Cambodia still remains a satellite state of Vietnam ... even in economy

11/05/2007
Export to Cambodia, opportunity for Vietnamese enterprises

Ministry of Finance
Socialist Republic of Vietnam (Hanoi)

"... enterprises must pay attention to economic policies and export-import in Cambodia. Investment environment’s lack of explicitness will make difficulties and arise problems for enterprises ..." - Warning from the VN Ministry of Finance to VN companies operating in Cambodia

Cambodia is appreciated an attractive market to Vietnamese exporters. In this country, enterprises can carry out investment projects, producing material for home factories or export to the third country. What export and investment measure can Vietnamese enterprises bring to this neighbor country?

According to the Ministry of Trade, total export value was US$770 million in 2006, including re-export petrol to Cambodia and forecast to US$930 million in 2007. Cambodia is the 16th biggest export market of Vietnam and Vietnam is the fourth largest exporter to Cambodia, behind Thailand, China and Hong Kong.

Vietnam aimed to over US$1.7 billion in total export value in 2010 and over US$5.2 in 2015. Statistics of Vietnam Custom said major exports from Viet Nam to Cambodia include fuel and mineral products make up 41.5% and industrial products make up 50.3%. Vietnamese experts cross the border gates in the southern region, Tay Ninh province and An Giang province to Cambodia. According to the Ministry of Trade, Vietnam can promote exports to Cambodia such as:

Instant noodles: Instant noodles export from Vietnam to Cambodia grew strongly an average 62% a year, from US$4 million in 2001 to US$23 million in 2005; make up about 55% total instant noodles import value in this country. Milk was smaller than instant noodles US$1.86 million in 2005, make up 40% total milk import value in Cambodia.

Cosmetics and detergents grew by 30% but it’s competed with Thailand, which holdings 42% market share, double Vietnam. It doesn’t mean that export from Vietnam is impossible to compete with Thailand in 2001-2005 periods. Vietnam’s growth increased 50%, compared with Thailand’s 18%. Cambodia imported US$60 million in medicine because production possibility is impossible or limited.

Plastic products and rubber from Vietnam hold 64.6% total its import value in Cambodia owning to competitive price with Thailand despite of its lower quality, and export value continue increasing with the maintaining price. Tyre and tube’s export value is from US$3-4 million a year.

Electrical equipments, machine from Vietnam hold market share less than Thailand and China but the differential rate isn’t much in turn 21%, 31% and 25%.

Cement, steel and material forecast to US$2,7 billion in 2012. Vietnamese enterprise should penetrate the low and median income market, and have relations with appropriate authorities to join in tenders, link to Vietnamese building companies and establish direct channel of distribution to consumer. Steel holds 27% market share compared China’s 22% and Thailand’s 29%. Petrol holds 56% market while Cambodia’s demand increase 13% a year.

Beside these goods, enterprises need to promote export because there’re many opportunities for other Vietnamese exports such as: textile, footwear, paper, household appliance, transportation, timber, aquatic product, farm produce,... in this large market.

However, enterprises must pay attention to economic policies and export-import in Cambodia. Investment environment’s lack of explicitness will make difficulties and arise problems for enterprises...

Source: Thời báo Kinh tế Việt Nam