Delta Electronics (Thailand), one of the world’s leading producers of power supplies and electronic components, plans to expand to Cambodia and Myanmar, the Bangkok Post reported on Wednesday.

“There is no indication of a specific timeframe for the expansion, but the company sees these countries . . . as distributing channels of supply chain to other Asian and European countries,” the report said.

 Asian Development Bank deputy country director Peter Brimble said, while he cannot speak for Delta about their reasons for moving to Cambodia, generally “regional automotive and electronics firms are looking to expand and spread their operational risk, including firms based in Thailand.”

Brimble said increases in labour costs in Thailand and other Asia locations, the floods in Thailand, political instability, as well as improvements in the attractiveness of Cambodia as an investment location may have been contributing recent developments.  

“It is interesting to note that most of the firms expanding operations in Cambodia are the same firms that moved to Thailand some 20 to 25 years ago, even producing the same products. This is contributing to the increasing diversification of Cambodia’s economy, and reflects the rapidly improving business climate here.”

Brimble said it demonstrates the effectiveness of the southern economic corridor – linking Bangkok to Ho Chi Minh City through Phnom Penh – “and its critical role in supporting the fragmentation of global value chains into Cambodia, and in allowing these international firms to maintain their competitiveness in internationally”.

Delta Electronics (Thailand) could not be reached for comment yesterday.

The Post reported in December that Japanese car parts supplier the Yazaki Corporation announced the launch of its automotive electronics and instruments plant in Koh Kong Special Economic Zone.

In December 2011 it reported that Japan-based electronics manufacturer Minebea invested $60 million on a plant in Phnom Penh Special Economic Zone.