The Embassy of Denmark in Cambodia has encouraged more Danish companies and investors to explore investment opportunities in the kingdom, arguing that in an increasingly competitive global market, it is crucial that national governments and individual businesses cooperate to increase business activity.
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Uffe Wolffhechel, the Danish Ambassador to Cambodia and Thailand, who was speaking during the inauguration of Damco Cambodia’s new head office, said that business ties between Denmark and the kingdom continue to be robust, in line with the long tradition of friendship and development cooperation that both nations share.
“I tirelessly encourage Danish companies to explore opportunities in Cambodia and other countries in the region to underline the increasing importance of logistics in international trade,” Mr Wolffhechel said.
Damco Cambodia, which is part of the Maersk Group, is the seven largest freight forwarding company in the world. Headquartered in Denmark, the company specialises in services that simplify global supply chains, including air freight and ocean freight, warehousing, tracking, tax clearance and supply chain management. Their new office in the kingdom is in Phnom Penh’s V-Trust Tower.
Pen Boran, an Undersecretary of State of the Ministry of Public Works and Transport (MPWT), highlighted the company’s contribution to the development of the country’s logistics sector, saying that as a leading international shipping company, Damco has made numerous investments in the country through continuous warehousing expansion and a relentless effort to improve transportation services.
“The opening of this new office today is solid proof of the company’s commitment to provide customers with better services,” he said.
Mr Boran added that these investments are a clear indication of a conducive climate of cooperation between national and international investors.
He added that Cambodia has made commendable strides in integrating international good practice into the economy, while the private sector has played a key role in building infrastructure across the country.
Marco Civardi, the area managing director for Damco in Cambodia, Laos, Myanmar and Vietnam, said the company will continue to strengthen its digital capabilities in the transport and logistics industry while investing in the professional development of people to ensure the country remains competitive.
“As global integration of the value chain accelerates, collaboration and communication become more important,” he said, adding that Damco will continue to work to make clients in the kingdom more competitive, while streamlining their supply chains.
Sin Chanthy, the president of the Cambodia Freight Forwarders Association (CAMFFA), told Khmer Times the sector has been facing a slowdown since April this year.
Due primarily to sluggish textiles exports, growth in the sector has decreased by 10 percent since April, he said.
“The majority of our exports are garment and footwear, so when the export growth for textiles decelerates it affects our sector,” Mr Chanthy said.
“The rising competition, the increase in real wages, the loss of revenue and an increase in shipment fees are all factors that have contributed to loss of competitiveness in the Cambodia logistics sector,” he added.
The World Bank recently revised its forecast for the kingdom’s real economic growth for 2017, lowering it by 0.1 percentage points to 6.8 percent. The revision follows a rise in wages in the country and a decline in export prices.
Export growth for textiles decelerated during the first half of 2017, sinking to 5.4 percent year-on-year, compared with 8.4 percent in 2016.
However, Mr Civardi said Damco has experienced strong growth in the last five years and expects a positive economic performance in the medium term.
He added that the slowdown in garment exports hasn’t hit the company as hard as some might expect because the company does not rely solely on textiles.
“We have been able to diversify our business quite well, which means that a reduction of business activity in one sector is often offset by more trade volumes in other industries,” Mr Civardi explained.