BUSINESS AND INDUSTRY IN CAMBODIA

BUSINESS IN CAMBODIA

Cambodia remains a largely cash-only economy and a high degree of mistrust means many people hoard their money at home instead of using banks. Cambodia has a long-term goal to reduce reliance on the greenback, which according to the Asian Development Bank makes up more than 90 per cent of all currency in circulation in the country. [Source: AFP, July 11, 2011]

As of 2004, Cambodia had no laws regarding bankruptcy or incorporated statutes. See WTO.

A politically-connected, private company called Sokimex has a monopoly on fuel and military supplies. It also collects the entrance fees to Angkor Wat.

Twenty-seven banks merged in the go-go 1990s. When laws were introduced in 2000 that required them to have at least $5 million capitalization three promptly went out of business. When the capitalization rate rose to $13.5 million eight more closed.

Corporate tax rate: 20 percent, compared to 17 percent in Singapore and 35.6 percent in Japan.

Cambodia Securities Exchange

The Cambodia Securities Exchange (CSX) is the national stock exchange of Cambodia. Founded in July 2011, its purpose is to achieve high economic growth by facilitating flows of capital, investment, and reallocation of capital based on capital market mechanisms. The exchange is headquartered in the Canadia Tower, in Cambodia's capital city, Phnom Penh. [Source: Wikipedia +]

In July, 201, AFP reported: “Cambodia launched its long-awaited national stock exchange on Monday, aimed at boosting economic growth -- but trading is not set to start for months because of a string of delays. During the opening ceremony for the exchange, Economy and Finance Minister Keat Chhon said the event was "an important historical day for the Cambodian financial sector" and a new source of "national pride". "It clearly reflects that Cambodia has been moving forward to another stage of financial sector development," he said, describing the Cambodia Stock Exchange (CSX) as "a new instrument" for saving and investment.[Source: AFP, July 11, 2011 ~]

“Cambodia signed an agreement to set up the stock market -- a joint venture between the government and South Korea's stock exchange -- in 2008 and planned to open it in 2009. However, the launch date was pushed back twice due to the global downturn and regulatory hurdles. The Korea Exchange, which has a 45 per cent stake in the CSX, has a similar interest in the recently-opened bourse of Laos. Keat Chhon said three state-owned enterprises had been instructed by the government to work on listing their stocks for trading. ~

“In November 2010, 15 securities firms were granted licences as underwriters, brokers, investment advisers and dealers to operate on the bourse. Stock quotations for trading must be in local currency -- the riel -- only, the Securities and Exchange Commission of Cambodia (SECC) said in March. But for the first three years, both buyers and sellers can arrange to settle payments in US dollars at their agreement, according to officials.” ~

On April 18th 2012, Phnom Penh Water Supply Authority became the first domestically listed company on the Cambodian Securities Exchange. Its shares went up 48 percent on the first day of trading after investors sought more than 10 times the available stock. Leopard Capital, the frontier market private equity group, participated in the IPO through its Leopard Cambodia Fund. Three state-owned enterprises have been instructed by the government to list their stocks for trading. 1) Phnom Penh Water Supply; 2) Telecom Cambodia; 3) Sihanoukville Autonomous Port. Of these three the only company that is actually listed is: Phnom Penh Water Supply Authority. +

Trading is executed through a single-price auction process from 8:00am to 11:30am, with matching at 9:00am and at 11:30am. Settlements between members and CSX are carried out through 3 participating banks: ACLEDA Bank, Canadia Bank, BIDC. All securities listed and traded on the CSX are deposited with the CSX. CSX is composed of the following departments: 1) Administration and Finance Department; 2) IT Department; 3) Listing and Disclosure Department; 4) Market Operations Department; 5) Clearing and Settlement Departmentl 6) Depository Department. +

