Poipet tax revenues fall by close to 50pc

Tuesday, 05 January 2010
Soeun Say
The Phnom Penh Post

CUSTOM tax revenues at the Poipet International Border Checkpoint fell by almost half in 2009 compared with a year earlier amid fallout from the global economic crisis, a reduction on duties on some products and political tension with Thailand.

Revenues fell 48.81 percent to US$40 million in 2009, down from $79 million in 2008, the checkpoint’s Chief Customs and Excise Officer Chuop En said.

“Imports of general goods has fallen a lot because of the influence of the global economic crisis and the Cambodian-Thai conflict,” he said.

A reduction in duties on cement imports from 15 percent to 5 percent in 2009 also contributed to the checkpoint meeting just 80 percent of its revenue target for the year, Chuop En said.

The setback came after the they exceeded targets in 2008, he added.

Cement imports through the border declined from 444,073 tonnes in 2008 to 385,385 tonnes last year as construction activity in the Kingdom fell significantly, their figures showed.

Imports of motorbikes fell 62 percent over the period from 196,241 in 2008 to just 74,313.

Chuop En said trade in the two goods were key indicators of the health of the local and regional economy.

Tim Daro, chief of police at the checkpoint, said about 5,000 Cambodian people crossed the border into Thailand every day to work or trade in goods. He said the political conflict with Thailand had had no impact on their activities.

“There is still good relations between Cambodian and Thai people in their business,” he said.

However, Sok Poy, a 38-year-old taxi driver at the border, said there were fewer customers since the Cambodia-Thai dispute. “Last year [2008] I could earn 40,000 riels per day, but this year I earned only 20,000 riels per day,” he said, “Customers are very scarce now. It is not like before.”

According to a local trader who has made a living from importing goods into Cambodia from Thailand since 1983, as economic conditions worsened, border officials were requiring more informal payments, asking for 20,000 riels ($4.80) per cart of goods imported.

Seung Ny said her profits had decreased from around 60,000 riels per day to between 30,000 and 40,000, making it harder to afford the informal charges. She also needed to pay police and Ministry of Agriculture, Forestry and Fisheries officials to verify the health of imported animals, she added.

Cambodia Ports See Traffic Drop by Double Digits in 2009

2010-01-04
Xinhua

Cambodia's three major ports saw shipments and revenues fall in 2009 as garment and construction trade slumped, local media reported on Monday, citing operators.

Officials from the Kingdom's largest port, Sihanoukville Autonomous Port (PAS), were quoted by the Phnom Penh Post as saying that revenues declined an annualized 16 percent in 2009, from 28.8 million U.S. dollars to 24. 19 million U.S. dollars.

The gross amount of cargo going through the Sihanoukville fell by around 13 percent and the number of containers handled by around 20 percent, they said.

In the last 12 months, revenues at Phnom Penh Autonomous Port ( PPAP) fell 15 percent.

Oknha Mong Port, in Preah Sihanouk province, saw cargo shipments -- mostly construction materials, consumer goods and fruit from Thailand -- reduce by 10 percent.

Lou Kim Chhun, director-general of PAS, on Sunday blamed the slump on falling garment exports and construction imports.

According to statistics from the Commerce Ministry's Trade Preferences System Department, obtained last week, garment exports plummeted 20.83 percent to 2.14 billion U.S. dollars in the first 11 months of 2009, compared with 2.71 billion U.S. dollars in the same period of 2008.

But Lou Kim Chhun, who emphasized that PAS still operated at profit, remained hopeful about the year ahead. "We expect to see revenues return to 2008 levels due to increased output in agricultural products such as rice and corn. This will increase exports," he said.

Eang Veng Sun, deputy general of PPAP, was less positive, adding that he believed 2010 could be similar to last year.

In Slump, Officials Look to Small Businesses

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
26 May 2009

With the global downturn slowing large-scale investment in Cambodia, commerce officials are hoping that small and medium enterprises can boost growth.

