Having established itself with Japanese automotive parts manufacturers, Phnom Penh Special Economic Zone said on Friday that going forward it will target German companies with similar operations, to increase investments at its current and proposed Poipet economic zones.
Hiroshi Uematsu, CEO of Phnom Penh Special Economic Zone (PPSEZ), said the weakening of the yen against the dollar could slow down new private Japanese investments, but the SEZ could capitalise on the presence of German, French and American companies in the region.
“From Asian countries, probably Japan is the most developed [auto parts manufacturer], and from the European countries, Germany is the most developed,” Uematsu said. “So, we want to get German companies.”
But despite a weakening yen, Uematsu said that the PPSEZ was working to persuade Japanese auto parts manufacturers in Thailand to transfer part of their production line to Poipet – the location of PPSEZ’s next economic zone.
He added that uncertainty with the Thai political situation and the 2011 floods, which brought the region to a standstill, has led to Japanese investors considering diversification of their production base.
“There are some products and production process that needs labour and relatively low skills, and they can extract that and bring it to Poipet,” he said.
Given that these processes will hinge on low-cost labour, Uematsu said he was hopeful that any increase to the minimum wage in the Kingdom will be “rational and reasonable.”
PPSEZ had announced intentions last December to go public early this year on the Cambodia Securities Exchange (CSX), but Campu Securities, its underwriter for the listing, said the process was now expected to be completed only by the end of this year.
Goh Keat Lye, CEO at Campu Securities, said despite the stock exchange’s initial lethargy in terms of stock activity, the two already-listed companies – Phnom Penh Water Supply Authority and Grand Twins International – have announced healthy dividends, which will spur interest in the exchange.
“With increasing dividends there will be more stock trading activities at the CSX,” said Goh.
“We feel that this will continue to improve and spur more companies, like PPSEZ, to list on the stock exchange.”
Once listed, PPSEZ will enjoy a three-year 50 per cent tax break, which was announced by the government early 2014, in a bid to encourage companies to list on the fledgling exchange.