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Logo of Phnom Penh Post newspaper Phnom Penh Post - US$11 million cement plant to move ahead

US$11 million cement plant to move ahead

After initial delays, a local building materials company says that construction on a new cement and tile plant will begin next month.

Cambodia's largest construction company, Khaou Chuly Group (KP Group), says it is to go ahead with a ready-mixed concrete and tile factory, despite falling local cement demand.

Construction was delayed from the last quarter of 2008 due to the economic slowdown.

"The plant will be ready in August. The total investment is US$11 million including land, buildings, machinery and heavy vehicles," said Khaou Phallaboth, president of Khaou Chuly Group.

The plant is to be located on a two-hectare plot near the Northbridge School in Phnom Penh's Russey Keo district.

   We are optimistic that the economy will start to recover at the end of this year.

The company said the plant will manufacture cement and roof tiles, with construction set to commence next month.

Demand for building materials has taken a hit from the construction slump, and the country's largest cement maker, Kampot Cement, said Tuesday it was cutting output in two  10-percent phases. But KP says it is banking on a recovery.

"We are optimistic that the economy will start to recover at the end of this year - but not a full recovery, of course," he said. He added that the new plant will generate about 100 jobs, with capacity of 150,000 tonnes of ready-mixed concrete per year and 50,000 units of concrete roof tiles per day.   

Ith Praing, a secretary of state at the Ministry of Industry, Mines and Energy, welcomed the investment project.

"It shows the evolution of the construction sector, even though there is a real estate downturn," he said.

Sat Phearum, management assistant to Grand Industrial, which has produced ready-mixed concrete since 1996, said that the local market is large enough for new players.

"Our company is not concerned about the new investment by the Khaou Chuly Group because we have many years' experience."

However, he said that demand for ready-mixed concrete has declined by 50-percent since the slowdown started in June 2008.

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