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PPSEZ shores up land deal prior to CSX listing

An employee inspects manufacturing equipment at the Phnom Penh
An employee inspects manufacturing equipment at the Phnom Penh Special Economic Zone. Hong Menea

PPSEZ shores up land deal prior to CSX listing

Phnom Penh Special Economic Zone, the Kingdom’s most-developed SEZ, says the land deal for its planned SEZ in Poipet will be concluded before PPSEZ lists on Cambodia’s stock exchange.

Hiroshi Uematsu, CEO of PPSEZ, said that 53 hectares of land near the Thai border had already been acquired by the firm and were in the process of transferring ownership to a new company, which will be a full subsidiary of PPSEZ.

“It will happen before [the] IPO,” he said.

Uematsu said the cash from PPSEZ’s listing, which is expected to raise $15 million, will be used to develop infrastructure on the land.

He added that fully acquiring the land was “a small step” in the Poipet SEZ’s development, as the SEZ would expand further beyond its initial 53 hectares.

PPSEZ has said previously that it planned to list on Cambodia’s stock exchange – which only has two companies to date – by mid-year, although Uematsu declined to give a more specific date yesterday.

The Cambodian Stock Exchange has yet to receive the full listing application.

Hiroshi Suzuki, president of the Business Research Institute of Cambodia, said an SEZ near the Thai border could help lure in Japanese companies established in Thailand.

The majority of the 77 companies in the 357-hectare PPSEZ, located on the outskirts of the capital, are Japanese.

Although Thailand ranks as Japan’s second-largest foreign direct investment destination in Asia, higher wages could balance the equation.

“From the viewpoint of the Japanese manufacturing sector in Thailand, Cambodia has two major advantages: one is low labour cost, second is good connectivity with Thailand,” Suzuki said.

Suzuki added that lower-end product assembly done by Japanese firms in Thailand could be shifted to Cambodia, from where products could then be re-exported for more complex assembly to Thailand.

“Even a factory in Poipet and Phnom Penh could send their products to Toyota and Mitsubishi in the eastern seaboard of Thailand”, Suzuki said.

However, the Japanese business community in Cambodia has at times faced challenges to operating in the country.

“Actually, sometimes uncertainty might cause trouble for Japanese companies,” Masashi Kono, secretary general of the Japanese Business Association in Cambodia and chief representative of the Japanese External Trade Organization, told the Post last week.

Kono cited a 10 per cent “special tax” imposed on certain imported materials which the government announced last August.

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