Last month the Asian Development Bank (ADB) maintained its economic growth forecast for Cambodia. According to the ADB, Cambodian Gross Domestic Product (GDP) is expected to rise 7.2% in 2013 and up to 7.5% in 2014. The special trade preference scheme in conjunction with the European Union importing products from Cambodia duty-free and quota-free, can partly explain this positive outlook. Although the Garment industry accounted for nearly 90% of Cambodian exports in 2011, it is no longer the only industry to support Cambodian exports.
“In all of the Special Economic Zones we have visited these last three months, roads were still under construction as well as the infrastructures to accommodate factories to come” specifies Olivier Duguet, Chief Executive Officer of The Blue Circle. The Cambodian Investment Board has granted a number of industrial zones around the country the status of “Special Economic Zone”, designed to attract investments by offering low taxation and import/export duty exemption. Besides traditional shoe and textile factories, electronics and automotive parts manufacturers are now coming to Cambodia. “In Phnom Penh Special Economic Zone, Japanese investors are the leading foreign presence ahead of Taiwanese and Malays” notes Jeff Peron, Chief Development Officer for The Blue Circle.
Even if a number of industrial zones across the country are reporting nearly full occupancy levels of their Phase I expansion plans, “only a third of the announced factories are actually built!” continues Jeff Peron. Attracted by low labor prices (minimum wage is 80 USD per month in the shoe and garment sector), foreign companies are now struggling to hire enough workers to fill the factories they are building. “Requirements for 2,000 to 3,000 workers to hire for 2014 are common” mentioned one industrial zone manager, who is now advising factory owners to build dormitories beside their production units.
“All the industrial investments we are seeing happen right now bodes well for the economic growth and energy needs of Cambodia in the years to come” highlights Olivier Duguet. Given the lack of internal power generation in Cambodia (the country was importing 43% of its power needs in 2012), renewable energy sources will have a major role to play in providing local, clean, and sustainable energy in the future.
The Blue Circle is a Renewable Independent Power Producer in the Greater Mekong region. The Blue Circle is developing and investing in wind, solar, small hydro and biomass projects in Thailand, Vietnam, Cambodia and Laos and is headquartered in Singapore.
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