Officials see industry as key to FTA benefits

Phnom Penh Post 02/03/2010

SEZs vital for growth ahead of full free-trade agreement: experts

Photo by: Heng Chivoan

A sign advertises engineering, construction and security services on Friday at Tai Seng SEZ in Bavet on the border with Vietnam.

The important thing [for Cambodia] is to get foreign money to foster its domestic industry."

JAKARTA. FOREIGN investment in Cambodia’s Special Economic Zones (SEZs) is vital if Cambodia is to benefit from free trade with China, say senior ASEAN officials.

On January 1, the ASEAN-China Free Trade Area was created, reducing the vast majority of trade tariffs between founding ASEAN members and China to zero percent.

Cambodia, Vietnam, Laos and Myanmar, as new members, must reduce their tariffs on certain goods to 5 percent and have until 2015 to eliminate the tariffs completely.

“The important thing [for Cambodia] is to get foreign money to foster its domestic industry. SEZ development in Cambodia is a potential way to produce exports for China,” Hidetoshi Nishimura, executive director of the Economic Research Institute for ASEAN and East Asia, said at his office in Jakarta on Thursday.

Cambodian exports to China are dwarfed by imports to the Kingdom, and foreign investment in the nation has plummeted due to the global economic crisis.

According to the Hong Kong Trade Development Council (HKTDC), trade volume between Cambodia and China was US$480 million in 2009. Of that, only $13 million consisted of Cambodian exports to China, mostly agricultural products.

According to Cambodia’s central bank, foreign direct investment flows into Cambodia declined 35.2 percent to $514.7 million in 2009, from $794.7 million in 2008.

S Pushpanathan, deputy secretary general for the ASEAN Economic Community, said that for Cambodia to attract more foreign direct investment the country must have clear and transparent investment laws and a mechanism for business-dispute resolution.

“These are factors that investors think about before they put their money in a country,” he said.

He added that as labour costs in Cambodia are cheap, Chinese investors will be attracted to investment in the garment and textile industries here.

The business community seems united in regarding sucessful SEZs as important factors in the Kingdom’s economic development.

Yuji Imamura, Japan International Cooperation Agency’s advisor in charge of investment environment improvement at the Council for the Development of Cambodia, wrote in an email Monday: “For investors, SEZs are where there is basic infrastructure is in place. It is hard work for them to set up their factories outside SEZ areas.”

He added that so far eight of Cambodia’s 21 SEZs are in operation. Around 40 companies are manufacturing garments, textiles, shoes and consumer goods within the zones.

Imamura added that in the future, international investors will see Cambodia as an alternative to investment in Vietnam, as labour costs in the Kingdom’s neighbour have risen.

Chan Nora, secretary of state for the commerce ministry, said Monday that it is clear that SEZs will be a positive attraction for foreign investors as trade facilitation, such as import and export paperwork, is easier inside the zones.

Hirosi Uematsu, managing director of Phnom Penh Special Economic Zone, wrote in an e-mail on Monday that since the start of this year, three foreign companies – an animal feed company from China, a Philippine snack food firm and an Indian food-processing company – have signed up to build factories, bringing the number of companies operating in the zone to 17. ADDITIONAL REPORTING BY SOEUN SAY

Clinic tackles root cause of dentistry woes

Phnom Penh Post 27/01/2010

Western practice says it is working to make sure local dental industry isn’t just pulling teeth

Photo by: BENNETT MURRAY

Dentist Dr Deborah Moore says Phnom Penh’s European Dental Clinic offers a local alternative to places like Bangkok, and even attracts the occasional health tourist.

I'VE HAD ... EMAILS FROM PEOPLE IN AUSTRALIA WHO WANT CONSULTATIONS ON THEIR VISIT TO CAMBODIA"

ALTHOUGH locals, expats and tourists alike are generally sceptical of the Kingdom’s healthcare industry, international staff at Phnom Penh’s European Dental Clinic say it has raised standards of dental care in Cambodia.

Founded in 1994 by dentist Dr Eric Le Guen and technician Philippe Guibert, the clinic was the first of its kind in Cambodia.

“Before that, everyone was going to Bangkok,” European Dental Clinic dentist Dr Deborah Moore said.

The practice provides a range of services, akin to a dental clinic in the West, including hygienist services, implants, tooth extraction, as well as orthodontics offered monthly by a visiting specialist from Bangkok.

“We offer everything, really,” said Dr Moore.

Chinese company picked to boost capital's port capacity

Phnom Penh Post 22/01/2010

Upgrade to be funded by already approved loan from Beijing

Photo by: HENG CHIVOAN

Phnom Penh Port is set for a makeover following a newly signed deal with Shanghai Co, according to the head of the port Hei Bavy.CHINESE company Shanghai Co has been selected by the government to develop infrastructure at Phnom Penh Autonomous Port (PPAP).

