Local conglomerate WorldBridge International signed an agreement yesterday with Kamaz Foreign Trade Company, a Russian manufacturer of heavy-duty trucks, laying the groundwork for potential distribution across the country with the end goal of establishing an assembly plant in the Kingdom.
The three-stage memorandum of understanding (MoU) will see WorldBridge International conduct a three-month market survey to gauge the potential for Kamaz sales in Cambodia, explained chairman Sear Rithy. The second stage would then give the company sole distribution rights for heavy-duty Kamaz trucks that can be used for container shipping, construction and mining activities, with the final stage setting up a local assembly plant.
“If the deal works out we could be assembling the trucks within two to three years,” said Rithy, adding that plant would be established in Kerry WorldBridge Logistics SEZ, a joint venture between WorldBridge and Hong Kong-listed Kerry Logistic Network Ltd.
While Rithy said the MoU only represents a framework for cooperation with the Russian company, he said the long-term vision is to cut down on Cambodia’s high logistics costs.
“The purpose of this [agreement] is that if you look at Cambodia, our logistics costs are two to three times more expensive then neighbouring countries, and most of the trucks here are second-hand,” he said. “This [distribution deal] could bring in new more affordable trucks into the market that would help drive down the costs of logistics.”
Kamaz trucks, which are currently manufactured in Russia’s Tatarstan region, rose to prominence during the Soviet era for their use by Eastern Bloc militaries. Moscow briefly provided free Kamaz trucks to the Cambodian government in the 1980s.
Tronin Artem, sales representative for Kamaz operations in Vietnam and Eastern Asia, said the company has proven successful in Vietnam by doubling its sales in the last two years despite road weight restrictions limiting their use.
“We have signed this document because we have found a strong partner to help us enter the [Cambodian] market,” he said.
While Artem declined to estimate how many trucks Kamaz could sell in Cambodia, claiming that it was too early to tell, he said the company would target the 15- to 25-tonne segment used for construction and container shipments.
“Right now we are just seeing if there is an import market for us here before we move forward with the other stages of the MoU,” he said. “We have been seeing growth in our overseas sales worldwide and we think Cambodia could potentially be a good market. But we will only move forward when the time is right.”