Japanese conglomerate Hitachi announced plans yesterday for the development of a new special economic zone south of Phnom Penh.
In a statement released yesterday, Hitachi, one of Japan’s largest infrastructure developers, said it is partnering with Japan’s Forval Corporation, the Japan Development Institute and Cambodian real estate developer Heng Development to assess the potential of a new economic zone in Kandal province.
“The four companies will conduct, by June 2015, a feasibility study on marketing, basic design, business plan and other aspects, and conduct a commercial viability assessment based on the results of the study,” the statement reads.
If the study gives the project the green light, construction on the economic zone will begin in July and will take a year to complete according the company’s announcement.
Providing tax and administration incentives to its occupants, the new industrial zone would initially be built over 1 million square metres with the potential to triple in size in the future.
“The site is near national roads and beltways, and offers good access to Bangkok and Ho Chi Minh City. Hitachi expects the tenants of the industrial park to be companies from various Asian countries, as well as Japanese companies,” the statement goes on to say.
Seang Chanheng, general director of Heng Development, the project’s Cambodian partner, told the Post yesterday that negotiations have been in plan with Hitachi for about two years.
Although hopeful that the project would come to fruition, Chanheng cautioned that a thorough assessment was required before a decision to proceed could be made.
“Hitachi is one of the biggest companies in the world and it has many investment partners, and we do want Japanese companies [in Cambodia], because Japanese companies that come and set up shop, making products for the local and markets abroad, they always produce goods of good quality,” she said.
Chanheng said a capital investment figure for the zone would not be confirmed until the completion of the feasibility study.
If it goes ahead, Hitachi’s industrial park will join a growing list of special economic zones in Cambodia, most of which are located along the country’s borders. According to the Ministry of Commerce, 33 SEZ’s have been approved and 11 are currently in operation.
Hiroshi Suzuki, chief economist at Business Research Institute for Cambodia, said that Japanese investment in SEZ’s throughout the region had already proven successful.
“I believe that this type of investment could have a good success based on the experiences in neighbouring countries such as Thailand and Vietnam,” he said referring to the Hitachi proposal.