Hei Bavy, director general of PPAP, told the Post Wednesday that the business has been awarded the rights to develop the port from the Cambodian government. It is set to start the project this March and due to finish 30 months later.

The scheme will be funded by a US$30 million Chinese loan, announced by the government in October.

In its first stage, Shanghai will equip the 59-year-old port with modern goods-lifting equipment and build a new port for storing containers in a deep-water area. This will be situated on the Mekong River, in Kien Svay district, 20 kilometres east of Phnom Penh.

“We hope more ... containers will be shipped through Phnom Penh Autonomous Port because of this development project,” said Hei Bavy.

It is hoped that after development the port will be able to load from 120,000 to 300,000 standard containers of goods per year, he added. At present, it is able to load a maximum of 50,000 to 60,000 per year.

In 2009, PPAP shipped only 43,500 standard containers of freight, a drop of 7.44 percent compared with 2008, due to the global economic crisis.

Hei Bavy predicted that the shipment of freight at PPAP this year might reach 60,000 containers, due to a predicted increase in rice exports and some other agricultural products.

“I believe that Cambodia will continue to develop in the future. There will be bigger demand for produce, which means transportation services will need to expand too,” Hei Bavy said.

Last week, Chan Nora, secretary of state of the Ministry of Commerce, predicted that business in Cambodia would improve this year because large amounts of agricultural products like rice, corn and rubber had been reserved for export.

HK bourse expert points to IPO opportunies

Phnom Penh Post 22/01/2010

CAMBODIA’S new stock market will benefit companies and help them bring in extra capital for expansion, a Hong Kong expert said in a Thursday seminar.

Referring to securities markets and the private sector, Alec Yiu Wa Tsui, former CEO of Hong Kong Stock Exchange and former chairman of Hong Kong Finance Institute, said: “Newly listed companies will bring in new capital, win prestige, attract professional management, and earn more business opportunities.”

However, the former CEO said that there are burdens for companies that wish to become listed on the exchange. He named the cost of an initial public offering (IPO), the possibility of corporate restructuring before an IPO, and continued need for compliance with listing requirements – such as regular financial reporting and ac hoc disclosure of sensitive information – as factors.

“However with risk comes opportunity,” he explained.

The Kingdom’s first stock exchange is due to launch at the end of this year, after its implementation was delayed.

Sorn Sokna, chairman of the newly founded Financial Institute of Cambodia, said that a number of Cambodian companies already have a transparent and effective corporate culture, which means they have the potential to engage in the stock exchange.

“However, these companies have shown great reluctance in engaging with the securities market, primarily due to a lack of clear understanding in the ways they could participate,” he added.

Keat Chhon, finance minister and chairman of Securities and Exchange Commission of Cambodia, said the most important factor from the government’s side is that the bourse becomes a transparent, effective, just, sustainable, and investor-protective force in the economy.

OZ gold estimate at latest drill due in Q1

Phnom Penh Post 22/01/2010

MEASUREMENTS to estimate gold resources at Okvau, in Mondulkiri province, are set to be finalised by mining company OZ Minerals in the first quarter of 2010.

According to the company’s fourth-quarter report released Thursday, structural and geological modelling at the gold deposit have recently been completed, and resource calculations are now under way.

The company hopes to outline an initial inferred resource by the first quarter of 2010, as part of its “new discovery” programme, the report added.

The modelling followed a 5,800-metre drilling programme to test previously unidentified gold mineralisation at Okvau.

Last month, a spokesman for OZ Minerals told the Post it aims to identify at least 2 million ounces of gold at its Cambodian concessions by the end of this year.

Surface sampling and geophysical analysis is ongoing at the four other areas being explored by the company.

The areas, located close to Okvau, are Oput, Area 6, Granite Hill and Area 1. “These prospects are currently being, or will be, drill-tested in 2010 to ascertain the district-scale potential in the Okvau region,” Thursday’s report said.

Australian-based OZ Minerals outperformed its estimates in the last quarter of 2009, according to the figures released. Copper and gold production exceeded expectations at its Primrose Hill site in Australia.

The company mined 36,497 tonnes of copper and 30,526 ounces of gold during the period.

OZ Minerals recently refocused on gold and copper mining in Australia and Southeast Asia following the June sale of US$1.35 billion of its zinc mines to China Minmetals Non-Ferrous Metals Co.

Women see Facebook as a recipe for business success

Phnom Penh Post 20/01/2010

Networking site a new forum for Cambodian businesswomen

Photo by: SOVAN PHILONG

A female worker takes a look at the Cambodia Women in Business page on Facebook Tuesday. The group reached 100 members Monday, a figure that is still rising.

