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$297M tyre plant set for SSEZ

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There has been growing interest in setting tyre factories in the Kingdom, with Preah SIhanouk and Svay Rieng provinces emerging as preferred locations. YUANTA SECURITIES CAMBODIA

$297M tyre plant set for SSEZ

China's General Intelligence (Cambodia) Co Ltd is investing $297 million to set up a tyre factory in Sihanoukville Special Economic Zone (SSEZ) of the southwestern coastal province of Preah Sihanouk.

The Cambodian Special Economic Zone Board (CSEZB), under the Council for the Development of Cambodia (CDC), on January 25 said it had approved a final registration certificate for the project.

SSEZ lies on a whopping 11.13sq km in Bit Traing commune’s Pou Thoeung village in Preah Sihanouk province’s Prey Nop district.

The venture has been hailed by senior Ministry of Commerce officials and Preah Sihanouk provincial authorities for its potential to boost economic growth in the province and nationwide in the post-Covid era.

Ministry spokesman Pen Sovicheat told The Post that his ministry “always encourages” local and foreign investors to invest more in the production of goods for export “to meet the market demand that we get through free trade agreements, and to transfer and share knowledge related to new technologies”.

Preah Sihanouk provincial deputy governor Long Dimanche told The Post on January 26 that the new tyre factory was “good news” for the province, and an indication of the private sector’s confidence in the state of the Cambodian economy.

He added that this would be an opportunity for Preah Sihanouk to build investor confidence as a “qualified province” that can facilitate investment, as it transforms into a “Model Multi-Purpose Special Economic Zone”, a regional innovative logistic centre and resort.

“In the future, Preah Sihanouk will no longer depend on only the service or tourism sectors. On the contrary, the province will more and more rely on the development of technology, production of goods and equipment for export as well,” Dimanche said.

Cambodia Chamber of Commerce vice-president Lim Heng pointed out that the project would not be the first tyre factory, noting that another in Svay Rieng province is in the works.

Still, the latest project would bode well for the Cambodian rubber market, he said, voicing hope that the factory would source locally-produced natural latex. He also noted that purchases would be free from value-added tax under the new investment law.

“Our rubber used to be solely dependent on foreign markets, especially neighbouring countries, so any major snags would impede cash flows from investors into the rubber sector,” Heng said.

“The larger a market we find domestically, the better it’ll support the rubber sector as well as expand our rubber plantation areas.”

In a similar undertaking, Chinese company Cart Tire Co Ltd, a subsidiary of Sailun International Holding (Hong Kong) Co Ltd, has invested $350 million in a tyre factory for export, on 50ha in QiLu (Cambodia) Special Economic Zone of Svay Rieng’s Bavet town.

In November the firm exported a first trial shipment of tyres.

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