Maersk (Cambodia) Ltd country manager Ben Wilson poses in Phnom Penh yesterday. Photograph: Meng Kimlong/Phnom Penh Post
The Cambodia representative for the world’s largest shipping company said exports from Cambodia to Europe grew by more than 60 per cent during 2011, but have since weakened.
“Rice exports grew a lot during 2011 and a lot of it went to Poland and France,” said Ben Wilson of Maersk (Cambodia) Ltd, which carries more cargo out of Cambodia than any other company.
Europe received about 35,000 TEU (20-foot containers) from Cambodia during 2011, much of it coming from the garment and footwear factories here.
“European global retailers have increased their sourcing out of Cambodia as compared to other countries,” Wilson said.
The jump in exports is credited to the Everything But Arms (EBA) initiative by the European Union under which all imports from Least Developed Countries (LDCs) are duty free and quota free, with the exception of armaments.
Growth of trans-Pacific shipments from Cambodia grew at about about three per cent during 2011.
“There were no changes in the US so the growth stayed about the same,” Wilson said.
Despite a big jump in 2011 exports to Europe, Wilson says the European market has since weakened.
“My opinion is we are seeing quite a weak market in Europe and the growth is not going to be as strong as it was last year.”
While the North American market remains Cambodia’s biggest, Wilson predicts growth of about five per cent for that market.
“The intra-Asia trade looks like it will continue to grow. The Asian economies are not suffering as much as Europe and there’s more investment from Japan, for example, in Cambodia. We may see more rice shipment growth in the region. We’ve seen a lot of rice to Malaysia and there’s a lot of talk about rice to China.”
Wilson says the Cambodian economy is starting to diversify.
“The future is going to be in labour intensive, low-skilled manufactured items. There is one company assembling children’s bicycles here. Other companies are doing wiring systems and furniture production. They are competing for the same labour pool as the garment factories and from what I understand could cause a labour shortage,” he said.
Wilson said one reason shipping out of Cambodia is expensive is because the volume is smaller, which prevents the economies of scale enjoyed by larger markets in Vietnam or Thailand.
He said an efficiency study of Cambodia’s ports by the Japan International Cooperation Agency (JICA) recommended private involvement in ports.
“That’s something we’d like to see the government look at seriously,” Wilson said. “They’ve done it with airports. They could also do it with sea ports. Based on our experience in other countries we’ve seen how privatisation of ports can increase efficiency and reduce costs. That is something we would encourage the government to consider.”
Wilson said he was sure the new Phnom Penh River Port, scheduled to be operational later this year, would be successful. He sees a lot of potential for agriculture in Cambodia’s future.
“There is a lot of potential for production of the more expensive fruit like mangos and bananas that could be sold in the overseas market.”
Wilson, 32, of Yorkshire, England, has been with Maersk for 10 years, the last year and a half as Cambodia’s country manager.
He runs a Phnom Penh office located adjacent to the Hotel InterContinental that employs 24 people.
Shipments to North America totalled about 50,000 TEUs during 2011, Wilson said, with 60 per cent of going out of the Sihanoukville port and 40 per cent going down the Mekong to the Cai Mep port in Vietnam from the Phnom Penh River Port.
That contrasts with the European shipments about 90 per cent of which depart from Sihanoukville.
Wilson says this is because of the connection with very large container ships to Europe operating out of Malaysia and Singapore.
Maersk Line is one of the business divisions within the AP Moller Group.
In addition to its ownership of the Cai Mep port near Vung Tao at the mouth of the Mekong, AP Moller owns the port at Tajung Pelepas port in Jahore, Malaysia, just above Singapore.
Maersk Line operates more than 600 vessels, among them some of the largest container ships in the world.
Here in Cambodia, Wilson is responsible for Maersk Line.
“Maersk line is a global network, and we can serve any country in the world from Cambodia. We have two weekly scheduled services to Sihanoukville Port, and the main one goes to Tajung Pelepas our main Southeast Asia hub port. We have huge vessels that come down from China, pick up the Southeast Asia cargo, and go on to Europe.”
Some of the major European ports served include Rotterdam in the Netherlands, Felixstowe in England and Bremerhaven in Germany.
Exports from Phnom Penh are growing faster than exports from Sihanoukville, Wilson said.
“We have big ships calling in Vietnam and going to US west coast. But for Europe, we have big ships calling in Malaysia and other companies calling in Singapore.”
Wilson said the factories of Cambodia tended to work towards the shipping schedule, setting production deadlines to meet the ships.
Denmark’s richest man, Maersk McKinney Moller, just died on April 16 at the age of 98, getting what amounted to a state funeral in Demnark. He was the son of the company’s founder.
“He was one of those incredible characters who started working before World War II and worked until a week before he died,” Wilson said.
A new product called Daily Maersk has been rolled out, according to Wilson, whereby the shipping company introduces daily cut-off times and guarantees arrival by a certain date.
“This is important for customers that are shipping from Cambodia. The garment and footwear purchasers from Cambodia they have very tightly managed supply chains and they don’t want to keep a lot of inventory. They need high reliability of service. When we say the shipment is going to be there in 21 days, it is there. Maersk is leading the industry in reliability.”
To contact the reporter on this story: Stuart Alan Becker at firstname.lastname@example.org