Spotlight on Phnom Penh: Asean summit helps Cambodia woo investors, including some wary Thai businesses

26/03/2012
Anucha Charoenpo
Bangkok Post

"It is necessary for us to find cheaper labour markets or our businesses won't survive. Cambodia is our target"

The Cambodian government hopes to use its status as the Asean chair this year to attract investors from Southeast Asia and beyond, but despite the red-carpet welcome from the government, some scepticism remains among Thai investors.

The 20th Asean Summit will be held in Phnom Penh from April 3-4, and authorities hope to use it as a magnet to encourage foreign investors to study the possibilities Cambodia offers.

"Cambodia is now a gateway in Asean. We welcome all foreign investors. Our government policies are business-friendly for investors. We respect the basic human rights of the people and we are not divided by colours," Cambodian government spokesman Phay Siphan said in a reference to political tensions in Thailand.

One of the government's big concerns, he noted, was the protection from exploitation of Cambodian workers who have travelled abroad in search of better-paying jobs.

Cambodia stands out among CLMV [... for Thai investments]

January 20, 2012
The Nation

Among Cambodia, Laos, Burma and Vietnam, widely abbreviated as CLMV, Cambodia is the most outstanding investment destination for Thai companies thanks to the country's free-trade policy and abundant natural resources, according to the Trade Negotiations Department.

Srirat Rastapana, director-general of the department, said that though Cambodia was the last to join Asean in 2009, its trade policy is the most liberalised among the four countries under the government’s policy to draw foreign investment and reduce poverty.

Thai-Cambodian talks to neutralise exploration conflict

December 29, 2011
The Nation

Cambodian Deputy Prime Minister Sok An called for a renewed discussion with Thailand over power generating and conflicts over overlapping petroleum exploration area, said Energy Minister Pichai Naripthaphan.

After his meeting with the Cambodian minister today, Pichai said that Sok An wanted all conflicts cleared within a year and a half, for the mutual benefits of both countries.

Pichai noted that the matter is now upto the Foreign Affairs Ministry’s negotiation team. He insisted that no particular person would gain benefits if the negotiation allows a joint development similar to what Thailand agreed with Malaysia or Vietnam. To lead the Thai investment is PTT Plc, which is majority owned by the government, he said.

Thai Bangchak gas stations coming up in Cambodia?

Bangchak to Spend $822 Million Between 2011-2015 on Expansion


Sep 20, 2011
By Supunnabul Suwannakij
Bloomberg

Bangchak Petroleum Pcl (BCP), a Thai state-controlled refiner, plans to spend 25 billion baht ($822 million) between now and 2015 to expand solar power plants and improve the efficiency of its refineries, President Anusorn Sangnimnaun said.

The company also plans to build gas stations in Cambodia, Laos and Myanmar, Anusorn said. Bangchak’s profit in the second half of this year will be lower than the 4.4 billion baht in the first half because of volatile oil prices, he said.

Thai investors 'welcome in Cambodia' [-The smell of money is irresistible to the CPP?]

30/03/2011
Wassana Nanuam
Bangkok Post

Despite the long-standing border conflict between the two countries, the Phnom Penh government insists Thai investors are welcome in Cambodia.

Thai investors, too, are confident the tense border conflict will not affect their investment plans.

Cambodian Minister of Tourism Thong Khon said Thai investors are eligible for tax privileges and Thai products imported by them are exempted from taxation for a period of three to eight years.

Mr Thong Khon was full of praise for such Thai businessman as Supachai Verapuchong, managing director of the Sofitel Phnom Penh Pookeerhra Hotel, for his continued investment in Cambodia even though the hotel, formerly known as the Royal Phnom Penh, was severely damaged in an anti-Thai rioting in Phnom Penh in December 2006.

Diplomacy set to pay dividend in Cambodia [-Bangkok just realizes that?]

Thailand seeks lead role in investment

6/09/2010
Phusadee Arunmas
Bangkok Post

Thailand hopes to regain its leadership in foreign investment in Cambodia over the next five years now that the two countries have resumed diplomatic ties after months of strained relations.

Thai investment in Cambodia has fallen dramatically over the past seven years.

The relationship between the two soured notably in 2003 when the Thai embassy and some Thai businesses were heavily damaged by rioters in Phnom Penh. They had been reacting to fabricated reports quoting a Thai actress as saying that Angkor Wat belonged to Thailand.

Relations subsequently improved but became strained again last year as the two countries feuded over the Preah Vihear temple, leading to their ambassadors being recalled. Both envoys last month returned to their jobs, and Premier Abhisit Vejjajiva and Prime Minister Hun Sen are expected to hold talks later this month.

Thailand's investments based on approvals by the Cambodia Investment Board totalled only five projects worth US$15.5 million last year. The country ranked sixth in project numbers and third in project value, behind China ( $42.3 million) and Vietnam ($24.7 million).

