THE first phase of the Phnom Penh Special Economic Zone (PPSEZ) on the outskirts of the city is now 70 percent occupied, Managing Director Hiroshi Uematsu said Tuesday.

Deterioration of the Cambodian and world economies meant that "new investment died" between October and the end of March at the zone, he said.

"Fortunately, from April, the situation started to change," Uematsu said, adding that he hoped the remaining 16 hectares of phase one would be sold by the end of the year.

About 13 companies have signed contracts to operate within the special economic zone - the most high-profile being Japanese company Yamaha - but "some companies are not performing on time", he said, referring to delays in building factories due to the economic crisis.

Yamaha was supposed to begin construction on its motorcycle assembly factory in January, said Uematsu, but had still not done so due to concerns over dropping demand for motorcycles in the Kingdom.

He said that PPSEZ was currently in negotiations with a number of foreign companies to invest including a large Japanese food-processing firm that he hoped would conclude negotiations next month.

The zone has added four new tenants this year, he added, the latest a Taiwanese company that produces shoe soles that Uematsu declined to name because it is still processing its investment licence.