Business in Cambodia in the 1980s

Domestic commerce consisted essentially of contracts between agricultural producers and the state on the one hand, and the private free market on the other hand. Rice was the principal commodity sold to state purchasing agencies in exchange for farm implements, consumer goods, or cash. The state increasingly found itself in competition with private merchants for the procurement of rice. In order to force the peasants to sell rice to the state, the government prohibited private rice traders from transporting rice across provincial borders, a measure that had only limited success. In 1986 state rice procurement amounted to only 154,000 tons, or to just over half of the government's goal of 300,000 tons. Farmers believed that the state purchase price of 2.5 riels per kilogram of unmilled rice was less than the cost of production. [Source: Library of Congress, December 1987 *]

In addition, because the government had insufficient supplies of goods such as fertilizer, cloth, and soap to be traded as payment, farmers had little incentive to sell their crops to state buyers. Consequently, in August 1987, the government raised the amount paid to farmers for monsoon-season (long-cycle) unmilled rice from 2.5 to 5.5 riels in an effort to narrow the gap between the official and the freemarket prices. At the end of 1987, peasants still complained that the price paid by the state was too low. For example, one kilogram of improved IR rice seeds was priced at between ten and fifteen riels on the free market, but it cost only six riels on the official market. *

In contrast to shrinking state domestic trade, private trade continued to grow and to prosper with governmental approval and encouragement. Spouses of high party officials and cadres were actively engaged in petty trade to bring additional incomes to their families. Government workers also moonlighted by working in the private sector to augment low salaries and to make ends meet. Thousands of retail shops, private markets, and restaurants proliferated in Phnom Penh and in other cities. Shops and markets offered a variety of consumer goods, from gold and silver to bicycles and illegally imported consumer items, such as Seiko watches and Heineken beer. *

Small Businesses and Microcredit in Cambodia

Small loans from a bank called Acleda have helped a number of small time entrepreneurs and business people get started. As of 2001, the bank had helped 58,000 noodlemakers, motorcycle taxis, fish sellers and other small businesses. One woman interviewed by Asian Business Week started an incense stick factory that employed three workers in 2001 and made profits of $8 a day, a tidy sum in Cambodia, and enough to pay for a relatively comfortable house and send all six of her children to school.

Acleda operates on pretty tough terms. It charges 5 percent interest per month, requires loan takers to have cosigners; and employs debt collectors that show up if a payment is even just one day late. In 2000, the bank had profits of $2.5 million and default rate of only 1 percent. Critics of Acleda say their interest rates are too high.

Cambodian Special Economic Zones (SEZs)

The Cambodian government is setting up special economic zones (SEZs) across the country. The Council for Development of Cambodia has approved 21 SEZs across the country. However, just eight of these are fully operational. The Phnom Penh Special Economic Zone (PPSEZ) is the most active-it has 47 companies on its campus as of 2012.

An SEZ has been established in the Cambodia port of Sihanoukville. The SEZ, according to a USAID report, offers pro-business perks to investors, a quick turnaround on red tape, low taxes, low wages, ease of doing business and a “young and educated” population. The minimum monthly salary for factory work was 60 dollars a month, or 33 cents per hour, which would necessitate working six days per week to make 60 dollars monthly. The Sihanoukville SEZ is located by Cambodia’s only full-fledges port. It is 70 hectares in size. It is being developed with ¥20 billion in loans from Japan. [Source: Independent European Daily Express, January 28th, 2013]

In March 2013, The Phnom Penh Post reported; “A group of Japanese businessmen signed a memorandum of understanding with Sonatra Group chairman Sorn Sokna to develop a special economic zone along the Mekong River at the site of the Prey Veng ferry terminals. The ferry service is expected to become redundant when the adjacent Japanese-funded bridge is completed in 2014. Sokna, the chairman of Sonatra Securities and a former Sokimex official, founded the Financial Institute of Cambodia and has been a minority owner of restaurants and real-estate projects. He said he already had 10 Japanese investors with commitments to build factories for phase one of the project, but was seeking commitment from 25 investors before the project got under way. [Source: Phnom Penh Post, March 5th, 2013]