-------------------------------------------------------------------------------------------------------------

Helping women in business have access to information is a good thing."

-------------------------------------------------------------------------------------------------------------

UNDERREPRESENTED female entrepreneurs in the Kingdom are utilising the Internet in a bid to discuss their problems and encourage business growth.

A group called Cambodia Women in Business has set up on social-networking site Facebook to act as a forum for businesswomen.

It was started by female participants in the Government-Private Sector Forum (G-PSF), a group that facilitates business discussions between the public and private sectors. They found that only 10 percent of participants were women, despite a 2009 study by the International Finance Corporation (IFC) and Asia Foundation which found that 55 percent of private businesses in Cambodia were owned by females.

A spokeswoman for the IFC Coordination Bureau, which organises the forum, explained that participation by women in formal associations and forums may be lower, as many operate small and informal enterprises.

The IFC hopes that for some, the forum will provide an accessible place where gender-related issues can be discussed.

Julie Brickell of the IFC explained in an email Tuesday: “Two things happened to start this off. Women participating in the forum wanted to come together to discuss problems they face as entrepreneurs, and to help each other. They also wanted to reach other women who are not participating in the forum and draw them in.

“Since these women were all using the Internet, they thought setting up a Facebook page would be a good means of facilitating dialogue on this topic.”

Since its launch in November, over 100 women and men have become members of the site. They post links to academic studies, newspaper articles and discussions on gender equality in Cambodia.

The IFC reports the reaction has “been very enthusiastic” so far. It hopes that by promoting women’s empowerment, they can fuel economic growth within the business community and so reduce poverty.

Former women’s minister Mu Sochua of the Sam Rainsy Party welcomed the move, but said she believes that underlying issues causing gender inequality need to be addressed in Cambodia, and that the Internet is an inaccessible resource in much of the country.

She pointed to a lack of education, the pressures for women as carers, societal values and poverty – as well as considerations such as micro-finance interest rates – as factors holding women back in developing small businesses such as tailors, grocery stores and wedding outfitters.

Scholars from the Shinawatra International University in Thailand and Preston University in Cambodia interviewed 61 female entrepreneurs in Phnom Penh in 2009 and reported that 47.5 percent of respondents had a problem balancing work with being a housewife, 14.8 percent reported resistance from their husband’s family and 9.8 percent spoke of the indifferent or hostile attitude of society towards female entrepreneurs.

“Anything that is helping women in business have access to information is a good thing. If women were more educated, they’d be able to use computers and the Internet. In turn, that would help advance their businesses,” said Mu Sochua.

Mong Riththy fires up 'clean' charcoal brand

Phnom Penh Post 20/01/2010

MONG Riththy Group is preparing to put “cleaner” charcoal on the domestic market after a US$10 million investment, its president told the Post Tuesday.

In the coming two weeks, the company is set to introduce between 250 and 1,000 tonnes of Acacia charcoal on the domestic market each month at a price of 1,200 riels (US$0.30) per kilogram, said Mong Riththy.

The special charcoal is thought to be cleaner than the domestic charcoal used normally, as it burns at a high heat and does not produce as much smoke as other varieties.

It has been produced using wood from Acacia trees planted in 2005 on 3,200 hectares of land in the Keo Phos area of Stueng Hav district, Preah Sihanouk province, Mong Riththy said.

“We hope that our company will be successful in putting its clean charcoal into the market because the product is easy to use, burns well, and does not affect the health of users,” he explained Tuesday.

He added that a grinding plant and 50 charcoal kilns have been built to process the wood, which is mixed with palm oil shells to produce the charcoal.

Mong Riththy said he hopes to encourage people to grow Acacia trees to avoid cutting down the Kingdom’s natural forests. One hectare of the crop, which takes five years to mature, could earn about $500 per year, he added.

Government officials welcomed the move to produce cleaner fuel.

Ty Sokun, director general of the Department of Forestry Administration, said Tuesday that people throughout the country cut down around 3.5 million tonnes of wood to use as cooking charcoal each year.

According to a report from the Department of Forest Administration, 70 percent of the firewood people use to cook in Cambodia is cut from natural forest. The other 30 percent is cut from fruit trees.

“We believe that it is a good idea to produce clean charcoal because it will help reduce the demand for firewood from natural forests,” said Ty Sokun.

Falling prices in December capped a year of deflation

Phnom Penh Post 201/01/2010

Consumer prices fell 0.7pc, but rise in fuel costs will prompt inflation in 2010

Photo by: PHA LINA

A vendor sells seafood this month at a Phnom Penh market. Falling food prices prompted overall deflation in Cambodia last year.

