A new port in Vietnam on the Mekong Delta called Cai Mep is likely to become the transshipment point for good part of thecontainer traffic from the factories of Phnom Penh in future, motoring down the Mekong from Phnom Penh River port loaded with Cambodian-made factory goods, according to career shipping and logistics expert Paul Thomas.
Cai Mep International Terminal is part of the Vung Tau Port complex near Ho Chi Minh City and is operated by APM Terminals, headquartered in The Hague in the Netherlands.
“Cai Mep offers direct sailings to European ports without Singapore. You don’t have to go 230 kilometers from Phnom Penh to Sihanoukville. The cost factor is not that dramatically lower, but it is a little bit,” Thomas said.
Thomas, who served in the German Navy early in his career and after many years of shipping and logistics work mainly based in Singapore,first arrived in Phnom Penh in 1996. He is former president of the German Business Association in Phnom Penh.
Today, he’s expanding his family logistics company Thomas International Services Co. Ltd. by planning a new transshipment and packing warehouse to be located somewhere near the new Phnom Penh River port which is located about 35 kilometers from Phnom Penh. He’s looking for a professional engineering and design company to prepare the plans.
Thomas International Services has two facilities, with the main office in Parkway square and a logistic 3,000 square meter logistics facility outside Phnom Penh and 50 employees.
“Sihanoukville will lose some of its importance because Phnom Penh Port has a new port coming,” Thomas says. “Sihanoukville’s importance in coming years will have to change with “break bulk” vessels, which means taking conventional, non-container cargo.”
Thomas says containers will continue to pass through Sihanoukville, but he believes what’s going to be very important for Sihanoukville is rice shipments up to 10,000 metric tonnes in large break bulk vessels.
“Rice exports have increased tremendously here, but it is not economical to load rice into containers. You need break bulk vessels and then you can go straight anywhere in the world. 2011 was booming year from Cambodian exports. “
He also thinks more and more cruise ships will use the Sihanouk-ville Port.
Thomas believes Cambodia’s economic future is excellent.
“I believe the future is not only rosy; the future will be very structured andyou have a lot of business opportunities in Cambodia, and we have restructured our company to be in a position to take advantage of opportunities not only in container traffic but technical services and professional maintenanceincluding plumbingand electrician services,” he said.
Thomas said fairs and exhibitions will be more important in the years to come.
“We will have more coming up as a counterpart to handle goods going in goods going out.”
Thomas says the logistic scene in Asia changed during the 1990s, when textile-producing companies in Europe relocated their operations to offshore facilities, mainly in Asia, and old established com-panies in Europe had to reduce their staff in big numbers.
“When the logistics scene in Asia changed in the 1990s in the regional aspect, you had to be present in all locations,” he says.
One of the interesting ways in which the Cambodia garment industry differs from others is that has no supporting industries to make yarn and fabrics, he said.
“The labor part is only a certain percentage of the complete product; it is not always the cheap labor, how to source raw materials, how to bring them here. Cambodia has no fabrics, no yarn. Korean and Taiwan, for example, had all kinds of supporting industry.Cambodia does not have supporting industries. Cambodia has a Chinese textile industry in Cambodia,” he said.
“Vietnam and Indonesia have foreign investors who are running factories, and local conglomerates running textile and footwear businesses, but here in Cambodia, 99.5 per cent is overseas Chinese investment.”
Thomas says a huge British fact-ory has just opened in Cambodia, making trousers and jackets.
Thomas’s right-hand man is his son Chris, who said what makes Cambodia favourable is the ease of doing business.
“Transferring money in and out, it is totally open channels in Cambodia. Compared to Thailand and Vietnam, Cambodia makes it easy,’’ he says.
“If you buy something overseas, you pay, and you don’t have a problem. That is very attractive for Chinese investors too. You can transfer money in and out without any hassle, but in Vietnam it is very diff-icult,” Chris Thomas says.
“The freight-forwarding business is the business of buying services from a direct service provider and reselling it to a customer,” Paul Thomas said.
Thomas first came to Cambodia in 1996 and has been a resident here since 1999, starting business in Phnom Penh with four or five employees.
“When Cambodia started in 1996 with the first garment factories, the export market was clearly North America. It came into the picture because it was not subject to quota, and that made certain Chinese companies open factories here.”
In those days, transshipment to Singapore was required, and |a 40-foot container from Sihan-oukville to Singapore cost $4,000. Today, the cost is only about $500.
“When small players came in, prices came down.
“More and more production came in and Europe became a factor, and the proportion was 70 per cent North America and 30 per cent Europe; today, it’s 60 per cent North America and 40 per cent Europe,” he said.
“The proportion has changed, but North America is still the major market.”
Europe is starting to come back as a major market for Cambodian goods, Thomas says.
“At first there were relatively small orders from very good European companies, so the big textile retailers and importers Scandinavia, France, UK, Germany, started to buy insmall quantities, and this has been developed into bigger quantities.”
One of the major businesses of Thomas International today is dealing with “buyer’s consolidations”, receiving from as many as 18 different factories, sorting the orders and finalizing the check of
merchandise before exporting. The trick is to utilize the containers to their maximum capacity for the benefit of the importer in Europe, says Thomas.
Nearly 98 per cent of Thomas’s work ships to Europe, with Rotterdam being the number one port destination “by far”.
Goods shipped from Cambodia include children’s clothes, knitted clothes, cardigans, T-shirts, blouses, trousers and other items.
“We are also shipping rice, and we are also participating in the Rice Forum next week. This year we did about ten thousand tonnes of rice, with most of it going to France and eastern Europe,” he says.
In 2009, when Thomas Internat-ional was opened, it specialised in packing highly valuable art items, including many for the National Museum of Cambodia, the Smith-sonian Institution and big exhib-itors in places such as Germany and Switzerland.
Thomas folded his earlier comp-any into the new one, which is now a Cambodian company with his wife and family as shareholders.
His wife, Nitta Yin, is the chairwoman of the company, and along with the changes came the appointment of an accredited local auditor and a legal adviser.
Mr. Huot Chan, Country Manager
Mr. Christopher Thomas, General Manager and Director.
Mr. Paul Thomas, Managing Director.
Ms. Nitta Yin, Chairwoman and Majority Shareholder.