In March 2012, The Cambodia Daily reported: The government last month granted four companies a total 23,000 hectares of land concessions for agro-industry projects and a special economic zone (SEZ), according to human rights groups, which said it obtained the information from government documents. An additional 500 hectares inside a wildlife sanctuary were also handed out for an eco-tourism project. The concessions are part of the government’s rapid sell-off of Cambodia’s land and forests, an approach that has now given agro-industrial firms control of about 2.1 million hectares, and which activists say has led to hundreds of land disputes and soaring deforestation rates.[Source: The Cambodia Daily, March 20, 2012]

2011 saw a record increase in economic land concessions and the area controlled by agro-industrial companies jumped to more than 2 million hectares nationwide, according to human rights groups who track such projects. Mining companies are also flocking to Cambodia and those already have received concessions to explore 1.9 million hectares of land for gold, iron ore, copper and other precious minerals. Together, these private firms now control 3.9 million hectares of land, or more than 22 percent of Cambodia’s total surface area, according to data from rights group Licadho.[Source: The Cambodia Daily, March 11, 2012]

The surge in concessions is causing major concern among rights groups, conservationists, governance experts and even donor countries, as it is set to dramatically worsen land disputes – already Cambodia’s most pressing human rights issue – and exacerbate the destruction of the country’s shrinking forests. Ministry of Agriculture Secretary of State Ith Nody said last week that only 1.2 million of hectares were granted to 118 agro-industrial firms, including 28 Chinese firms and 27 Vietnamese companies. Licadho, which based its calculations on official government documents, found that 227 plantation firms, several special economic zones and former state rubber plantations cover almost exactly 2 million hectares, about 800,000 more hectares than Mr. Nody reported. …

Shootings, Protests and Mass Faintings at Cambodia’s Special Economic Zone

In March 2012, The Cambodia Daily reported: Some of the world’s largest international clothing brands, along with foreign labor protection groups, have called on the Cambodian government to intensify its investigation of last month’s triple shooting of spectators at a Svay Rieng special economic zone. Signed by several of the biggest customers of the domestic garment industry, including H&M, American Eagle Outfitters and Columbia, the statement is the strongest condemnation to date from international buyers over both the shooting and the government’s still unsolved, and at times baffling, investigation of the prime suspect – former Bavet City Governor Chhuk Bandith.[Source: The Cambodia Daily, March 11, 2012]

Jill Tucker, chief technical adviser of the International Labor Organization’s Better Factories Cambodia, said the buyers’ joint letter reflected a feeling shared by other international buyers. “I think that the brands are concerned that it’s three weeks later and no arrests have been made,” Ms. Tucker said, adding that she has been told as much during conversations with representatives of clothing brands that source from Cambodian factories. … “It’s just one factor in many. But with the faintings, this is really just one more [factor], and we really don’t need one more.”

Two women who were shot and injured during a Feb. 20 protest at a special economic zone (SEZ) said they plan to file court complaints against Bavet City’s former governor, Chhuk Bundith. Nuth Sokhorn, 23, and Bun Chenda, 21, both said they will go to the Svay Rieng Provincial Court today to lodge their complaint against Mr. Bundit. [Source: The Cambodia Daily, March 13, 2012]

The Cambodian Legal Education Center (CLEC) is “extremely concerned” after an investigation following a mass fainting at Nanguo garment factory in Preah Sihanouk province last month found that at least one to two workers are fainting daily in eight factories in the province. Joel Preston, a consultant for CLEC, said yesterday that the three-day investigation involved talking to workers at eight garment factories – three of which are located within the province’s Special Economic Zone (SEZ) Workers were reporting faintings of one to two workers per day in certain factories among those eight, but fairly consistent from the ones inside the SEZ, Nanguo being one of those,” he said. [Source: The Cambodia Daily, March 11, 2012]

In March 2012, The Cambodia Daily reported: “About 50 people protested in front of Pailin Provincial Hall yesterday against a government plan to turn their farmland in Sala Krao district into a special economic zone (SEZ), villagers and officials said. “It is the villagers that abuse the government land. They took the government land and illegally grew crops of corn, bean and rice,” said Mr. Khan, adding that the troops had been stationed on the land to protect state property.

Industries in Cambodia

According to some sources the largest industries in Cambodia are illegal logging, prostitution, drug trafficking and money laundering. Village-level industries include carpentry, house building, thatch making, and mat and basket weaving. Part time artisans and craftsman make cotton and silk garments, silver objects, pottery, bronzeware and other goods. Manufacturing is quite limited.

