The Council for the Development of Cambodia (CDC) has approved the establishment of a $40 million steel factory by Huale Steel (Cambodia) Co Ltd in Sihanoukville Special Economic Zone to push up production to meet the development of the construction sector.

The approval, which was given on September 20, would see the creation of 523 jobs.

Speaking to The Post on September 21, Cambodia Constructors Association general manager Chiv Sivpheng said the increased investment flow via the steel processing plant would have a positive effect on the economy.

This includes employment, reducing the cost of transportation from abroad, and particularly lowering the cost of construction, he said, adding that the local steel plant would help accelerate the growth in the construction sector in Cambodia.

“We welcome more investments in processing steel to supply in the construction sector because it helps the construction sector become stronger and less dependent on imported products,” he said.

Commenting on the construction and real estate sectors, Sivpheng said the construction sector is gradually improving as investments in the industry are now underway for a number of major projects, which is very different from the “relatively quiet period between 2020 and 2022”.

“In the last few months, I have seen a number of new construction projects, most of which are owned by foreign investors,” he said.

Huy Vanna, secretary-general of advisory firm Housing Development Association of Cambodia, said after a sharp surge, the construction sector in Cambodia plummeted with the arrival of Covid-19, with many construction activities suspended. However, things have “started to get a little better” as the threat of Covid-19 tapered.

The sector now features housing development by local developers which are built to meet the needs of local people. Currently, most of the construction materials, including the steel used in the construction sector in Cambodia are imported from Vietnam, China and Thailand.

“The presence of local products would help reduce the dependence on imported products, and would slightly lower construction costs as well,” Vanna said.

According to the General Department of Customs and Excise of Cambodia, in the first eight months of 2023, Cambodia disbursed $254.4 million on iron and steel imports, an increase of 3.9 per cent compared to $244.8 million in the same period in 2022.