The continued month-on-month fall [in CPI] is more surprising."

CAMBODIA experienced full-year consumer price index (CPI) deflation of 0.7 percent in 2009, San Sy Than, director general of the National Institute of Statistics (NIS), said Tuesday.

December CPI capped an unusual year for price trends in the Kingdom, as the index fell 0.1 percent month-on-month but jumped 5.3 percent in December on prices a year earlier due to the low base at the end of 2008 – when the global economic crisis began to affect Cambodia, analysts said.

The rate matched a December projection by the International Monetary Fund (IMF), which foresaw a 5 percent annual rise in prices year on year, “mainly as base effects from sharp declines in commodity prices fall out of the consumer price index”.

Still, overall inflation was sharply down on 2008, when prices rose in August and September at rates above 20 percent and the economy boomed, at least for the first three quarters.

Food prices – which dropped 1 percent – were again at the centre of the continued month-on-month fall in prices in December, the third month in a row that CPI declined, according to new NIS figures.

Planned airport rally sparks alarm

Bangkok Post 20/01/2010

Business leaders and analysts offered dire warnings yesterday about the economic impact if airport operations are once again held hostage to Thailand's ongoing political soap opera.

Stocks fall 1.39% on fears of new blockade

Thai stocks fell 1.39% yesterday amid reports that red-shirted supporters of former premier Thaksin Shinawatra could rally at Suvarnabhumi Airport.

Spokesmen for the United Front for Democracy against Dictatorship, a group led by pro-Thaksin supporters, insist that the rally, tentatively planned for next week, would not disrupt airport operations or interfere with passengers.

But concern spread quickly that the rally could turn into a repeat of November and December 2008, when Suvarnabhumi Airport was closed for eight days by the yellow-shirted People's Alliance for Democracy, which forced the resignation of the government led by the People Power Party, the successor to Thaksin's Thai Rak Thai.

Satit Rungkasiri, the director-general of the Finance Ministry's Fiscal Policy Office, warned that an airport closure would be akin to "national suicide".

Omani firm in talks to buy local lobsters

Phnom Penh Post  06/01/2010

AN OMAN company could import up to 300,000 juvenile river lobsters from Cambodia in a trade deal set to boost local production.

Haing Leap, deputy director of the Department of Fish and Farming Development at the Ministry of Agriculture, Forestry and Fisheries, said an Omani company is negotiating with the department to buy the young freshwater lobsters to raise them for sale in the Middle East.

The first step of the deal will see the business taking 5,000 young river creatures, at a cost of US$0.07 each, to test their development in Oman.

The government hopes that the Kingdom’s farmers will build more lobster-rearing stations if they secure sales of baby crustaceans. “If the plan is carried out successfully, it will help boost the breeding of young freshwater lobsters in Cambodia,” he said.

Khiev Sam, a lobster breeder at a station in Takeo province’s Tram Kak district, said: “This is good news. If we are able to sell our young lobsters overseas, we will have a bigger market.”

Few local farmers raise lobsters in Cambodia and breeding programs are limited, prompting the Japanese government in 2005 to donate $5 million to support a five-year lobster rearing project. At present, 70 farmers have joined force to build river lobster breeding stations.

Domestic Yorkshire pigs for sell to farmers

Phnom Penh Post

THE MONG Reththy Group plans to begin domestic distribution of 3,000 newly reared Yorkshire pigs starting in April, a manager at the firm said, after importing swine from the United Kingdom for breeding a year ago.

Ly Lavil, manager of the company’s pigs farmhouse, told the Post Sunday that it would sell 8-month-old animals for between US$420 to $500 each.

“We hope farmers will be interested … because the species breeds very rapidly, which enables farmers to raise their incomes,” he said.

Between December last year to March, Mong Reththy Group says it spent $5 million to import 500 sows from the UK to launch a breeding house in Preah Sihanouk province.

Chan Socheat, president of Kampong Speu province’s Pig Raising Association, which breeds around 500 sows, said Sunday he would purchase 30 of Mong Reththy’s Yorkshire breed, which, he added, would be followed by 100 more were the trial to prove successful.

“The first batch bred by Mong Reththy Group is a pure species, which economically means they have more potential than locally bred pigs,” he said.

The industry continues to face problems of inadequate feed supply and low prices at market, particularly compared with imported animals.

According to the Pig Raising Association, half of Cambodia’s pig farmers have ceased operations, and local animals sell at just 7,800 riels (US$1.85) per kilogram, compared with 8,500 riels for imported animals.

Ministry of Commerce data shows that pork prices at markets in Phnom Penh have dropped nearly 4 percent this year.