Biweekly News Collection No.25

No.25 (Jan 22, 2020)

Market Industry Trends

SECC PREPARED TO LIST SHARES OF HOLDING FIRMS. The Securities and Exchange Commission of Cambodia (SECC) is drafting a prakas on public offerings of equity securities for holding companies to allow them to issue shares on the Cambodia Securities Exchange (CSX). The discussion about the inputs of the draft prakas is still ongoing between all relevant stakeholders before submitted for approval. This new prakas will enable holding companies, company that holds shares of other companies without participating directly in the business activities of the company they are holding, to raise funds by listing their entities in Cambodia. Currently, there are 13 listed firms in the Kingdom – seven with stock listings and six with corporate bond listings. According to CSX data, they had raised a combined $253 million as of September 2020. (Phnom Penh Post)

PPSEZ EXPORTS TO US, EU, AND ASEAN UP SUBSTANTIALLY IN 2020. Exports from the Phnom Penh Special Economic Zone (PPSEZ) made under the ASEAN-EU FTA (free trade agreement) and the United States’ GSP/MFN scheme (Generalized System of Preferences/Most-Favored Nation) was valued at around $507 million in 2020. This marked an increase of 76% over 2019 results, according to a report from the Ministry of Commerce’s General Directorate of Trade Support Services. These exports were primarily in garments, textiles, shoes, and travel goods with the primary destinations being the US, United Kingdom, EU, China, South Korea, and Japan. The data also showed the value of exported goods: garment ($20.34 million), travel goods ($4.637 million), shoes ($826,504), and other goods ($481.68 million). (Khmer Times)

NGO PARTNER PROMOTES BEST PRACTICES FOR RUBBER FARMS. The General Directorate of Rubber under the Ministry of Agriculture, Forestry and Fisheries and Worldwide Fund for Nature-Cambodia (WWF-Cambodia) have announced their cooperation to build a multilateral partnership for transparent and sustainable natural rubber supply chains in Cambodia. The memorandum of understanding (MOU) aims to establish a framework that provides information on sustainable rubber production and opportunities for capacity building in sustainable practices. Building capacity and providing technical skills to small plantation owners and the officials in the sector, combined with active participation from all key stakeholders, will contribute to the sustainable development of Cambodia’s rubber industry. Cambodia’s rubber plantations span 401,914ha with the industrial production of 240,811ha and family farms of 161,103ha. (Phnom Penh Post)

SINGLE PORTAL TALLIES 7,293 ENTRIES. The number of companies initiating the registration process on the government’s newly launched e-Business Registration Platform has increased to 7,293 after seven months of the system launched. Six ministries and state-run institutions comprise of Ministries of Interior, Ministry of Economy and Finance, Ministry of Commerce, Ministry of Labor and Vocational Training, General Department of Taxation, and the Council for Development of Cambodia have been integrated into a business registration system on the platform which is also known as the Single Portal. The single portal has been applauded for its efficiency in facilitating the registration process for the private sector. The previous company registration process will take months to complete as the information needs to be assessed by multiple ministries. The new single portal business registration would take a maximum of 8 days only since all data inputted into the platform will be stored and distributed by the system automatically. (Phnom Penh Post)


GOVERNMENT ANNOUNCES POLICY SUPPORT FOR CASSAVA INDUSTRY. Cambodia has officially launched a “National Cassava Policy” (NCP) to boost domestic production, processing, and commercialization for export to international markets. The NCP is a joint effort by the Ministry of Commerce, Ministry of Agriculture, Forestry and Fisheries, and the UN Development Program (UNDP). Cassava is one of the primary agro-industrial crops with an investment of about $300 million annually and a major export product that contributes 3% to 4% of gross domestic product (GDP). This policy aims to position Cambodia to be a home of cassava processing industries and a reliable supplier of cassava-based products for global markets. The policy defines three main objectives: commercialize cassava production; support active processors and attract investment to produce value-added cassava-based products; enhance trade competitiveness and trade facilitation as well as trade-related costs. (Phnom Penh Post)

