The $100 million zone currently under construction on the Vietnam border will rival Poipet in trade volume: company

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A promotional drawing of the Duong Chhiv Special Economic Zone planned for the Vietnam border.

A NEW US$100 million special economic zone is in the works for the Vietnam-Cambodia border in a project that pundits say could rival the Poipet border crossing.

The 100-hectare Phnom Den Special Economic Zone would cater to agricultural processing companies and is slated for completion in 2015.

Cambodia has 19 licensed SEZs, but only six are in operation.

The Cambodian-owned Duong Chhiv Group was given the go-ahead for the zone through a 2006 government subdecree.

Duong Tech, general manager of Duong Chhiv Group, said that the company has completed about 10 percent of the project including construction of essential infrastructure, warehouses and housing compounds. A key initial stage of the project - filling the low-lying land with soil - has also been finished.

"We spent the past two years refilling three million cubic metres of land, and we are now equipping the site with electricity and clean water supplies," said Duong Tech.

"We hope that this SEZ will help the country increase trade with Vietnam by $1 billion a year. The project should provide jobs for 5,000 to 10,000 people, and should see comparable trade volumes to Poipet," he added.

Bilateral trade boost

Kim Sithan, a secretary of state at the Ministry of Commerce, said SEZs are an important part of the government's plans to boost trade and employment.

"I think bilateral trade between Cambodia and Vietnam will increase to over $2 billion per year once the SEZ is completed," he said.

He added that trade between Cambodia and Vietnam has reached an estimated $1.6 billion and is expected to reach $2 billion in 2010.

A senior official in charge of SEZ projects at the Council for Development in Cambodia said that Phnom Den will play an important role in boosting trade and local production.

"If Phnom Den can achieve its goal, it will be similar to Poipet. It will attract both tourists and businesses because it shares a border with the An Giang province of Vietnam, which is a high-growth region," said the official, who asked not to be named.

He added that the company has been building warehouses and factories to process goods for export and is upgrading infrastructure in the zone.

The government has licensed six SEZs along the Vietnam border. Two are in operation and four are in the development stage, the CDC has said.

According to Tong Lim, governor of Kirivong district in Takeo province, the SEZ will help bring jobs and growth to the district.

"Local people will be better off as the zone will build infrastructure and locate many factories which can buy people's agriculture products," Tong Lim said.

Agricultural processing facilities in the SEZ would provide local farmers with a market for corn and cassava. Currently, their primary market for rice and other agricultural products is Vietnam, he added. 

Independent economist Sok Sina said that not enough data is available to determine the future of SEZs in the country.

"I think if the SEZ uses local raw materials, it will improve agriculture and expand the country's production base," he said.

"SEZs can be an effective way of reducing our trade deficit," he said.