“SMEs play an important role in enhancing economic development and creating sustainable employment and income,” Commerce Minister Cham Prasidh told a seminar Tuesday. However, he said, about 80 percent of these enterprises never get loans from banks, he said.

Cambodia’s economy is expected to contract between half a percent and a full point, a drastic fall from the near double-digit growth it has experienced in recent years.

US and European demand for its exported garments has plummeted, while tourism numbers have dropped, but agriculture remains the top employer. Cambodia set up a new policy to help smaller businesses, especially in agriculture, pull the country along.

“This will include a new facility to provide loans to SMEs in agriculture and agribusiness to be launched tentatively in fall, 2009,” the government said in a joint statement with UNDP and the International Trade Center.

“Cambodian SMEs are suffering from a shortage of credit, coupled with relatively high interest rates applied by banks to small businesses, resulting in, often, a lack of sufficient working capital for the enterprises,” Cham Prasidh said. “Access to finance is one of the major impediments in Cambodia to producers and exporters of commodities.”

National Bank Director-General Tay Nay Im said local and international partners were giving training to smaller enterprises “by all means” to help produce “more reliable financial statements and applicable business plans” to help assess the risks of their businesses.

“This last task is very challenging and complicated and time consuming,” she said. “We need a lot of effort. By doing this, the obstacle to the small and medium enterprises in getting access to finance has been removed.”

The International Trade Center has negotiated with commercial banks to provide small loans, Roger Megelas, the center’s senior adviser for small and medium enterprises, told reporters Tuesday.

“We reached two commercial banks which will begin to provide loans in October 2009,” he said. “We will provide loans to 100 small and medium enterprises.”

ILO: 500,000 Cambodians hit by economic slump [-Cambodia's Strongman will never believe this, even if he can see it with his eye]

PHNOM PENH, Feb. 13 (Xinhua) -- Some 500,000 Cambodians have been affected by the global economic downturn, English-language daily newspaper the Phnom Penh Post on Friday quoted the International Labor Organization (ILO) as saying.

Another one million are expected to feel the pinch in 2009, said an ILO report of economic assessment of the kingdom.

ILO predicted 19,000 job losses in the garment sector and 25,600 in construction, as well as 5.1 percent growth in gross domestic products (GDP) in 2009.

Meanwhile, it urged the Cambodian government to take strong action to cushion the effects of the crisis, including establishing a central job information system, an unemployment program and a multi-sector trade union.

The Cambodian economy was estimated to grow by only seven percent in 2008 and the government is trying to maintain a six percent growth in 2009.

The International Monetary Fund (IMF) predicted 4.8 percent economic growth, while the World Bank has forecast 4.9 percent GDP growth for Cambodia in 2009.

Motorbike sales nosedive as local economy slumps

Motorbike shops along Sihanouk Boulevard near Olympic Stadium. Dealers report slower sales compared to last year. (Photo by: Sam Rith)

Wednesday, 19 November 2008
Written by Sam Rith
The Phnom Penh Post

Local motorbike dealers report slower sales as the falling property market and declines in foreign investment hit consumer spending at home

THE global economic crisis and a weakening property market have hit local motorbike sales, with dealers reporting drops of as much as 70 percent this year.

"Last year I did not have enough motorcycles to meet demand, and a lot of customers booked their vehicles in advance. But this year I have a lot of remaining bikes in my shop," said Chhay Ly, owner of Chhay Ly Honda Motorcycle Shop on Kampuchea Krom Boulevard.

He said his profits have nearly evaporated and he now sells only four or five bikes per month, at US$980 to $2,300 each, down from about 12 last year.

"The drops are caused by the slow economy," he added.

Motorbike sales soared last year and in the first half of 2008 as Cambodians cashed in on the strong property market and record foreign direct investment.

But with the economic crisis spreading to local markets and property values in freefall, motorbike dealers are feeling the pain of consumer belt-tightening.

Principal form of transport

Motorcycles are the Kingdom's most common form of transport, and the government says that 800,000 bikes are registered in the country.

"This year has been very quiet. Last year, a lot of people bought bikes at my shops."

