The British Chamber of Commerce (BritCham) celebrated 20 years of service in Cambodia on September 3. David Tibbott, BritCham’s Chairman and country manager for property group Hongkong Land, took some time out of the celebrations to discuss the chamber’s past and present goals in Cambodia.
BritCham is turning twenty this year. Where do you see your organisation heading in the next twenty years?
From its establishment in 1995 as a British Business Association to the fully-fledged Business Chamber that is BritCham today twenty years later, we have seen the organisation evolve and change. On the surface, this evolution reflects the needs of an organisation meeting a changing environment as Cambodia transitions and develops at an ever-quicker pace and consequently, attracts more interest and investment from the UK.
In the next twenty years, we will therefore continue to focus our activities around three core areas that we see as helping to reinforce our mandate. These include firstly, establishing ourselves as the forum for British business in Cambodia or for those with an interest in commerce between the UK and Cambodia; secondly, promoting trade and investment between the two countries; thirdly, further strengthening our value proposition to current and future members.
What have been your most successful projects to date?
BritCham as a Business Association and a Chamber of Commerce has had many key projects. These include our involvement in founding the European Chamber of Commerce in Cambodia to professionalising British commercial presence in the country with our transition to a registered Chamber of Commerce in 2013.
Today, BritCham is part of a global network of British Business Associations and Chambers providing advice and assistance to UK companies – focusing mainly on SMEs – doing and seeking to do business in Cambodia. Known as the ‘Overseas Business Network initiative’, this is a UK Trade & Investment (UKTI) funded project that aims to strengthen the UK’s global B2B network to encourage more UK companies to export and do business in emerging markets like Cambodia.
What is the largest investment by a UK company in Cambodia to date?
Traditionally, Cambodia’s garment industry has attracted the biggest share of the UK’s investment into the country. Quantum Clothing, for example, has been one of the largest British garment manufacturers in Cambodia.
That said, today we find UK companies making large investments in other key growth sectors of the Cambodian economy, including construction and property development, and the financial services. Prudential Life Insurance, Hongkong Land and Jardine Matheson , which has invested in companies like Dairy Farm, Acleda Bank, Guardian pharmacy and Lucky supermarkets, are examples of UK companies currently investing in Cambodia.
Also worth mentioning are those sectors where we believe UK companies should be making investments in the future in Cambodia. The Chamber will further assist in promoting the above-mentioned sectors, as well as education and vocational training, agro-business and look to the potential of leisure and tourism, and mass transport sector, and healthcare.
What was the level of trade between Cambodia and the UK last year? Where do you see it heading in the future?
In 2014, bilateral trade between the UK and Cambodia surpassed $1 billion. This indicates a very positive trend for the future of trade between the two countries. This year, Cambodia moved to lower middle-income status by the World Bank, which will further encourage interest from UK companies to Cambodia.
How can Cambodia attract more foreign investment? What are the challenges?
The recent launch of Cambodia’s Industrial Development Policy (IDP) has outlined some important steps that the government plans to take to attract more foreign investment, or FDI, into the country and improve the investment climate. The creation and further development of Special Economic Zones will provide further incentives for companies looking to invest.
Challenges around access to transparent information on FDI into the country has been raised, which from an investor’s perspective, can be a hindrance to being able to measure risk in an investment. Moreover, the National Bank of Cambodia has also launched its own survey of foreign investors operating in Cambodia with a view to better understanding the benefits of investment to the local economy.
In the UK, there has been backlash against “fast fashion” made in countries like Cambodia. What are UK companies or importers doing to improve working conditions at factories here?
The garment industry represents an important sector in Cambodia and a sizeable part of the UK’s investment into the country. Working conditions for factory workers is generally the issue that is raised around the discussion of “fast fashion” made in countries like Cambodia.
The International Labour Organisation’s (ILO) ‘Better Factories Cambodia’ initiative is one mechanism that companies in the industry can use to address work conditions in factories. Principally, the program aims to improve compliance of Cambodia’s garment factories with international norms through a number of approaches. We believe this is an important recourse for the industry and we certainly encourage UK companies to make use of it.
What kind of demand is there for British products in Cambodia, especially luxury?
The latest trade figures from the British Embassy point to major imports from the UK to Cambodia being in machinery and transportation equipment.
The demand for British luxury goods is certainly growing in the market. Even on a regional scale, figures show that the top three UK goods exports to Southeast Asia are engines, motorcars and whisky, the latter two being mainly luxury products. In Cambodia specifically, we see a dominance of the automotive sector, and can now find UK brands Land Rover, Jaguar and Rolls Royce already operating. Although Cambodia offers a small market overall, as mentioned before, there is a fast growing middle-income consumer class, as well as the existence of a fortunate class of the extremely wealthy who will be buying luxury products.
Having said that, the potential for British luxury products could be bigger. A lot of work still needs to be done to raise the profile and awareness of the “British Brand” among consumers in Cambodia.
This article has been edited for length and clarity.