A US$37.9 million base plate factory will launch in June in the northwestern province of Banteay Meanchey, Japanese electronics manufacturer SC WADO Component Co said yesterday in a statement.
The entry of SC WADO, a subsidiary of Nidec Electronics, was another step in Cambodia’s march away from garment exports, which have been the country’s primary ware to overseas markets.
The company will start on an initial investment of about $12.6 million, and is expected to employ 350 Cambodian workers during its first year of operations, according to the company statement.
By 2014, the manufacturer could have 5,000 workers making base plates, a component of computer hard disc drives.
Last year, Japanese ball bearings maker Minebea became one of first international companies to try Cambodian hands at higher-level production.
The company invested $60 million in its plant in the Phnom Penh Special Economic Zone and is said to be looking for 3,000 local workers this year.
Ford and Hyundai assemble vehicles in the Kingdom.
“Cambodia can enjoy large-scale employment and diversify and increase its exports. Nidec can enjoy reasonable labour costs,” chief executive and economist at the Business Research Institute of Cambodia Hiroshi Suzuki said yesterday.
“It’s very good news for the Cambodian economy. This kind of parts manufacturing is the best investment for Cambodia.”
Concerns over Cambodia’s ability to produce higher-skilled labour, however, has overshadowed some of the cheer surrounding the recent increase in parts manufacturing.
In a report in April, the Asian Development Bank pointed to skill shortage as a primary barrier in the country’s drive toward diversified exports.
Chan Sophal, president of the Cambodian Economic Association, pointed yesterday to some of the problems in securing skilled labour for the price manufacturers expect to pay in Cambodia.
“Our human resources are not attractive compared to Vietnam and Thailand. We lack skilled workers,” he said. “If factories want to employ university graduates, they should give them a better salary because they won’t work for low wages.”
To contact the reporter on this story: May Kunmakara at email@example.com