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Logo of Phnom Penh Post newspaper Phnom Penh Post - Travel goods makers to scout market

An attendant rearranges suitcases and bags earlier this year at a shop in central Phnom Penh.
An attendant rearranges suitcases and bags earlier this year at a shop in central Phnom Penh. Hong Menea

Travel goods makers to scout market

Representatives of 14 Chinese travel goods manufacturers will fly to Cambodia next week for a five-day scouting mission to test the Kingdom’s potential for investment, building off of the success of a roadshow in Hong Kong last month to promote the country’s new preferential trade access to the US market, industry insiders said yesterday.

Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia (GMAC), said that he hopes firm capital commitments will be cemented after the delegation meets Cambodian trade and investment officials and garments manufacturers, and tours some of the Kingdom’s special economic zones.

In July, the US government expanded the Generalised System of Preferences (GSP) scheme to include travel goods manufactured in Cambodia, granting these goods duty-free access to the US market.

Since then, GMAC and government officials have worked alongside US Embassy officials to promote Cambodia’s industry to overseas investors looking to migrate away from the rising costs of manufacturing in China.

“We hope they will make investment decisions, which will show the world that we are diversifying the products that we manufacture for export,” Sou Ieng said. “Travel goods provide more added value than garments, so that will mean workers can get better salaries and become more competitive.”

While Cambodia’s share of the global travel goods market remains relatively small, it has grown impressively in the last five years. Total exports were just $240,000 in 2011, but topped $48 million last year.

According to Sou Ieng, 15 manufacturers in Cambodia currently produce eligible travel goods, and he estimates that the revised GSP scheme could push exports to $200 million annually, adding 100,000 new jobs.

He added that once Cambodia can prove that it can attract investment into the travel goods industry, it would be natural that manufacturers in the electronics and automotive industry would follow suit.

GMAC has previously claimed that Cambodia needs to quickly capture this market potential, especially as the US Congress is considering expanding the trade preference to some of its regional competitors.

Soeng Sophary, spokesperson for the Ministry of Commerce, said that with the potential cancellation of the Trans-Pacific Partnership (TPP) by newly elected US president Donald Trump – a deal in which Vietnam was anticipated to gain a large competitive edge – Cambodia could remain a profitable destination for investors.

“We feel more secure that investors who come will not turn away from us and we hope new investors will continue to flow in,” she said.

However, she was quick to note that Cambodia needs to continue to build on a creating a welcoming investment climate with a high-quality workforce in light of overall regional competition.

“We have become a player in the region so we need to prepare to be ready for competition at anytime because other trade agreements similar to the TPP could someday appear,” she said. “We need to be sure that if there is another regional trade deal coming, we can be included.”

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