France said it plans to boost its exports to Cambodia as French foreign direct investment in the country – worth $3.18 million in 2012 – continues to rise, officials said on Wednesday.
“France, which seeks to rebalance its foreign trade by 2015 [excluding energy] wants to develop its exports to Asia, particularly Cambodia,” Nicolas Baudouin, first secretary at the French embassy in Phnom Penh, told the Post on Wednesday.
Among this year’s investments, concessions and construction company group Vinci, the largest building firm in the world by revenue, plans to invest $92 million in the Kingdom through its subsidiary Cambodia Airports.
Trade between France and Cambodia was limited last year, worth only 266.8 million euros ($349.16 million), though it had increased from 202.6 million euros in 2011, according to a report from the French embassy.
However, Cambodia’s exports to France accounted for the lion’s share, at 204.8 million euros. Eighty-one per cent of the products France imported from the Kingdom were clothes and shoes. Their value increased by 35 per cent compared with 2011, to 166.4 million euros last year.
“The establishment of numerous European purchase offices in Cambodia [like Decathlon, a manufacturer of sports equipment] contributes to the increasing sales of local garments overseas,” the report said. Cambodia also enjoys tariff exemptions under the EU’s Anything But Arms initiative, which seeks to promote EU trade with lesser-developed countries.
According to the Ministry of Agriculture, France was also Europe’s biggest importer of Cambodian rice last year, as big traders such as Golden Rice, Anduriz and Marbour shipped a total of 47,000 tonnes.
Meanwhile, French exports to Cambodia were worth only 62 million euros, of which 23.9 million euros were pharmaceutical products.
“Cambodia’s pharmaceuticals market was calculated to be worth $170 million in 2012,” said a report on pharmaceuticals and healthcare from Business Monitor International published last month.
“France is, unsurprisingly, the leading import source, followed by India, South Korea, Thailand and China.”
While French direct investment is still limited, some big French companies have signed contracts in recent years, the Embassy report said.
Data from the Council of the Development of Cambodia show French direct investment valued ay $302 million between 1994 and 2012. According to the Bank of France, the country invested 140 million euros ($184 million) in 2011.
French companies mostly invested in construction (83 million euros), real estate (18 million euros) and petroleum processing (8 million euros) in 2011, the report said.
Baudouin told the Post that Vinci plans to invest $92 million this year to increase the capacity of the airports in Siem Reap and Phnom Penh.
“[We] plan to invest close to $400 million over the next eight years. The investments are dedicated to the extensions and upgrading of the international airports in Phnom Penh, Siem Reap and Sihanoukville,” said Norinda Khek, communications and marketing director of the Phnom Penh International Airport. Since the start of its concession, adding that the company has already invested over $230 million.
Another contract worth $25 million was signed this year by Citélum, a branch of the water utility company Veolia, to restructure Phnom Penh’s urban lighting, the embassy wrote.
The French Development Agency agreed last month to grant Cambodia a total of $47.7 million, $8.7 million of which is in the form of loans.