Logo of Phnom Penh Post newspaper Phnom Penh Post - Slow year for Japanese investment

Slow year for Japanese investment

A construction worker heads to work at the Aeon Mall construction site in Phnom Penh in July
A construction worker heads to work at the Aeon Mall construction site in Phnom Penh in July last year. Vireak Mai

Slow year for Japanese investment

The Japanese embassy is reporting a $280 million drop in Japanese investment last year, but officials were quick to say that the numbers don't necessarily reflect slumping investor confidence in Cambodia.

Japanese investment in the Kingdom reached about $47.5 million in 2013, compared to $328 million in 2012, according to Takayoshi Kuromiya, counselor at the embassy of Japan in Phnom Penh.

Kuromiya said yesterday that the drop was natural after the “exceptionally large” investment amount seen in 2012, which included Phnom Penh’s soon-to-be-completed Aeon Mall on Sothearos Boulevard. Due to open in June, Aeon is valued at $205 million.

Last year, major investments by Japanese companies came in the form of factories that produce eye drops, watch parts and garments, he added.

He said that Cambodia’s competitive labour costs had helped to maintain Japanese interests, while labour in “traditional investment destinations” such as China and Thailand had rapidly increased.

But garment sector wage disputes had companies concerned, and future investment levels were uncertain.

“In light of the current situation, we cannot precisely foresee the future trend of Japanese investment in Cambodia as private companies’ investment decisions depend on various factors, including some unpredictable ones,” he said.

While Japanese funds have fallen, Cambodia’s prime minister announced a 250 per cent increase in Vietnamese investment during an official visit by his Vietnamese counterpart on Monday. At a conference held at the Peace Palace, Prime Minister Hun Sen presented figures showing that Vietnamese investment had reached $302 million in 2013. The increase promises to leave Japan even further down the list of Cambodia’s top investors.

Statistics presented by the Council for Development of Cambodia during a December 2 and 3 seminar with Japanese investors showed that between 1994 and October this year, Cambodia approved Japanese foreign investments of $593 million. Nearly half of that came in 2012 alone.

That figure, however, placed Japan in 11th position on the list of Cambodia’s top foreign spenders, behind South Korea, the European Union, the United States, Vietnam and Thailand. China led the way with more than $9.5 billion invested in Cambodia between 1994 and October 2013.

Aeon Mall, which is still being built over 68,000 square metres next to the Sofitel, is attracting additional Japanese money, according to the mall's managing director, Makoto Yajima.

On track for its opening, the mall will house about 190 brands, including Nojima, a Japanese home appliances store, and Thai-owned cinema operator Major Cineplex. It also boasts a 10-lane bowling alley.
“We aim to attract 10 million visitors in the first year,” Yajima said.

MOST VIEWED

  • Phnom Penh authorities ban march for Human Rights Day

    Phnom Penh authorities have banned a planned march as local NGOs and workers’ unions gear up to celebrate the 70th anniversary of the signing of the Universal Declaration of Human Rights on Monday, with a youth group leader saying they would march nonetheless. The UN

  • Phnom Penh’s Jet’s Container Night Market shuts down

    The famous Jet’s Container Night Market in central Phnom Penh has shut down due to the high cost of the land rental, company representatives claim. Jet’s Container Night Market is the largest such market in Phnom Penh. It operated for just over two

  • Hun Sen rejects ‘rift’ rumours spread by ‘stupid gangsters’

    Prime Minister Hun Sen on Wednesday denied a “rift” among top leaders of the Cambodian People’s Party (CPP), and rejected claims that Senate president Say Chhum and Interior Minister Sar Kheng were set to be removed from their positions as rumours spread by “gangsters”.

  • EU ambassador to Cambodia: Rights a ‘work in progress’

    The EU ambassador to Cambodia has called human rights “a work in progress” and said the 28-nation bloc has “carefully” noted last week’s statement by the government on taking further steps to strengthen democracy and the political sphere in the Kingdom. The EU marked