For a long time Cambodia was known primarily as source of raw materials such as timber and gems. Now it produces more value-added products like doors and cut sapphires. The high-tech industry thus far is limited primarily to data-entry jobs. One project, launched by Harvard University’s student newspaper in the 1990s, employed Cambodians to type in text from old issues into a computer. The workers got $50 a month and work six days a week.

About 200 firms funded by ethnic Chinese capital have began operating in Cambodia in the early 2000s. They included clothing and shoe factories. Many of the goods are for exports.

Operating a factory in Cambodia has its limitation. Tyler Marshall, Evelyn Iritani and Marla Dickerson wrote in the Los Angeles Times: “Cambodia has little to offer factory owner Leon Hsu. Electricity is erratic. Traffic along the road to the port of Sihanoukville includes the occasional elephant. If a truckload of men's shirts doesn't reach the port on time, it may be days before another vessel departs for Singapore, where goods are transferred to a larger ship for the voyage to the United States. [Source: Tyler Marshall, Evelyn Iritani and Marla Dickerson, Los Angeles Times, January 16, 2005 =]

“Cambodia certainly doesn't boast the multilane freeways and high-speed telecommunications lines prevalent in the exporting zones of China. Foreign investors have been reluctant to put money into a country plagued by political unrest and illiteracy. The cash-strapped government can't afford to build new highways, upgrade the energy grid or modernize the Sihanoukville port, where inspectors tracking container traffic use pens and stacks of paper layered with carbon paper in a flashback to pre-photocopier, let alone pre-computer, days.

Industry in Cambodia in the 1980s

There was virtually no industry under the Khmer Rouge from 1975 to 1979. Not only that during the murderous reign of Pol Pot, Cambodia lost its business and intellectual elite, along with a generation of potential managers and entrepreneurs, when an estimated 1.7 million people were slaughtered or died of disease and starvation.

Industry accounted for only 5 percent of Cambodia's GDP in 1985, down from 19 percent in 1969. Industrial activity continued to be concentrated in the processing of agricultural commodities, mostly rice, fish, wood, and rubber. Manufacturing plants were small, and they employed an average of fewer than 200 hundred workers. These plants aimed to produce enough consumer goods (soft drinks, cigarettes, and food items) and household products (soap, paper, and utensils) to satisfy local demand. [Source: Library of Congress, December 1987 *]

The extent of Cambodia's industrial rehabilitation could be gauged by a comparison of enterprises in prewar and in postwar times. In 1969 the last year before the country was engulfed in the war sweeping Indochina, a census disclosed 18 large industries countrywide (13 public and 5 mixed public-private sector) and 33,000 small and medium privately owned enterprises. About half the factories operating in 1969 were rice mills, or were otherwise engaged in rice processing. In 1985 the government news agency (Sarpodamean Kampuchea) announced that fifty-six factories had been renovated and had been put back into operation. In the capital itself, about half of Phnom Penh's prewar plants had reopened by 1985. Most industries were producing at far below capacity because of frequent power cuts, shortages of spare parts and of raw materials, and the lack of both skilled workers and experienced managers. Industrial revival continued to be difficult and extremely slow because it was based mainly on the use of limited local resources. *

In early 1986, the major industrial plants in Phnom Penh included the Tuol Kok textile factory, the largest of six textile factories in the city (the factory was idle three days a week, however, because of power shortages). There were also four power plants, a soft drink plant, a tobacco factory, a ferro-concrete factory, and some other enterprises that produced consumer goods. *

In the municipality of Kampong Saom and in neighboring Kampot Province, rice mills, lumber mills, small brick and tile factories, power plants, an oil refinery, a tractor-assembly plant, cement and phosphate factories, and a refrigeration plant for storing fish were reported to be in operation. In the important industrial center of Ta Khmau, Kampot Province, were a tire factory (possessing its own generator, but lacking rubber and spare parts), several mechanical workshops, and warehouses. Batdambang Province had shops for repairing farm implements, a cotton gin and textile mill, a jute-bag factory, an automobile and tractor repair plant, and a phosphate-fertilizer plant. In Kampong Cham Province, the former center for tobacco growing and for cotton garment making, there were a cotton-spinning textile factory, some silk-weaving operations, and an automobile tire and tube plant. *

