75 new factories opened in Cambodia this year
There are now 2,195 registered factories in the nation as a result of the 75 new enterprises that the Ministry of Industry, Science, Technology, and Innovation registered between January and April of this year.
According to the research, which stated that the majority of investments came from China, South Korea, Japan, and Thailand, almost all of the new industries are clothing factories.
According to ministry spokeswoman and Secretary of state Heng Sokkung, the ministry registered 20 new factories in April alone, and 19 factories restarted production with a total investment of $284 million.
"As of April this year, the investment value of the fixed-asset factories reached approximately $19 billion, an increase of 14% over the same period in 2023," he stated.
Together, the registered factories provided 1.58 million jobs for residents of the surrounding area.
According to Vongsey Vissoth, Deputy Prime Minister and Minister in charge of the Office of the Council of Ministers, foreign direct investment (FDI) flows this year have primarily gone into manufacturing projects, in contrast to the pre-Covid-19 period when the majority of investments were in the financial and real estate sectors.
At the Cambodia International Business Exhibition 2024 on Sunday in Phnom Penh, Vissoth stated, "This is the result of Cambodia's new economic stimulus initiatives, which will be more resilient in the long run, as most of the investments are in manufacturing activities like electronics manufacturing, data center setting, and vehicle assembly, which reflects the restructuring of the Cambodian economy."
According to a General Department of Customs and Excise report, Cambodia exported goods worth $8 billion in the first four months of this year, up 15.2 percent from $7.60 billion in the same period last year.
Garment, footwear and travel goods industry is the largest foreign exchange earner for Cambodia.
The production of non-garment items in Cambodia is booming, including furniture, bicycles, automobile parts, electronics, leather, plastic, and other industrial goods.
Cambodia is the Next Manufacturing Hub for China
Cambodia is progressively becoming a top manufacturing location for Chinese firms as the global industrial landscapes shift. Thanks to its advantageous geographic position, affordable labor, and supportive investment regulations and policies, Cambodia is fast emerging as a manufacturing hotspot. This country in Southeast Asia is not only a more affordable option, but it also offers a climate that is conducive to development and expansion.
The key factors that make Cambodia an appealing choice for Chinese manufacturers and explore the advantages that position it as the next manufacturing destination.
1. Competitive advantages of setting up in Cambodia
Due to its reduced labor costs and lower minimum wages for workers in clothing and shoe factories, Cambodia is a popular manufacturing hub in Southeast Asia. Due to its central Southeast Asian location, the nation has good access to major markets, such as the ASEAN Free Trade Area and the Regional Comprehensive Economic Partnership (RCEP), which allow duty-free access to important markets like South Korea, China, and Japan. The construction of Special Economic Zones (SEZs) and the Cambodia-China Free Trade Agreement, which increases export potential, are two examples of the measures the Cambodian government has put in place to foster a positive investment climate. Tax holidays and import duty exemptions are two government initiatives that enhance the nation's appeal as a manufacturing powerhouse. The country is a desirable travel destination in part because of its youthful and expanding workforce.
2. Cambodia's infrastructure and supply chain ecosystem
Cambodia has made significant progress in infrastructure development, improving transport networks, ports, and logistics. Investments, including a projected US$28 billion between 2016 and 2040, have led to the expansion of Sihanoukville Port, road network improvements, and the establishment of the Phnom Penh Logistics Centre. The country's robust supply chain ecosystem, Special Economic Zones (SEZs), and strategic location within ASEAN facilitate efficient operations, making it a manufacturing hub.
3. Navigating regulatory and market entry in Cambodia
Cambodia's business-friendly regulatory environment and incentives for foreign direct investment give Chinese businesses a strategic advantage in the country's manufacturing sector. The nation's legal framework facilitates ease of doing business by streamlining customs clearance and registration processes. To cut down on time and complexity, the government has put in place programs like the "Single Portal" online business registration system. Wide-ranging market access and tariff reductions are made possible by Cambodia's participation in free trade agreements and ASEAN. Entry into the market is further facilitated by the nation's strong Chinese business community, bilateral trade agreements, and cultural and linguistic milieu. Collaborating with regional legal authorities can guarantee adherence to regulations and optimize business efficacy.
4. Leveraging DHL Express global logistics network for expansion into Cambodia
Competitive labor rates, a positive business climate, and robust trade agreements are just a few of the strategic benefits that Cambodia provides to Chinese manufacturers. An experienced logistics partner is essential to establishing operations in Cambodia. DHL Express can offer customized solutions because of its broad experience in international logistics and its presence in Cambodia. Their expertise in supply chain optimization guarantees effective resource management, which lowers expenses and boosts output. Custom solutions from DHL Express ease cross-border transitions by taking care of everything from last-mile delivery to customs clearance. Chinese businesses may swiftly expand into the Cambodian market by using their strong network to confidently handle the challenges of international logistics. Chinese companies looking to expand into Cambodia should think about consulting with DHL Express to ensure a smooth and effective process