KINGDOM’S BICYCLE EXPORTS TOP $500M. Cambodia exported bicycles worth approximately $527 million to international markets last year, up 27% from 2019. Target markets for bicycle exports include the US, Germany, Sweden, Belgium, Canada, UK, Denmark, Australia, Austria, Netherland, Czech Republic, Italy, Columbia, Korea, and Spain. According to the data from the Ministry of Commerce, Cambodia ranks number 1 in the ASEAN community and number 5 globally for bicycle exports. Recently, there is a high demand for bicycles in many parts of the world since people are reluctant to use public transportation. According to, a website specializing in the EU’s bicycle industry, Cambodia has been the leading supplier of bicycles to the EU since 2017, overtaking Taiwan who had held the top position for more than two decades prior. (Phnom Penh Post)

NBC ANNUAL REPORT DETAILS NATION’S 2020 FINANCIAL PICTURE. Cambodia’s international gold and dollar reserves have reached $21.3 billion, sufficient to guarantee the next 10 months of goods and services imports. The NBC stated the level of international reserves on hand enable Cambodia to manage its exchange rate, stabilize the financial sector, increase national properties and build trust among the public. The report noted that the banking sector’s 2020 total loan portfolio was $30.2 billion, an increase of 15.3% from 2019. The loan category breakdown by sector was led by retail at 15.5%, personal mortgages at 12.8%, wholesale at 9.7%, personal loans at 9.8%, construction at 9.2%, real estate at 8.4%, agriculture at 7.7% with others amounted to 26.9%. Bank deposits were $30 billion, a rise of 15.5% over 2019 figures. Total loan restructuring in the banking sector for 2020 was $3.017 billion. NBC also reported total loans by microfinance institutions (MFIs) in 2020 as $6.8 billion, a surge of 12.5% compared to 2019. Deposits at microfinance deposit-taking institutions (MDI) were $3.7 billion and loan restructuring by MFIs amounted to $1.139 billion. (Khmer Times)

Biweekly News Collection No.24

No.24 (Jan 11, 2020)

Market Industry Trends

Joint $500,000 fund to fuel SME incubation. The UN Development Program (UNDP) in Cambodia announced a new joint $500,000 investment in grants and e-commerce training for 125 small and medium-sized enterprises (SMEs). The funds are backed by UNDP Cambodia, the Ministry of Commerce, and the World Trade Organization (WTO) Enhanced Integrated Framework (EIF). The investment will fuel an innovative six-month incubation and training initiative and small-grants program to help SMEs move online, sell online, and, for some, sell to overseas customers through a new online marketplace [B2B2C] being developed by the ministry. The quota is reserved for businesses owned by women and businesses based outside of Phnom Penh. (Phnom Penh Post)

221 new factories opened, 100 shut in 2020. New factories totaling 221 were opened and 100 were closed in 2020 according to the Ministry of Industry, Science, Technology, and Innovation. The newly established factories represent a diversity of products ranging from garments to high-technology-equipped factories manufacturing solar panels and electronic components. The closure factories were mainly garment manufacturers and sub-contractors supplying semi-finished products who faced production disruption due to Covid-19 issues. According to the latest data from the General Department of Customs and Excise, exports in clothes, footwear, and travel goods declined by 9% for the first 10 months of 2020. (Khmer Times)


New framework for government securities. A law on government securities that aims to provide a framework for their issuance, trading, and management with transparency, accountability, effectiveness as well as the sustainability of public debt management has been officially ratified for implementation. It will help to strengthen the management of cash demands in response to financial needs for socio-economic development and financial markets in Cambodia as well as support other priority development projects in the country. Under this regulation, the minister can refund, buyback, and settle all government securities that have reached their maturity date or before then. All operations related to the issuing and management of government securities must be determined by a directive (prakas) from the government. The government securities can be issued as local or foreign currency here or abroad. It added the government will take full responsibility for the issuing of government securities. The total amount of money issued must be determined by the annual [public] financial management law (annual budget law). For additional issuance of government securities, the prime minister can send the request with the purpose of the transaction to the National Assembly for approval. The government securities can be issued as a printed certificate or in electronic form. Participants in the primary market can be banking and finance institutions granted a license from the National Bank of Cambodia, or securities firms granted one by the Securities and Exchange Commission of Cambodia or other institutions stated under the ministerial directive. Government bonds will be sold publicly on the primary market based on bidding price or other methods stated in the minister’s directive or prakas. (Khmer Times)

