More Japanese firms eye investments in Cambodia

PHNOM PENH (Kyodo) -- More Japanese firms are looking to Cambodia this year either to invest or to learn about the investment environment in the country, participants in an economic forum were told Friday.

Sok Chenda, secretary general of the Council for the Development of Cambodia, told the forum in Phnom Penh for Japanese investors that the government is improving as quickly as possible the investment environment, human resources and infrastructure.

More than 65 Japanese representing various institutions and companies attended the meeting.

Yoshihisa Kainuma, president of Minebea Co., said some challenges remain in Cambodia such as incomplete infrastructure and the high cost of electricity, but his company decided to invest there because of low labor costs, strong support from the government and a location close to Thailand where his company had already invested.

Statistics provided by the council showed that in the first 10 months this year, 16 Japanese companies invested $67.6 million in Cambodia, up sharply from only six companies that invested $35.3 million in all of last year.

In addition, nine more Japanese companies have applied in the first 10 months this year to make investments worth another $53 million, the statistics showed.

The investments cover a variety of industrial sectors, including shoemaking, garments, motorcycles and packaging, as well as beach and island development.

Japanese investments in Cambodia since 1994 through October this year totaled $250.6 million.

Since 1994 through November, China has invested $8.8 billion, South Korea $4 billion and Malaysia $2.6 billion.

(Mainichi Japan) December 17, 2011

so guys why do you think Japanese investment in cambodia is so low compared to korea

Japanese are very conservative when it comes to making investment oversea, they are looking to invest in country with a general favorable legal environment, stable taxation policies and adequate infrastructures, cheap labour is not their priority set of criteria, right now their local companies are showing confidence and making a lot of investments in Malaysia, Thailand, Indonesia and there is a growing interested in Vietnam in the past couple of years.

Number of Japanese firms to surge this year
Thursday, 12 July 2012 Don Weinland

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If industry-watchers were roused last year by the influx of Japanese investment to Cambodia – including bellwether parts manufacturer Minebea – 2012 should not disappoint.

Up to 60 new Japanese companies are expected to apply for business licences this year after the number tripled to about 30 in 2011, according to the Japan International Cooperation Agency’s Cambodia office (JICA), which has played a major role in attracting the businesses.

Official figures were not available.

More important than the numbers is the industry transformation these companies have brought with them: higher value-added manufacturing, such as ball bearings and electrical wiring production. It’s a much welcomed move away from garment-making that experts said is set to continue.

“While Japanese foreign direct investment tends to be cautious in deciding to enter a new market like Cambodia, once the decision is taken to invest, it tends to grow quickly and sharply, and they are usually in for the long haul,” said Jayant Menon, lead economist at the Asian Development Bank’s Office of Regional Economic Integration.

But there’s more to wooing these companies than what the government has long touted as an advantageous investment climate and political stability.

Far from the Kingdom’s factory floors last year, JICA co-hosted seminars on Cambodia in Tokyo, Osaka and Nagoya, drawing more than 300 companies. JICA will put on two more seminars in Tokyo and Osaka at the end of this month.

Japan is also one of the most represented countries in Cambodia. At the Cambodia Investment Board, an investment-approving body, Japan is the only nation represented by a country desk, according to Hak Lyda, a program officer for private sector development at JICA.

The trend has been regional. In 2001, there was one Japanese company operating in Hanoi, said chief executive and economist at the Business Research Institute for Cambodia Hiroshi Suzuki.

Since then more than 400 companies across a spectrum of industries have set up in the Vietnamese city.

Korea, China, Thailand and the Philippines, among others, have seen similar investment patterns, he said. And as production costs rise throughout the region, Cambodia’s low wages will increasingly draw the attention of Japanese TV and automobile makers and other parts manufacturers.

After natural disasters at home and in Thailand in 2011, Japan is also trying to hedge its investments in the region.

Cambodian production is an alternative supply source to bigger investments in China and Thailand, ADB’s Menon said. “Cambodia offers a relatively inexpensive insurance policy in this regard.

“But it is insurance which remains valuable during normal times, with regular production, but becomes more valuable when unpredictable shocks disrupt production along a similar segment of the supply chain.”

While Hak Lyda was optimistic about the potential increase in Japanese investment, he said skill, electricity and infrastructure shortfalls – perennial sources of concern for manufacturers – must be addressed by the government.

“It depends on the government’s efforts and commitment toward being a manufacturer of high-end electronics. If they want, they can just continue to produce garments.

The question is: How far do they want to go with this?” he said.

http://www.phnompenhpost.com/index.php/2012071257368/Business/number-of-japanese-firms-to-surge-this-year.html

Motoya Okada (CEO of Aeon) Laying the corner stone for Aeon with Japanese investment of 200 Million Dollars on 100000 sq. meter area + 2000 jobs for local people.