Small family-run businesses and private enterprises specializing in weaving, tailoring (silk sampot and sarongs, the Cambodian national dress), and small manufactured products grew more rapidly than public industries, and they contributed significantly to economic recovery. According to official estimates, the output value of local and of handicraft industries together amounted to 50 percent of the value of production in state industries in 1984. In Phnom Penh alone, there were 1,840 handicraft shops whose output value rose from 14 million riels in 1981 to 50 million riels in 1984. *

Textile Industry in Cambodia

The textile industry is important in Cambodia. According to Reuters: “Garment manufacturing is Cambodia's biggest foreign currency earner, a major employer and a vital source of income for many rural families who complain they can barely survive on the wages that are lower than neighboring Thailand and Vietnam. Strikes over pay and poor working conditions are common in the sector in Cambodia, Many western brands outsource footwear and apparel to Cambodian factories, in part because labor is cheaper than China. [Source: Prak Chan Thul, Reuters, January 3, 2014]

The garment industry generates more than $4 billion a year and employs 500, 000 to 650,000 people in more than 500 garment and shoe factories, making it the main source of income in the country. The International Monetary Fund says garments account for about 80 percent of Cambodia’s exports. The ending of quotas in 2005 “overall resulted in expansion and increased market shares” even many thought the opposite would happen. According to the Garment Manufacturers' Association in Cambodia, in 2008 about 300 plants in the country employed about 340,000 people. In 2006, Cambodia exported $2.75 billion worth of garment products, 70 percent of them to the United States and 25 percent to the EU. The sector grew 28 percent in 2010 and contributed more than $3 billion towards the country's $11 billion economy.

With its abundant supply of cheap labor, Cambodia became a major textile producer in the 1990s. In the early 2000s, the textile industry was comprised of 200 garment factories, many of them in an area 25 minutes from central Phnom Penh, that employ 16,000 people, absorb $150 million a year in investments and produce millions of shirts, hats and dresses, many of which ended up in U.S. department stores. Making clothes other leading U.S. and European retailers accounted for one-third of gross national product in 2003.

Most of the garment factories and workshops are owned by Chinese, Malaysian, Singaporean or Taiwanese conglomerates. They produce clothes for The Gap, J.C. Penney, Adidas, Ann Taylor, Reebok, Abercrombie & Fitch, The Limited OshKosh B’Gosh and others.

What is remarkable about Cambodia’s garment industry is that it has grown concurrently with a an effort to establish trade unions and implement modern labor policies. Trade agreement made with the United States give Cambodia bonuses and incentives such as larger quotas if workers are provided with safe factories to work in and are decently treated. The biggest problem faced by Cambodia’s garment industry is competition from China and other garment-making nations with abundant supplies of cheap labor.

Disputes over wages and safety conditions are common in the Cambodia's garment industry. Associated Press reported: “The government tries to strike a balance between workers' demands for higher pay and employers' desires to keep wages low. Many factories are subcontractors for large Western brands. Foreign investors are a key element in Cambodia's economic growth, while workers represent a potentially powerful domestic political force. [Source: Sopheng Cheang, Associated Press, October 23, 2012]

Workers in the Cambodian Textile Industry, See Labor

Cambodia’s Textile Industry and International Import Quotas

There were worries that when international import quotas ended in January 2005 Cambodia would be adversely affected. Tyler Marshall, Evelyn Iritani and Marla Dickerson wrote in the Los Angeles Times: “Designed to protect manufacturers in North America and Europe from foreign competition, the import quotas ended up working as a global version of Head Start, an affirmative action program for countries that had large, unskilled workforces and not much else. The last provisions of the 30-year quota system disappeared” in 2006 leaving some factory owners few reasons to stay in Cambodia when “far more efficient venues -- chief among them China -- with modern factories, highways and ports, prolific workers...Miss a shipping date out of southern China, and another vessel is leaving soon, often within 24 hours. And it's a direct shot to Los Angeles or Rotterdam, Netherlands. "I'll be happy to go," Hsu said. [Source: Tyler Marshall,Evelyn Iritani and Marla Dickerson, Los Angeles Times, January 16, 2005 =]

