The Council for the Development of Cambodia (CDC) has revealed that it approved 27 new investment projects in the Kingdom’s special economic zones (SEZ) in the first half of the year, with registered capital totalling more than $300 million and the expectation of creating more than 20,000 jobs.
These are out of the 113 new investment projects and expansions nationwide given the nod by the CDC in the January-June period, with combined registered capital of about $1.1 billion and plans to bring 122,000 new jobs, the council noted in a recent report.
An SEZ, often portrayed as a kind of commercial oasis, is a specially designated area within a jurisdiction’s borders that is subject to different – typically more lenient – legal, administrative, and economic regulations than elsewhere in the same jurisdiction. It may also include unique tax, logistical, or one-stop service arrangements intended to draw in business and investment.
According to the CDC, Cambodia currently has 24 formal SEZs, four in Phnom Penh and 20 in the provinces – eight in Svay Rieng, five in Preah Sihanouk, three in Banteay Meanchey, two in Kandal, and one each in Koh Kong and Kampot.
Cambodia Chamber of Commerce vice-president Lim Heng noted that while the majority of non-SEZ investment projects are in processing and industrial sectors, most of those in SEZs are specifically in garment manufacturing.
“All legitimate investment projects are socio-economically important for Cambodia, regardless of whether they’re located in SEZs; the perks for investors are the same either way,” he said on July 16.
Royal Academy of Cambodia economist Hong Vanak highlighted how convenient and advantageous SEZs can be for businesses to grow and succeed, given their concentration of industrial facilities and strategic geographical locations “with easy access to transport infrastructure”.
SEZ export output has dramatically increased in recent years, he stressed.
Prime Minister Hun Sen has also called for further SEZ development across Asia, through private sector boards and investor engagement as well as better utilisation of the benefits that these zones offer.
Addressing factory workers at the Manhattan Special Economic Zone (MSEZ) near the Vietnamese border in Svay Rieng province’s Bavet town on June 25, the premier highlighted the importance of the SEZs and wholesale markets along Cambodia’s frontiers, including those near Thailand in Banteay Meanchey and Koh Kong provinces.
Reflecting on the striking contrast between present-day Cambodia and the Kingdom during past turbulent times, he posited that mines may have once been deployed in the vicinity of the MSEZ.
Svay Rieng became the 11th province – 12th if including Phnom Penh – to be formally bestowed “mine-free” status on February 20, under the auspices of the Samdech Techo Project for Mine Action (STP-MA). The government aims to have the Kingdom entirely cleared of landmines by 2025.
According to the CDC report, the first half’s 113 approved projects worth a combined $1.1 billion represented an increase of 15 projects but a slump of about $1.9 billion – or nearly two-thirds – from January-June 2022.
Chinese and local investors respectively made up 65.38 per cent and 19.86 per cent of the total registered capital during the six-month period.
The other nationalities, in order of decreasing investment, were Vietnam (6.64%), Seychelles (3.31%), Thailand (1.77%), South Korea (1.70%), Samoa (0.60%), the US (0.49%), Singapore (0.18%) and Sweden (0.07%).
These projects are slated to deliver about 122,000 new jobs, the report claimed, adding that the industrial sector accounted for the majority of projects, at 102 (90.27%), followed by agriculture and agro-industry (7), tourism (3) and infrastructure and other (1).
The $3 billion total for registered investment capital in January-June 2022 was bumped up by a handful of major projects, such as Kampot Logistics and Port Co Ltd’s $1.300 billion International Multi-Purpose Logistics and Port Centre in Kampot province’s Bokor town – which some have projected to cost $1.5 billion.
Two additional examples are Cambodia Upper Tatay Hydropower Co Ltd’s $389 million 150MW dam in Koh Kong province’s Thma Bang and Koh Kong districts, and General Tires Technology (Cambodia) Co Ltd’s $297 million car tyre factory in Preah Sihanouk province’s Sihanoukville Special Economic Zone (SSEZ).
The Ministry of Commerce’s business registry shows “postal registered office addresses” in mainland China for all officers listed under Cambodia Upper Tatay Hydropower and General Tires Technology. Meanwhile, the two officers named in Kampot Logistics and Port’s entry, “Meas Thom” and “Yim Ly”, the latter of whom is designated as senior, are given domestic addresses.
Shanghai-listed Jiangsu General Science Technology Co Ltd identifies General Tires Technology – previously named General Intelligence (Cambodia) Co Ltd – as an “overseas subsidiary”.