In 1994 - 2009 period, ONLY 15 Japanese firms investing in Cambodia with the investment of 147 million Dollars - In 2010, there are 5 Japanese company investing 35 million Dollars in Cambodia and in 2011 there are 19 new Japanese project with the total investent of 66 million Dollars - the new 200 Million US Dollar investment by Aeon will give the real face lift for sure - after Minibae has invested on the factory to produce small motors.
http://www.manager.co.th/IndoChina/ViewNews.aspx?NewsID=9550000150864

http://pics.manager.co.th/Images/555000015990301.JPEG
Toyoko Inn Co Ltd investing on Toyoko Inn on Koh Pich, Phnom Penh with 305 rooms to be opened in November 2014

Yasaki Group going to invest on the new electronic part factory in Cambodia - after Minibea and Nidec have set up the new factories in Cambodia
http://www.manager.co.th/IndoChina/ViewNews.aspx?NewsID=9550000151766

besides construction, cars and aeon are there any other big japanese companies in cambodia

^^^
Electronic stuffs like Minibae which will serve as the basis for Electronic Giants like Matsushita or so ... even though they are not not so big and powerful as they used to be.

Yasaki Corp opening the first factory for producing the electric parts for automobile at Koh Kong Special Economic Zone (271 km from Phnom Penh) with a price tag of 24 million Dollars
http://www.manager.co.th/IndoChina/ViewNews.aspx?NewsID=9550000153105

Japanese firms seek business options in Cambodia
Last Updated on 17 January 2013 By May Kunmakara
Representatives of a dozen large Japanese companies arrived in Phnom Penh on Tuesday looking for business opportunities in the kingdom.

Hidetoshi Nishimura, executive director of the Economic Research Institute for ASEAN and East Asia, led the delegation, whose members represent firms in industries such as technology, jewellery manufacturing, infrastructure development and agriculture.

Speaking to reporters after a meeting between the delegation and Prime Minister Hun Sen on Tuesday at the Peace Palace, the premier’s personal adviser, Eang Sophalleth, said Nishimura had told Hun Sen the group was seeking potential opportunities.

Sophalleth added that Nishimura had said Cambodia’s political stability and security, and the government’s business-friendly policies, made the Kingdom an attract-ive place to do business.

Hun Sen pointed out that the country was ripe for investment in areas such as agriculture, tourism, mining, oil and gas, transportation and telecommunications.

In recent years, a number of Japanese companies have invested in Cambodia, mostly in manufacturing.

Last month, Tokyo-based auto supplier Yazaki invested $24 million in an electronic parts plant in the Koh Kong Special Economic Zone.

In September, AEON committed $200 million to build a four-storey shopping mall in Phnom Penh.

The delegation’s visit coincides with Japanese Prime Minister Shinzo Abe’s visit this week to three fellow ASEAN countries – Vietnam, Thailand and Indonesia – his first foreign trip of his second term as premier.

Peter Brimble, deputy country director of the Asian Development Bank, says the flow of Japanese investment is helping to diversify Cambodia’s exports, which now rely mostly on the agricultural and garment sectors.

“Last year, we saw a type of diversification happening: we saw Japanese investment coming in like crazy. They build one factory, they finish it, they get it up and running, then they start building the next one in the Phnom Penh special economic zone, in Koh Kong, or wherever.

“I think this will have a significant impact on exports and the economy in 2013.”

http://www.phnompenhpost.com/2013011760825/Business/japanese-firms-seek-business-options-in-cambodia.html

Denso to produce auto parts in Cambodia

http://www.yomiuri.co.jp/dy/business/T130124003574.htm

NAGOYA (Jiji Press)--Denso Corp. will establish an auto parts production unit in Cambodia as it moves to beef up its operations in Southeast Asia.

Denso is the first major auto parts maker in the Toyota Motor Corp. group to set up a foothold in Cambodia.

The new company, Denso Cambodia Co., will begin production of sensor components for motorcycle magnetos in July, and expand its production lineup later, Denso Corp. said Wednesday.

Initial investment will total 400,000 dollars. The Cambodian unit, to be set up in a special economic zone in Phnom Penh, will have about 100 employees as of 2014.

Denso is currently producing auto parts in Thailand and Indonesia to meet increasing demand for vehicles in Southeast Asia.
(Jan. 25, 2013)

Japan's businessmen visit Myanmar, Cambodia for investment opportunities

TOKYO, Feb. 4 (Xinhua) -- A delegation comprised of Japan's top business leaders, known as Keidanren, began a six-day trip to Myanmar and Cambodia Monday, seeking new business and investment opportunities there.

Hiromasa Yonekura, chairman of the Japan Business Federation, is leading the delegation and said he hopes that meetings with senior officials in the two countries will help Japanese companies get more opportunities in the nations.

Along with proposals for human resources development, the federation hopes the Myanmar government will sign an official investment accord so as to protect Japanese companies doing business in the country.

The Federation will also be looking to Myanmar to relax certain laws currently preventing Japanese companies from doing business there and has outlined plans to help develop the country's infrastructure.

The delegation is one of the largest ever comprising 140 people, including 20 senior members of the federation.