“The end of the quotas has triggered what trade experts believe could be one of the largest migrations of production in history, jeopardizing Cambodia's 220,000 apparel jobs. The case of Cambodia illustrates how hard it can be to compete for clothing contracts against the likes of China, where the apparel and textile industry employs at least 15 million people and entire towns are devoted to the production of socks or neckties. =

“But for a few decades, the textile and apparel quotas let Cambodia be a contender. Leon Hsu, a native of Hong Kong, moved to Phnom Penh in the early 1980s and opened four factories. He counted among his customers J.C. Penney and Wal-Mart. Because they were forced to order clothing from factories in more countries than they would have liked, Cambodia benefited. Another boon was a U.S. initiative that linked expanded import quotas to improved labor rights. Then came the phaseout. At the end of 2002, quotas on nightgowns and baby clothes expired. J.C. Penney, which had bought $600,000 of baby clothes from Hsu's Cambodian factories in 2001, cut its order by two-thirds the next year and to zero in 2003. =

“Wal-Mart, a buyer of women's nightgowns, told Hsu in 2003 that it wouldn't order from him unless he could lower his price to $5.95 a gown from $6.20. Hsu said he couldn't afford to say yes. "I lost 20 percent of my business right there," he said. "It's all gone to China." William Wertz, a Wal-Mart official, said he couldn't confirm the details of that transaction. But he said Wal-Mart was still buying nightgowns and other apparel from Hsu's Cambodian factories. J.C. Penney spokesman Tim Lyons said his buyers couldn't find any record of business dealings with Hsu's factories in Cambodia. =

“In Cambodia, with U.S. support, the government is working with the International Labor Organization on a program to improve working conditions in apparel factories. The hope is that big name brands will stay put and pay a little extra to support fair labor standards and reduce the possibility of becoming ensnared in a sweatshop scandal. That effort has won the backing of socially conscious U.S. retailers such as Gap. =

Worries that the end of international import quotas would undermine Cambodia’s textile industry proved unfounded. Today Cambodia is one of the few countries that can compete with China in the textile market.

Bicycle Industry in Cambodia

In January 2013, the Independent European Daily Express reported: “Cambodia’s export business is in the process of changing due to shifts in manufacturing in Asia. A business publication in the country has reported unexpected growth in the “machinery and transport equipment” sector and speculated it was as [sic] “probably bicycles.” But when Cambodia jumped into the top ten exporters of bicycles to the EU in 2012, it prompted the European Bicycle Manufacturers’ Association (EBMA) to investigate. [Source: Independent European Daily Express, January 28th, 2013]

The EBMA discovered that bicycle companies had moved their production to Cambodia from Thailand and China, citing increased expenses. The move is estimated to save 14 percent on taxes. A favourable scheme is in place for Least Developed Countries (LDCs) under the Generalized Scheme of Preferences (GSP) known as the Everything But Arms (EBA) agreement. The EBA allows countries ranked among the 48 LDCs to export products duty-free to the EU, except arms and ammunition.

The Special Economic Zone (SEZ), according to a USAID report, offers pro-business perks to investors, a quick turnaround on red tape, low taxes, low wages, ease of doing business and a “young and educated” population. The report listed 1,500 workers in the bicycle industry. The minimum monthly salary then for factory work was 60 dollars a month, or 33 cents per hour, which would necessitate working six days per week to make 60 dollars monthly. Dated 2008, this shows that wages have not risen in four years.. Sihanoukville SEZ is located by Cambodia’s only full-fledges port. It is 70 hectares in size. It is being developed with ¥20 billion in loans from Japan. [Source: Independent European Daily Express, January 28th, 2013]

