Transportation experts and economists are expressing optimism regarding the continued increase in the value of exports and imports within the Sihanoukville Special Economy Zone (SSEZ) for 2024.

The zone witnessed a significant expansion in trade in 2023, achieving over $3.3 billion, an increase of more than 33% year-on-year. 

The 11.13sq km SSEZ – the Kingdom’s largest industrial park in terms of size and occupancy – recently reported that the combined export-import value of all factories and enterprises in the zone amounted to $3.362 billion in 2023, representing a 34.86% increase from the previous year. 

Trade value of the zone constituted approximately 7.18% of Cambodia’s total exports and imports in 2023, which totalled $46.83 billion.

Established in 2008 in Preah Sihanouk province’s Prey Nop district, the zone is a partnership between Chinese-owned Jiangsu Taihu Cambodia International Economic Cooperation Investment Co Ltd and the Cambodia International Investment Development Group Co Ltd (CIIDG).

SSEZ trade revenue to continue increasing

Chea Chandara, president of the Logistics and Supply Chain Business Association (LOSCBA), told The Post on January 29 that the consistent growth of new factories and enterprises investing in the zone has steadily boosted the import of raw materials for processing and export of goods to international markets. 

He attributed the influx of investment to the country’s improved political and security environment, favourable investment laws and the proximity of the deep-water Sihanoukville Autonomous Port (PAS), which offers convenient transportation.

“Despite current global economic challenges, I am confident that the export-import value in Cambodia, particularly within factories and enterprises in the SSEZ, will continue to rise significantly in the future. The increase in Cambodia’s [trade] value is due to the country being more attractive for direct investment,” he explained.

Chandara noted that most factories and enterprises in the zone are Chinese-owned and produce a diverse range of goods. 

He said these include garments, machinery, electrical equipment, electronic components, furniture, plank boards and car tyres, with the majority of the goods exported to the US, Europe and some Asian countries.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said that investing in SEZs is generally more straightforward for investors in terms of management, infrastructure and import-export procedures. 

He said the increasing trade volume of goods from the SSEZ is a testament to its growing production capacity and the rising number of factories and enterprises there.

Vanak added that the positive impact of production activities and trade revenue is also linked to the country’s expanded market access, including the enforcement of trade agreements such as the China-Cambodia Free Trade Agreement (CCFTA), the Cambodia-South Korea Free Trade Agreement (CKFTA), the Regional Comprehensive Economic Partnership (RCEP) and preferential tariff systems offered by some countries.

“The volume of exports and imports of goods from the [SSEZ] is expected to further increase this year, with the global economic outlook projected to improve compared to 2023,” he said. 

“Additionally, the number of local and foreign companies investing in Cambodia is on the rise,” he added.

Energy prices important to attract investors

Te Taingpor, president of the Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC), said that reducing electricity prices could play a crucial role in attracting more financers to the country. 

He emphasised that lower electricity costs would help in reducing overall expenses, thereby enhancing the country’s competitiveness in the international market.

“Fuel and electricity prices are key factors in attracting foreign investors, as they are vital components of the production sector, alongside the costs of raw materials and labour. When fuel and electricity prices are stable and low, foreign investors will perceive greater opportunities arising from these factors,” he explained.

Ministry of Commerce spokesperson Penn Sovicheat said 231 companies from 10 different countries are operating in the SSEZ to date, with a capital investment exceeding $1.2 billion and more than 25,000 jobs. 

He noted there are 32 new factories currently under construction, with plans to commence operations soon, highlighting the important role of the zone in attracting foreign direct investment (FDI), particularly from Chinese financers.

Cambodia’s 2023 international trade stats

According to the General Department of Customs and Excise (GDCE), Cambodia’s exports to international markets reached over $22.65 billion in 2023, marking a 1.8% increase from $22.25 billion in 2022. 

The country imported goods valued at $24.18 billion in 2023, a 5% decrease from the previous year’s $25.46 billion.

Total international trade in 2023 amounted to approximately $46.83 billion, a decline of 1.9% from $47.71 billion in 2022. The trade deficit for the country in 2023 stood at about $1.54 billion, considerably lower than the $3.21 billion recorded in 2022. 

The Kingdom’s major trading partners include China, the US, Vietnam, Thailand, Japan, Indonesia and Germany, as per the GDCE.