Japan’s Denso Corp, a global supplier of advanced automotive technology, as well as systems and components for major carmakers, has begun construction of its second factory in the Phnom Penh Special Economic Zone (PPSEZ).
PPSEZ managing director Hiroshi Uematsu hailed the company’s expansion.
“On the morning of November 14, as the developer of Phnom Penh Special Economic Zone, we were very proud to attend Denso (Cambodia) Co Ltd’s groundbreaking ceremony.
“Denso started their investment in our zone in 2013 with a rental factory. After some years of operation, they decided in 2016 to invest in their own manufacturing plant.
“And today we are glad that they have expanded their facilities, which means business has been growing well.
“We would like to express our sincere congratulations to Denso (Cambodia). We will keep working hard to support the company and other investors in the zone to make everyone feel fully satisfied with our services,” Uematsu said on Facebook last week.
Cambodian Investment Management Co Ltd founder and group CEO Anthony Galliano said Denso’s expansion in Cambodia was encouraging and set a precedent for potential manufacturers seeking alternative destinations in which to expand.
Asia is Denso’s primary manufacturing hub, with over 74 subsidiaries and 50,000 employees, he said.
“Cambodia should benefit from Denso’s diversification and expansion, especially from their significant concentration in Thailand and the positive results since their establishment in the Kingdom in 2013.
“Japanese manufacturing investment is presently targeting Vietnam and India, and relying less on China, as a means of strengthening their position as production hubs and establishing footholds in large consumer markets.
“Cambodia is a diversification play, with a strong economy and relatively inexpensive labour. However, high electricity costs, under-developed infrastructure and a stretched labour pool remain deterrents.
“Japanese investment in the Kingdom will increase, but the Kingdom’s slice of the pie will be marginal,” Galliano said.
He said Japanese investment generally brings with it the most sophisticated manufacturing technology, especially in automation and robotics.
Cambodia will initially attract low-skilled manufacturing, he said; however, over time this would change, with the Kingdom benefiting greatly from technology transfer.
The Council for the Development of Cambodia approved Denso’s first manufacturing plant in the PPSEZ, which cost some $21.45 million, in early December last year.
The PPSEZ is located in Por Sen Chey district’s Kantaok commune in the capital, and can be entered from National Road 4.