A female Cambodian worker at a Japanese-owned factory at the Phnom Penh Special Economic Zone. Reuters
Cambodian exports to Japan, the world’s third-largest economy, rocketed last year – reflecting investment flows in recent years.
According to the latest figures from the Japan External Trade Organization (JETRO), exports to Japan reached more than $1.2 billion last year, an increase of 24.4 percent compared with a year earlier.
Commerce Ministry spokeswoman Soeng Sophary said that the rise was mainly due to political stability and sound and strong economic growth, meaning that Japanese investors were injecting their cash here.
“Before, we were a country that mainly got soft loans from Japan but now we can attract them to invest here,” she said.
She added that most of the Japanese investors are investing in the electronics sector and pumping money into firms such as Minebea, a small appliance motor manufacturer, to supply other companies in Japan and around the world.
“Once they set up the factory here, they will export their products to their supply chain at the parent companies,” she said.
“The flow of investment from Japan doesn’t only help us diversify our export base of garments to electronics. It also brings skills to the country.”
Last week, the Young Entrepreneurs Association of Cambodia (YEAC) and the Young Entrepreneurs Group (YEG) of the Japan Chamber of Commerce and Industry signed an agreement to build their relationship, boost trade and push investment. Koji Okamura, YEG chairman, said more investors from Japan would invest in Cambodia. He said real estate and agriculture would be the main sectors in which there would be cooperation.
“They will have more businesses with which to form a joint venture or partnership,” Mr. Koji said.
Hidehisa Horinouchi, the newly appointed Japanese ambassador to Cambodia, said Cambodia’s large number of young people and sound economic growth were competitive factors which would impress potential Japanese investors.
“Cambodia is a young developing economy and with many young people, so we try to see this cooperation between the young entrepreneurs of both countries to help development of the country and the profitable development of Japanese companies,” he said.
Ms. Sophary said that as Japan specializes in the automobile industry, Cambodia has a lot of room for investments such as supporting plants for the supply chain.
“I do believe that we will bring more investment from Japan in the automobile industry to our country very soon because there is a big Japanese automobile industry in neighboring Thailand,” she said.
“So, they will set up their factories here to supply factories in Thailand because our labor force is still low-cost and competitive,” she said.
Akira Odagaki, general manager of Isuzu’s representative office for Cambodia and Laos, told Khmer Times that the automobile company is focusing on Cambodia due to the kingdom’s economic growth.
“Cambodia’s economic growth has been very impressive – and now, it’s one of the fastest-growing economies in Asean. These are all the plus points we tend to look at,” said Mr. Odagaki.
“We forecast a stable growth for new automobiles in Cambodia. For us, at Isuzu, we expect an over 10 percent market growth overall in the country. In five years’ time, we hope to have a 30 percent market share of the light commercial vehicle market.”