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FDI on the rise despite virus, EBA withdrawal

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The Council for the Development of Cambodia (CDC).

FDI on the rise despite virus, EBA withdrawal

Despite several internal and external challenges, the number of investment projects submitted to the Council for the Development of Cambodia (CDC) is on the rise.

On Monday, CDC reviewed 15 new projects, amounting to a total capital investment of $539 million.

The ventures discussed at Monday’s meeting include projects in the renewable energy, wiring and electrical equipment, tire production, hospitality, agriculture, food and beverage, healthcare, and steel sectors.

Royal Academy of Cambodia researcher Hong Vannak said on Thursday that interest from foreign countries in the Cambodian market is growing as the government maintains political stability and expands trade relations with other countries.

He predicted that economic growth in 2020 will not be much lower than in 2019, despite the impact of the ongoing novel coronavirus outbreak and the partial withdrawal of the EU’s Everything But Arms (EBA) scheme.

“Since the beginning of the year, many companies have applied to register projects with CDC and many of these projects have been approved. A lot of these projects come from China,” he said.

The influx of foreign direct investment’s (FDI), Vannak said, will help offset the economic repercussions of the loss of jobs that the garment sector is experiencing as a result of Covid-19.

Cambodian Chamber of Commerce vice-president Lim Heng said the country is gradually recovering from a raw materials shortage in the garment and footwear industries as shipments from China resumed this week.

“Cambodia has great investment potential in all sectors,” he said.

The CDC approved four projects, worth a combined $17.4 million, during the first 10 days of February.

Among the greenlighted ventures is a Timberpack Carton Co Ltd factory, which will be built in Kandal province’s Ang Snuol district with a capital of $3.8 million. The project is expected to create 138 jobs.

The CDC also approved a shoe factory in Phnom Penh’s Dangkor district that will be developed by Fortress International Co Ltd with an investment of $5.6 million. According to the CDC, the factory will create 1,928 jobs.

Another shoe factory project, this time by Qi You Footwear (Cambodia) Co Ltd, has been given the thumbs up. It will be located in Kandal’s province Ang Snuol district. The factory will cost $5.5 million to build and is expected to generate 1,834 jobs.

Finally, the CDC approved a garment factory project by Home Textiles of Texssel (Cambodia) Co Ltd that will be located in Kampong Speu province’s Bor Seth district. With a capital of $2.5 million, the project is expected to create 1,034 jobs.

CDC secretary-general Sok Chenda Sophea said last month that the number of applications filed to the CDC has not declined despite the Covid-19 threat and the fact that Cambodia will lose 20 per cent of its preferential trade with Europe beginning in August.

He said Cambodia remains a very attractive destination for foreign investment. “While some projects have been suspended or cancelled, new investors have come in,” he said.

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