WOW! This is the first time in Cambodia's modern history, hosting 140 Japanese business delegates, including 20 senior members. This should be a proud moment for Cambodia and PM Hun Sen. This is a major turning point for Cambodia. Wherever Japanese businesses go, others will follow.

Good to hear that but most of the time after visited Cambodia they always invested in Vietnam.. don't know what's wrong????

Myanmar is a new opening country.. but Cambodia is an old one if compare to Myanmar so maybe they really want to invest in Myanmar
but just only show that they are still care to Cambodia.

But anyways just prey god, hopefully this time Japanese investor pity Cambodian peoples.

According to someone I know who previously spoke to the Japanese ambassador in Cambodia, he suggests the lack of infrastructures is the main obstacles Japanese investors stay away from this country.

^^ i can see, also phnom penh is far from sihanoukville compared to other cities int region, which is a disadvantage

But our labor cost is much cheaper in the region too.

^^ Yes, that's one of the advantage :) And less competitions

But our labor cost is much cheaper in the region too.

that makes myanmar even better the average income in cambodia is double of myanmar our workers are becoming more expensive

But our labor cost is much cheaper in the region too.

But most of them are unskill worker and I heard that their productivity is far less that other Asean countries. Possible they try to save money and eat less or very cheap food

But most of them are unskill worker and I heard that their productivity is far less that other Asean countries. Possible they try to save money and eat less or very cheap food

Recently, has some Japanese factories opened in Cambodia and its not garment
but machinery or car spare part as well but everything is fine our worker can
do it, I don't think our worker poor if they have a training before they get a job.^^

And they eat less and save moneys because of low pay.:ohno:
Most of them are farmer.. to me they are suppose to do farming and sale to the buyer in a reason able price
If we travel from P-penh >> Saigon than we see the different between these two countries (Vietnam always green look even dry season)

And if Vietnam not sale Vegetable to Cambodia for one month... maybe million Cambodian die.

Last Updated on 11 February 2013 By Hor Kimsay

A delegation led by the Japan Business Federation, the biggest economic association in that country, visited Cambodia last weekend to explore business opportunities in the Kingdom.

Masafumi Kuroki, Japan’s ambassador to Cambodia, said the delegation, the largest such group from Japan to visit the Kingdom, was solid evidence of increasing Japanese interest here.

“They are all decision-makers from various big companies in Japan,” Kuroki told the Post. “So it’s great that Cambodia can attract their attention.”

The 140 companies represented in the delegation included global businesses such as Toyota Motor Corporation, Panasonic Corporation, Sumitomo Chemical, Hitachi, energy giant JX Holdings, Tokyo-Mitsubishi UFJ bank, financial group Sumitomo Mitsui and All Nippon Airways.

“We would like to strengthen co-operation with Cambodia in the areas of infrastructure development as well as the improvement of the business environment,” Japan Business Federation chairman Yonekura Hiromasa said.

“By doing so, Japan will be growing together with Cambodia.”

During their two days in Cambodia, the delegates met Prime Minister Hun Sen, Commerce Minister Cham Prasidh, Japanese business leaders who are already investing in Cambodia and many other significant Cambodian government bodies.

Warmly welcoming the potential investors, Prasidh highlighted Cambodia’s comparative advantages, including political and macro-economic stability, a large, low-cost labour force and free access to major markets.

“Cambodia is one of the less developed countries in the world, which is a great advantage for export-based companies to come here and export their products to many destinations, duty- and quota-free,” he told delegates.

Yoshiko Yamanaka, project adviser for economic infrastructure development at the Japanese development agency JICA, told the Post Japanese investors were shifting their operations from traditional sites such as China to other Asian countries.

To attract more Japanese companies, it might be necessary for Cambodia to define its comparative advantages and use incentives such as policy tools to improve the investment climate, she said.
“In this regard, Japanese companies may decide to locate their operations in Cambodia.”

In Channy, president of Cambodia’s largest bank, ACLEDA, attended a lunch meeting with the business delegation.

Learning directly about investment advantages was an effective way for investors to observe the reality of Cambodia’s business potential, Channy said.

“We’ve already shown a success story to many companies who decided to grow here. I hope they [the business delegation] will learn from that and follow the early comers.”

http://www.phnompenhpost.com/2013021161282/Business/japanese-interest-growing.html

^^ All Nippon Airways :eek:, about time ;)

JAL too should come. Can't wait.

^^ All Nippon Airways :eek:, about time ;)

^^
I think All Nippon Airways (ANA) will be here only to provide logistic supports for the Japanese business giants. ANA operates air cargo services worldwide. They follow where most Japanese business giants go. Therefore, air cargo services will come first before passenger services. Of course, this is merely just a speculation on my part. They may offer both passenger and air cargo services at the same time.

Japanese Investor going to make heavy investment in Cambodia, Vietnam, Laos and Myanmar as their total economic size is just about 220 Billion Dollars - about 60% of Thai GDP to compete against Chinese investors - already grow by 38% in vietnam
http://www.thairath.co.th/content/eco/333976

This is indeed a good news for the whole region. Cambodia stands to gain tremendously from the Japanese investors.