The German Business Group is looking to invest in the Kingdom, especially in the agriculture sector.
The group, who acts as a platform for German business activities and information exchange between members seeking to operate in the Kingdom, says German investors see more investment opportunities for growth.
Tassilo Brinzer, president of the German group, says Cambodia has potential in agriculture and the food processing sector.
“At the moment German investment in Cambodia is small but there is certainly a lot of potential here. We see opportunities in food processing, agriculture and related areas, such as quality control for exports and, of course, the garment sector and its innovation needs,” he said.
He noted that Vietnam and Thailand were destinations with a strong German investment portfolio and a history, but that Cambodia is another potential gateway in the region where, in the eyes of German investors, the business environment has been improving.
“Things are improving fast and the Royal Government is making great efforts to provide a fertile investment ground here,” he explained.
Cambodia is drawing the attention of an increasing number of German companies due to its low wages and proximity to manufacturing sites in Thailand, where many German firms have already established regional headquarters and product facilities, according to a research study by Dezan Shira & Associates.
Dezan Shira & Associates is a multi-disciplinary professional services firm, providing legal, tax and operational advice to international corporate investors.
It noted that Cambodia’s growing middle class, with its increasing desire for better lifestyle products, also makes Cambodia attractive to German companies.
However, some issues need to be addressed when it comes to forced labour, training and education levels.
“Training and education levels are still growing and have not yet reached a level where German firms would be comfortable to invest in human resources, which is a long-term investment. Once people are well trained, they need to stay with the company that invested in their training. This is still a bit of a challenge,” Mr Brinzer said.
In a meeting with Prime Minister Hun Sen last week, the newly-appointed German Ambassador to Cambodia Christian Berger said Germany is planning to open its first chamber of commerce in Cambodia to increase bilateral trade and bring in investment.