Cambodia-Malaysia double tax agreement now in effect. The double tax avoidance agreement (DTA) between Cambodia and Malaysia has come into effect with an optimistic view that bilateral investment between the two countries will increase. The agreement was made to prevent investors on both sides from paying income taxes on the same source of income and obliging them to pay where the profit was made. DTA would further reduce the tax burden on consumers and suppliers between the two countries. This mechanism will also increase the volume of bilateral trade and the inflow of foreign investment into Cambodia.  According to the Council for the Development of Cambodia (CDC), Malaysia was the fifth-largest foreign investor in Cambodia in 2014 and 2018, bringing in $481 million. Cambodia exports to Malaysia are mostly agricultural products, while imports from Malaysia include electronic equipment and food products. (Phnom Penh Post)


Ministry shares 2020 agri-export numbers. According to data from the Minister of Agriculture, Forestry and Fisheries, Cambodia exported $4.037 billion in agricultural products in 2020. The export commodities included milled rice, rice paddy production, cassava, cashew nuts, mango, rubber, banana, Pailin longan, pepper, birds’ nests, fisheries products, animal products, forestry products, and other goods. The agriculture export figures consisted of $61.30 million from animal products such as cattle, pork, and poultry as well as chicken and duck eggs and other animals. The fishery products including river and marine fish as well as aquaculture were recorded at $8.33 million. Exports of forestry products (processed timber), birds’ nests, leather products, and living monkeys, amounted to $44.08 million in value for the year. The nation’s export of subsidiary crops was valued at $2.17 billion while the total export of rubbers for the year was $482.76 million. Moreover, milled rice and rice paddy export were worth $538.8 million and $723.48 million respectively in 2020. (Khmer Times)

Cambodia, Thailand bilateral trade valued at $6.6 Billion in the first 11 months. Bilateral trade between Cambodia and Thailand was valued at $6.6 billion in the first 11 months of 2020, sliding down 22% compared to the same period last year. Figures from Thailand’s Ministry of Commerce showed that from January to November this year, Cambodia exported $1,071 million worth of products to Thailand, a year-on-year decrease of 51%. Meanwhile, Cambodia imported $5,580 million worth of products from Thailand, inching down 12% compared to that last year. In 2019, the two-way trade between the two countries worth $9.2 billion.  (Khmer Times)

NBC projects a growth rate of four percent for 2021. The National Bank of Cambodia (NBC) has forecasted that the Kingdom’s estimated economic growth will be 4% in 2021, according to its Macroeconomic and Banking Sector Update 2020 report. The updates on the state of the nation’s economy, taking into account the devastation of the pandemic, had predicted an overall contraction of Cambodia’s economy of 1.9% in 2020. The latest NBC forecast is in line with international financial institutions’ predictions for Cambodia’s economic growth in 2021. Those figures range from 4% to 6.8%. The prediction depends on the strengthening of domestic economic activities and the speed in the recovery of economic partners who will support and mitigate the impact on Cambodia’s economy from the slowdown of export figures. According to the central bank, agriculture will be the sector with the highest potential to offset unemployment and support the livelihoods of the poor. It also identified that speeding up economic diversification and its implementation throughout the industrial sector would help the country’s economy recover faster from the current crisis. (Khmer Times).

Biweekly News Collection No.23

No.23 (Dec 25, 2020)

Market Industry Trends

TOP SIX AGRO-INDUSTRIAL CROPS NET KINGDOM $2.3B IN 2020. Cambodia exported 8.55 million tons of its six most profitable agro-industrial crops, through formal and informal channels, worth more than $2.32 billion this year. The six types of crops are cassava, cashew nuts, mangoes, yellow bananas, peppercorn, and Pailin longan. During the period, Cambodia exported 7,075,494 tons of cassava products (worth $1,026,232,000), 218,884.29 tons of cashew nuts ($288,111,700), 945,274.44 tons of fresh mangoes ($473,207,700) and 313,410.94 tons of fresh yellow bananas ($451,125,700). The Kingdom also shipped out 174.52 tons of Pailin longan (worth $57,763,100) and 5,005.65 tons of peppercorn ($25,490,200). The agriculture sector is a significant engine of economic growth which could enjoy a surge in export figures despite the downturn in the industry and services sectors. According to the Ministry of Economy and Finance, Cambodia exported $14.1 billion worth of goods in the first nine months of this year, up 20.07% from the same period last year. (Phnom Penh Post)