"This year has been very quiet. Last year, a lot of people bought bikes at my shops - most were people who made money from selling their land outside of Phnom Penh," said Chhim Neang, owner of Chhim Neang Selling Motorcycle Shop. She reported a 40 percent sales drop, which she blamed mainly on the property market.

Keo Rottana, director of MCT Motorcycle Manufacturing (Cambodia) Co Ltd, which is a wholesaler of electric bikes, all-terrain vehicles and small electric cars from China, said his sales have dropped significantly, even after he cut prices from $600 to $550 each.

"We have seen a lot less buy orders from the provinces."

He said last year his company sold about 2,000 units, but this year sales dropped about 30 percent.

Another wholesaler, Pok Phalra, director of JM Japan Motorcycles Shop, said he has sold virtually no second-hand motorcycles imported from Japan.

"This year, sometimes I sell one bike and sometimes none," he said. "Last year I could sell up to eight bikes per day."

Cheng Song Heap, owner of Cheng Song Heap Motor Shop, a major motorcycle retailer in Phnom Penh, also said he has been affected by a drop-off in business.

"People are now depending on their salaries. They are not seeing large profits from land sales like last year."

According to a local property expert, the real estate market may not recover any time soon.

"It takes about one to two years before land prices will return to normal," said Sung Bonna, director of Bonna Reality.

Finance Minister Keat Chhon confirmed early this month that Cambodia's economic growth would slow to 6.5 percent next year.

Garment factories worry about slumping sales

Friday, 01 August 2008
Written by Kay Kimsong
The Phnom Penh Post

Trade officials and economists say the garment sector is threatened with a slowdown over coming months if productivity does not increase.

For the first three months of 2008, garment exports plummeted to US$1 billion from $1.99 billion at this time in 2007 and $1.9 billion in 2006.

“The garment sector is slower than in past years, we fear that additional costs would lead factory owners move to other places,” said Cheat Khemara, senior labour officer for the Garment Manufacturers Association of Cambodia (GMAC).

“The most valuable [garment] exports and textiles went to China, while Cambodia gained only workers’ salaries and factory rental fees,” he said, adding that factory managers have become increasingly concerned over rising operating costs.

“Once the Ministry of Labour implements the salary tax, factory owners will have to pay US$0.80 for each worker. This is a new cost for garment factory operators,” he said.

“They have suffered with highly electricity costs, low productivity and too many strikes.”
Some 326 factories operate in Cambodia after 10 closed last year, employing 360,000 workers.

A slowdown in the sector would be devastating for countless families depending on the monthly wages of workers.

“I would encourage our workers to work hard to compete with China. In Vietnam and China, people want to work, because they want to make money,” said Free Trade Union President Chea Mony, who blames factory owners for the strikes which have hit hard productivity.

Others, however, blame the numerous unions for falling productivity, and the loss of business to neighbouring countries.

“It would be nice if the ministry allows only three unions,” said Nguon Meng Tech, Director General of the Cambodian Chamber of Commerce, warning that the sector could collapse if it does not pick up the pace.

“Look at China, there are no unions. People love working hard to make money,” he said.

Economist Sok Sina agreed that better productivity was needed to ward off competition from China and Vietnam, especially since US safeguards against some Chinese textiles are set to expire at the end of the year.

“Buyers need Cambodian goods to arrive at the market on time. If goods do not arrive on time, buyers will stop ordering from Cambodia,” he said.

But he added that imminent collapse was not likely.

“I think our garment sector for first half year of 2008 is not too bad, because besides the US market, we have exports to the EU market as well,” said Sok Sina.

Thon Virak, deputy director general for the Foreign Trade Department at the Ministry of Commerce, told the Post on Wednesday that diversification was key to the garment sector’s survival.

“I think our garment sector is doing fine because we have expanded into the EU and Canadian market,” said Thon Virak. “It is a bit slow, but not too bad.”

But even a slight slowdown could be enough to scare factories out of Cambodia, said GMAC’S Cheat Khemara.

“If production process slows, buyers would stop ordering from factories here, but looking for other places,” he said.