'Telepathic' Car Symbolises Cambodian Car Industry Hopes

In November 2009, Chan Sovannara of AFP wrote: “The gold-coloured convertible turns heads on impoverished Cambodia's roads -- not least because of creator Nhean Phaloek's outlandish claim that it can be operated telepathically. "I just snap my fingers and the car's door will open. Or I just think of opening the car's door, and the door opens immediately," says the 51-year-old as he proudly shows off the homemade car, named the Angkor 333-2010. Onlookers gasp as he demonstrates the trick, and with the fibre-glass vehicle having cost him 5,000 dollars and 19 months of labour he is in no mood to reveal the remote control system behind it. But as with a handful of other Cambodians who make their own curious cars, he dreams the two-seater will help foster an automobile industry in the country, still poor after decades of conflict. "I am very excited and proud of this car because many people admire me and keep asking me about how I can make it," he says, adding that it reaches speeds of up to 100 kilometers (62 miles) per hour. [Source: Chan Sovannara, AFP, November 28, 2009]

Kong Pharith, a 48-year-old former maths and physics teacher who has also produced his own car, says an auto industry is about to blossom in Cambodia. "Our works will be part of a motivating force for the next generation to access new inventions and show the world that Cambodia has an ability to do what you think we cannot," he says. The inventor, who first came to national attention in 2005 for building a solar-powered bicycle, thinks he has now hit on a truly unique product with his orange, jeep-like vehicle with solar panels on its roof.

Kong Pharith says it took him four months to design and put the final polish on his "tribrid" car which operates on solar energy, electricity and gasoline, hitting speeds of up to 40 kilometers per hour with its 2,000 watt motor. "I'm really happy about my achievement but not very satisfied with it yet," he says, adding that Cambodia's lack of modern technology and materials are a minor obstacle to efficient manufacturing.

The dream of building cars in Cambodia may not be far-fetched. Officials have announced plans for South Korean automaker Hyundai to open a plant in southwestern Cambodia, assembling some 3,000 vehicles per year.Cambodia did actually assemble cars in a factory during the 1960s, before the country was caught in the maelstrom of the Vietnam War. During the brief manufacturing run, the car known as the "Angkor" was made from imported parts and domestically-made tyres.

Despite the Cambodian love for cars, Roux and several other analysts say its doubtful proper domestic manufacturing will emerge here soon -- especially since neighbouring Thailand remains Asia's auto assembly giant. "It's not just about having four walls (for a factory). You need hundreds of companies supplying seats, steering wheels, hoods... This is not going to happen in Cambodia for a number of years," Roux says.

Until then, Nhean Phaloek says he will keep making cars at home. The Angkor 333-2010 is the third he has built, and his first to talk. When he slams the door a voice out of the dashboard moans: "Why do you close me too strongly?" "Dozens of local and foreign guests have come and seen my car," Nhean Phaloek says with a smile. "One British man told me that it is the Cambodian James Bond car."

DENSO to Establish Production Company in Cambodia

In January 2013, Denso, the Japanese auto parts manufacturer, reported: “As part of its efforts to enhance the production and supply framework in the ASEAN region, Denso will establish a company in Cambodia. The new company, DENSO Cambodia Co., Ltd., which is scheduled to open in July 2013, will produce sensor components for ignition magnetos. The new company plans to gradually produce other products for the region. [Source: Denso, January 23, 2013]

"To support the increasing production of motorcycles and automobiles in the ASEAN region, we've decided to establish a production company in Cambodia. This will enhance our production needs for customers in the regions," said Sojiro Tsuchiya, DENSO Corporation's Executive Vice President responsible for the Asia and Oceania region.

"DENSO remains committed to expanding its production and supply framework in line with market trends in various regions of the world, as well as to offer products that meet the expectations of customers and automobile users. DENSO is also committed to create jobs and facilitate economic development in respective regions through its operations," said Sojiro.

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electric, electronics and information and safety. Its customers include all the world's major carmakers. Worldwide, the company has more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan) and employs over 120,000 people. Consolidated global sales for the fiscal year ending March 31, 2012, totaled US$38.4 billion.

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourism of Cambodia, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated May 2014

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