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Thailand Plus One: Poipet SEZ investment strategy

Sok Chan / Khmer Times Share:
The Poipet PP SEZ is located approximately 8kms East of the Poipet city centre, with access to one of the key border crossing points with Thailand in the NorthWest of Cambodia. Supplied

Poipet PP Special Economic Zone – a wholly-owned subsidiary of Phnom Penh Special Economic Zone Plc. – is aiming to become a higher value-added production hub, particularly for electronics, mechanical and automotive parts, according to its Chief Executive Officer.

The zone will also utilize its close proximity to the Thai border and access to the developing ‘Asian Highway’ that will link the future industrial hub to key distribution points.

Uematsu Hiroshi, Chief Executive Officer of Phnom Penh Special Economic Zone (SEZ) told Khmer Times that the Poipet PP SEZ will aim to target investors with already established longstanding operations in Thailand for many decades, especially Japanese and Thai manufacturers.

“We call it the Thailand + 1 strategy,” Uematsu said. Currently, the Phnom Penh SEZ accommodates investors from various countries and of both export and domestic market-oriented industries.

“Poipet PP SEZ is developing 65.7 hectares of land, and is equipped with international standard infrastructure such its own electricity line (a joint venture with B. Grimm Power in Thailand), a water treatment plant, 24 hours security service and other services to meet the needs of higher value-added manufacturers.”

“We will not target heavy industry like steel and petrochemical. As we think that Cambodia is too small to attract heavy industry as Japanese heavy industry already goes to bigger countries with large natural resources,” said Uematsu.

Uematsu added that there is already one factory, Sumitronics Manufacturing (Cambodia) Co. Ltd., who is producing printed circuit boards and wire harness in the Poipet PP SEZ.

With exports of electronic and vehicle parts and accessories to Japan has already increased to $77.8 million in 2019, up from $39.4 million in 2018, according to a World Bank report.

“Cambodia should diversify its exports beyond garments by further promoting shipments of electronic and vehicle parts and accessories to Japan. “

“The Japanese market appears promising for Cambodia’s exports of electronic and vehicle parts and accessories,” the bank said.

However, stable and quality electricity is needed to attract additional high-value-added manufacturing to Cambodia, as the quality of electricity in the kingdom remains a challenge for investors as the manufacturing sector, said Mey Kalyan, senior advisor to the government’s Supreme National Economic Council.

He told Khmer Times that to diversify, Cambodia needs to have quality electricity to supply the industry in order to achieve the government’s Industrial Development Policy 2015-2015.

“Quality electricity means strong and stable power, 24 hours a day, supporting manufacturing with no up-and-down frequency. If we don’t have this, we will not be able to encourage foreign direct investment to Cambodia,” he said.

The Poipet PP SEZ is located approximately 8kms East of the Poipet city centre, with access to one of the key border crossing points with Thailand in the NorthWest of Cambodia.

With its strategic location attractive to prospective investors who are looking to open a new manufacturer, warehouse, or distribution centre.

In addition, it is only 250 kilometres away from the deep-saea port at Laem Chabang, Thailand and has direct access to National Road 5.

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