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Investment in SEZs up 683%
The total values for investment projects in Cambodia’s Special Economic Zones (SEZ) increased about 683 per cent year-on-year in 2011, according to a report from the Council for the Development of Cambodia.
The CDC approved 39 projects worth US$715.25 million in 2011. It was a 683.83 per cent hike compared with 2010’s figures, which totalled 22 investment projects worth $91.25 million.
The CDC report revealed that between 2006 and 2011, Cambodia’s SEZs received 96 investment projects worth $1.15 billion, which created jobs for 61,400 workers.
Several of the 2011 investments included electric equipment assemblers, something hailed by economists as Cambodia’s ascent up the manufacturing value chain.
Japan’s Marunix, a supplier of electronic parts to companies such as Sony, IBM and Canon, set up an assembly plant in the Phnom Penh Special Economic Zone last year, according to the CDC report.
Japan’s Sumi Wiring Systems Co Ltd also invested in Phnom Penh’s SEZ last year.
While SEZs near Phnom Penh and Sihanoukville have seen considerable investment since the Kingdom began developing the areas in 2005, the majority of the SEZs – situated on the Thai and Vietnamese borders – have not attracted substantial industry developments. Cambodia has 21 of the preferential tax zones.
Speaking at a seminar to promote SEZ development last week, General Secretary for CDC Sok Chenda Sophea said that SEZ investment has grown because of improving political, economic and social stability, coupled with skilled labourers, low prices, and the government’s efforts to encourage further investments.
“Cambodian investment law is open and encouraging to investors, in addition to offering benefits in the Cambodian markets,” he said, adding that current SEZ investors came primarily from Japan and China.
Nguon Meng Tech, general director of Cambodia’s Ministry of Commerce, said that the government had established the SEZs in order to attract investors to Cambodia, especially at border gates.
“They wanted to invest in those [border] areas because it was easier to do business, and because of the tax exemption in those regions,” he said.
He added that the SEZs attracting the most attention were primarily in Phnom Penh and Preah Sihanouk province, while in other distant border areas there was less investment due to bad infrastructure and problems with electricity.
Nguon Meng Tech said he remained hopeful of further development at more the more distant SEZs, given last year’s high investment rate.
“Although drawing attention to SEZs along the border will take time, these areas do have their advantages, and the government will establish infrastructure and electricity works in the near future,” he said.
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