Japanese firm Sumitronics signed a lease to become the first tenant at the Poipet Special Economic Zone, which was established as a subsidiary of the publicly listed Phnom Penh Special Economic Zone (PPSEZ) in 2014.
The electronics firm leased a 1-hectare plot of land in the zone, moving its manufacturing operation 8 kilometres outside the border town of Poipet in Banteay Meanchey province, where it had been located since 2016.
“This is a historical agreement for us and a milestone,” said Hiroshi Uematsu, CEO of the PPSEZ, in a press release. “We expect more companies to set up their operations at Poipet PPSEZ in the near future.”
The terms of the lease were not disclosed.
According to PPSEZ’s most recent financial filings, the group earned 96 percent of its revenue from its Phnom Penh SEZ operations last year, while it has provided about $5.7 million in advances to the Poipet PPSEZ since 2016.
The Phnom Penh SEZ Plc group’s overall revenue has fallen every year since 2014, when it posted revenue of more than $20 million. That amount fell to $16.4 million in 2015, $9.2 million in 2016 and $8.8 million in 2017.
Profits rose during that same time period, increasing from $1.4 million in 2016 to $1.7 million last year, largely due to an increase in “other income” and a decrease in general administrative expenses.
While the Phnom Penh SEZ operation posted a profit of $2.1 million last year, the group’s overall profit was just $1.7 million.
According to the Poipet PPSEZ website, the zone aims to attract electronic, garment, automobile and plastic industries seeking easy access to major cities in the region.
“Poipet, with its strategic location, geographical connectivity and abundant young labour force nearby, is becoming a regional hotspot for industrial development in inter-Asean investments,” Uematsu said in the release.