ESTABLISHMENT OF CAMBODIA CHAMBER OF AGRO-INDUSTRY. The Ministry of Agriculture, Forestry and Fisheries has summoned an urgent discussion about a draft law on the Cambodia Chamber of Agro-Industry (CCAI). The discussion aimed to collect inputs to substantiate the draft law to make it complete, effective, and acceptable for all concerned players, especially serving the interests of companies, associations, enterprises, federal unions, agricultural communities, and beyond. The draft law will be a key measure to resolve emerging issues timely and efficiently following the government’s vision for comprehensive reform to boost economic growth. The members of the chamber will play a vital role to transform the crisis into opportunities for agricultural production chain and business development. (Khmer Times)

RUBBER EXPORTS INCREASE IN 2020. Cambodia’s rubber exports are expected to reach 340,000 tons by end of this year. The export figure was reported at around 280,000 tons in 2019. It is projected that the growth rate of rubber export will continue to increase until 2024. Currently, there are more than 410,000 hectares of rubber trees nationwide that are ready for cultivation and approximately 290,000 hectares of rubber trees are capable of being tapped for latex. The price of rubber is also promising up to $1,700 per ton. Cambodia sent around 60% of its rubber production to Vietnam, with most of that remaining exported to China, Malaysia, Singapore, and Europe. (Khmer Times)

BANK GETS LOAN FOR SMEs, BUSINESSWOMAN. Sathapana Bank Plc received a $50 million loan from Proparco, a subsidiary of Agence Francaise de Developpement (AFD) to increase lending by the bank to small and medium-sized enterprises (SMEs) and women entrepreneurs in Cambodia. The loan will be divided equally into two groups: $25 million for supporting the development of the bank’s overall lending activities with SMEs and the remaining $25 million for supporting woman entrepreneurship. It is estimated that approximately 3,600 SMEs will benefit from this loan program, particularly businesses in the retail, services, and agriculture sectors. This credit line will help businesses to sustain themselves and seek new investment opportunities. (Phnom Penh Post)


WORLD BANK: CAMBODIA’S ECONOMIC GROWTH PROJECTED TO GROW BY FOUR PERCENT NEXT YEAR. Cambodia’s economy in 2020 is projected to register a negative growth of 2% but is expected to bounce back and grow by 4% in 2021, according to Restrained Recovery, the World Bank’s latest economic update for Cambodia. Although total manufacturing exports have been hit by the pandemic and the partial suspension of preferential access to the EU market under the “Everything-But-Arms” initiative, the export of bicycles, electrical parts, vehicle parts, and other accessories are rising. Moreover, there is also a surge in the export of rice and other agricultural commodities. Foreign direct investment inflows to non-garment industries and agriculture projects have also been increasing as a result of the recent bilateral and regional free trade agreement. (Khmer Times)

U.S. TO PROVIDE ADDITIONAL $66.2 MILLION TO AID CAMBODIA’S DEVELOPMENT. The Royal Government of Cambodia and the Government of the United States of America have officially inked the exchange of notes reflecting the addition of $66.2 million to the development project agreement grants for Cambodia. The additional funding will support Public Health and Education ($43.3 million), Agriculture and Environment ($22.9 million), according to the Council for Development of Cambodia (CDC)’s press release. From 1992 to 2019, the U.S. Government provided approximately $1.5 billion in assistance, equivalent to 6.1% of total Official Development Assistance (ODA) disbursement by all development partners to Cambodia, focusing on priority sectors such as health, education, environment, agriculture, governance, democratic development, and de-mining. (Khmer Times)

FRANCE PROVIDE OVER $91 MILLION TO DEVELOPMENT OF AGRICULTURE AND COMBAT CLIMATE CHANGE IN CAMBODIA. The Government of France through the French Development Agency (AFD) is committing 75 million euros (more than US$91 million) for the agricultural development and the fight against climate change in Cambodia. Two financing agreements were signed to support sustainable agricultural and rural development as well as climate-resilient development in Cambodia. The Rural Infrastructure Development for Cambodia (RID4CAM) project will improve access to basic services for rural people and contribute to opening up the most remote areas. The Agriculture Value Chain Competitiveness and Safety Enhancement (ACSEP) project will promote agricultural diversification by supporting five potential sectors (cashew nuts, mangoes, sweet potatoes, poultry, and crops). These projects will be carried out with the German Development Bank – KfW and the Asian Development Bank (ADB).