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).

Biweekly News Collection No.22

No.22 (Dec 11, 2020)

Market Industry Trends

CBC mobile app launched to promote credit management. Credit Bureau (Cambodia) Co Ltd (CBC) has recently launched its “CBC Mobile” application to promote credit transparency, financial health, financial literacy, and responsible credit management in Cambodia. The CBC is an independent provider of financial information, analytical solution, and credit reporting services to Cambodia’s financial institutions and consumers. Once registered with the application, it allows users with a loan history to track their credit score, access their credit reports, and receive real-time credit monitoring alerts, said the CBC. The application will enable users to monitor their credit health and provide financial institutions with a credit scoring system that will promote transparency between both parties. (Phnom Penh Post)              

Online customs drive to accelerate trade by road. The online ASEAN Customs Transit System (ACTS) was launched recently to accelerate trade in goods by road within Southeast Asia. The system has now been formally launched in Cambodia, Laos, Malaysia, Singapore, Thailand, and Vietnam. It will be available to other member states soon. Being developed with the support of the European Union, ACTS is simplifying the movement of goods across the region, making it more efficient and cost-effective. The system enables transporters to make a single customs transit declaration that covers the transport of goods across multiple countries, without the need to make repeated customs declarations or change vehicles at each border. Special arrangements allow reliable traders to load their goods at their premises in the country of departure, and to deliver the goods to their premises at other places. Faster customs clearance at borders helps accelerate transit and reduce the time and expenses needed for carrying out regional trade in goods. This system will be an excellent tool in enhancing trade and unified the market within ASEAN. (Khmer Times)

Three solar stations set to generate power earlier next year. Three solar stations will start generating power and link to the grid earlier next year, as currently, the projects are 90% complete. The three solar construction projects consist of a 20-megawatt solar plant invested by Green Sustainable Ventures Co., Ltd. located in Bavet city, Svay Rieng province; a 30-megawatt solar plant in Banteay Meanchey province’s Serey Sophorn district, invested by Ray Power Supply Co., Ltd.; and 60-megawatt solar plant in Battambang province’s Thmar Kol district, owned by Risen Energy Co., Ltd. Currently, Cambodia has renewable energy sources generated from solar stations including a 10-megawatt solar farm in Bavet, Svay Rieng province, 80-megawatt solar station in Kampong Speu province, 60-megawatt solar park in Kampong Chhnang province, 5-megawatt solar in Bavet, and 30-megawatt solar station in Pursat province. (Khmer Times)

Market Deals

WorldBridge’s SME cluster project breaks ground. WorldBridge Industrial Development’s i4.0 SME Cluster project has officially broken ground in Takhmau city, Kandal province. The total investment worth between $28 to $30miliion (exclude the price of land) and construction is expected to complete by end of 2021. This project is seen as an innovative and strategic solution for small and medium enterprises (SMEs) and industrial development in Cambodia. It aims to promote and booth the competitive ability of SMEs in terms of production, business, and services. The zone will provide a complete and flexible production line including a service center, training facility, food court, medical center, conference hall, and office space, as well as other utility supplies for factories. Besides, the cluster will also include logistics, supporting services (accounting, human resources, information technology, etc.), and a services center that will provide domestic transport, import-export clearance, on-site customs, cold storage packaging, and value-added services. SME Cluster project will be a place to support SMEs in terms of having sufficient market access, capital, and training in various skills, logistics and transportation, and energy efficiency, as well as helping those players to form complete value chains. (Khmer Times)

Peer to Peer Singapore lender launches services in Kingdom. Rai Capital, a newly established peer to peer (P2P) lending marketplace based in Singapore, has officially launched in Cambodia. It is a joint venture with Goldbell Financial Services, one of Singapore’s leading non-bank business finance providers. Recognizing the lack of financial inclusion in the lending market and the scarcity of financiers for micro, small and medium enterprises (MSMEs), Rai Capital is setting out to facilitate access to credit and reduce the financing gap by introducing a crowd-lending platform for MSMEs in Cambodia. According to The United Nations, Economic and Social Commission for Asia and the Pacific, MSMEs account for 99% of the total businesses in Cambodia, with most businesses being micro-enterprises with fewer than 10 employees. As a pioneering P2P lending marketplace platform, Rai Capital can get on board suitable investors around the region such as accredited or corporate investors and financial institutions outside Cambodia. This platform is accessible via mobile application. Currently, the firm is looking out for potential partners and is discussing with local payment providers in Cambodia. (Khmer Times)

Yet another commercial bank get principle approval for Cambodian setup. A Malaysian investment company, G Capital Bhd, has announced that it has received licensing in principle from the National Bank of Cambodia to establish a full-fledged commercial bank under the name “Oriental Bank Plc”. According to a news reported by The Edge Markets, the group has agreed with Public Bank Bhd’s Indo-China operations regional head Datuk Phan Ying Tong and Cambodian firm E S Packaging Co Ltd to jointly undertake the venture. The driving motivation for the establishment of the bank is the financial health of Cambodia which has shown steady growth and its banking sector has emerged as one of the most robust industries set on making healthy profits, according to the group. (Khmer Times)


ADB approves $70 million loan to strengthen agricultural value chain and food safety in Cambodia. The Asian Development Bank (ADB) has approved a $70 million loan to improve the capacity of agribusinesses in six provinces across Cambodia to process key agricultural products such as cassava, cashews, mangoes, vegetables, and poultry. Under the agricultural value chain competitiveness and safety enhancement project, it aims to benefit about 230 agricultural cooperatives and 50 agribusinesses in the provinces of Kampong Cham, Kampong Thom, Oddar Meanchey, Preah Vihear, Siem Reap, and Tboung Khmum. Processed agro-based goods now account for just 4% of GDP, due to the lack of diversification and value-added products. According to ADB, the project will facilitate access to credit, reinforce finance schemes including credit lines and credit guarantees for agribusiness. This project will also support initiatives to strengthen food safety and quality across the value chains for cassava, cashews, mangoes, vegetables, and native chickens. It will help agricultural cooperatives adopt good agricultural practices and upgrade food-safety testing laboratories to gain international accreditation. (Khmer Times)

CDC okays five projects worth $121M. The Council for the Development of Cambodia (CDC) had recently issued final registration certificates to five investment projects worth more than $121 million and expect to generate 1,334 jobs. The CDC issued final registration certificates for Inter-Mattrid Beverage (Cambodia) Co Ltd’s $78 million (brewery plant), Ruizexing Chemical Technology Co Ltd’s $20.1 million (agricultural pesticide plant), Sing Fu Sun (Cambodia) Plastic Co Ltd’s $11.7 million (PET perform factory), Blissfull Capital Co Ltd’s $9.5 million (commercial center along National Road 2), and Chunteng Industrial (Cambodia) Co Ltd’s $2.6 million (pet-friendly upholstery-fabric factory). The upsurge of inflow investment shows that investors are positive about the future economic recovery of Cambodia despite the damages caused by Covid-19. (Khmer Times)

Russia FTA feasibility study on the cards. Cambodia and Russia are planning a joint feasibility study on a potential free trade agreement (FTA) aiming to reinforce trade and investment ties between the two countries. This mechanism will facilitate the cooperation of the two nations in investment, culture, education, etc. Cambodia had expressed its intention in conducting a feasibility study on a bilateral FTA with Russia as soon as possible. Notably, bilateral trade between the two countries was to the tune of $45.15 million in the first 10 months of the year, representing an increase of 4.5% year-on-year, based on figures from the Ministry of Commerce. (Khmer Times)