Over the past 16 years, Thai investments in Cambodia totalled 81 projects worth $362.35 million. Most were in hotels, agro-industry, wood processing, food processing, telecoms, medical services, electricity, mining, garments and shoes.

Deputy Commerce Minister Alongkorn Ponlaboot said Thailand had potential to resume its leadership in foreign investment in Cambodia, if it can capitalise on the potential of National Road No. 5 as the land transport gateway to Vietnam and China.

The 407-kilometre highway connects Phnom Penh with Aranyaprathet in the Thai border province of Sa Kaeo. From Phnom Penh the road links to the Moc Bai-Bavet border crossing with Vietnam.

Mr Alongkorn and a group of Thai businesspeople recently travelled the road through Cambodia to Vietnam to explore the potential.

He said the Thai government planned to set up a special economic zone in Ban Pa Rai in Aranyaprathet to promote ties with Cambodia. It would offer comprehensive import-export services, distribution centres, customer services and an industrial estate covering about 1,000 rai.

The zone would be linked with Cambodia's Poipet O'Neang Special Economic Zone which occupies 2,000 rai opposite Ban Pa Rai.

Mr Alongkorn said the zone would be proposed to economic ministers and the cabinet in the new two weeks.

The special economic zone would be the second with a neighbouring country after the one that straddles Mae Sot district in Tak and Myawaddy in Burma. A special economic zone gives entrepreneurs more investment flexibility through such things as relaxed labour rules.

Thailand is currently the fifth largest trading partner of Cambodia behind the United States, Vietnam, China and Hong Kong. Bilateral trade between the two countries totalled $492.8 million last year, $477.2 million of which came from Thai exports.

Thai firms say crisis will pass

July 29, 2008
By Petchanet Pratruangkrai
The Nation

Despite continued controversy about Preah Vihear Temple, Thai companies yesterday vowed not to withdraw their investment from Cambodia.

Somsak Rinruengsin, chairman of the Thai Business Council of Cambodia, said Thai businessmen were still operating in Cambodia as usual.

"Private enterprises believe that the conflict should not be brutal. All transactions are still on track. I believe that Thai companies will not withdraw investment as most are in heavy industry and have spent huge investment capital," said Somsak.

Many large Thai companies have invested in Cambodia, including PTT, ThaiBev, Mitr Pol, CP, SCG and Imperial Group.

Somsak said about 100 Thai SMEs such as restaurants and retailers were still operating normally in Cambodia. Most Cambodian people still have a positive attitude towards Thailand and Thai products.

However, Thai exports to Cambodia slightly dropped in late July due to Cambodia slowing down consumption during its national election.

Jiranun Wongmongkol, minister counsellor (commercial) at the office of commercial affairs at the Royal Thai Embassy in Phnom Penh, said two-way trade was still running smoothly.

"Bilateral trade and investment are normal. But the anti-Thai goods and currency campaign that started on July 25 has slightly affected Thai goods," she said.

She believed the situation was returning to normal.

According to the Commerce Ministry, exports to Cambodia grew sharply by 71.8 per cent in the first half of the year, the highest growth rate in five years, thanks to rising demand for Thai goods and growing trade relations.

Exports to Cambodia reached US$1.08 billion (Bt36.19 billion), while imports jumped 133.79 per cent to $39.9 million.

Exports to Cambodia are expected to reach the target of $1.69 billion this year, an increase of 25 per cent.

At a seminar entitled "Investment overseas: Challenges for Thai Private Enterprises", companies were urged to strengthen trade and investment in neighbouring countries, particularly Cambodia.

Thai enterprises have the potential to invest in neighbouring countries, increasing win-win opportunities for both sides, the seminar was told.

Many investors from China, South Korea and Malaysia have invested in Cambodia.

Deputy Commerce Minister Viroon Tejapaiboon said the Asean Economic Cooperation would focus on strengthening relations with Cambodia, Laos, Burma and Vietnam (CLMV).

Thailand's aim will be to expand agricultural and industrial investment to those countries where cheap labour costs and abundant raw materials will reduce Thailand's production costs. In addition, Thai companies plan to develop manufacturing technology in those countries.

"These neighbouring countries have a rich supply of raw material for our production and lower labour costs. Thus, Thailand should move to invest in the countries," he said.

Narongchai Akrasanee, executive chairman of the Export-Import Bank of Thailand, said the bank supported the Thai private sector in investing abroad, particularly Cambodia.

"We should separate the dispute about Preah Vihear Temple from business. Cooperation between Thailand and Cambodia could generate a huge benefit for both sides," he said.

The bank has approved loans amounting to Bt13 billion for Thai investment in CLMV countries.