ($2.6 billion; 6.2%) and construction ($1.6 billion; 4.1%), while other sectors comprised $5.3 billion, or 13 per cent.
