South Korean investors may look further into Cambodia’s food processing and agriculture sectors instead of its technology industry said the Asean-Korea Centre (AKC).
AKC secretary-general Lee Hyuk told The Post on the sidelines of the sixth Asean connectivity forum, held in Seoul last week, that Cambodia was a small country in the region that could not compete with others such as Vietnam and Thailand in technology-based investments.
“I think your country needs to compete with Vietnam and Thailand, for instance, to attract more investment from other countries such as Korea. Food processing, farming and infrastructure building investments are good for Cambodia,” he said.
Lee said Korean companies also regard Cambodia as a potential investment destination.
“In Cambodia, you have Korean companies such as Hyundai which is running a mango farm. Cambodia is a small country, while Vietnam attracts more [companies] like Samsung Electronics [Co Ltd] to set up smartphone companies,” he said.
Korean-based Hyundai Group invested $10 million on a fresh-fruit processing plant on a 3ha plot in Kampong Speu province’s Phnom Sruoch district, which will launch this month.
The company hopes to process 50,000 tonnes of fruits annually, including coconut, durian and mangosteen.
Hyundai Group has 44 branches worldwide and a strong network for the export of Cambodian food products.
Lee said Cambodia needs to prove it has the right strategy in order to attract Korean investors.
“To attract investment you have to [have] more partnerships with Korean companies in investment and trade. If you create a big market of good quality food processing in cooperation with Korean companies, you can export products to Korean consumers,” he said.
Cambodia Chamber of Commerce vice-president Lim Heng said Korean investors are currently more interested in Cambodian agro-business.
“Before, we saw Koreans invest more in real estate, but after [the market] showed [signs of] declining, they turned to agro-business."
“We cannot compete with Thailand and Vietnam in terms of our technology industry yet. We are still small,” Heng said.
He said Cambodia is also looking for Koreans to invest in the machinery industry.
Cambodia is the seventh largest Korean investment destination, valued at $137 million last year, according to a Korean Customs Service report.
The trade volume between Cambodia and Korea reached more than $860 million last year. Cambodian exports to Korea were valued at $261 million while imports topped $603 million, the figures show.
The Presidential Committee on New Southern Policy chairman Kim Hyun-chul said that in terms of opportunity, Cambodia is one of the countries along the Mekong River that Korea will discuss how to expand trade relations with.
“The South Korean government has overseas development assistance and Cambodia is a prominent country. We will discuss how to increase the attraction between Cambodia and Korea,” Kim said.
However, referring to the current presence of Chinese companies in the Kingdom, he said the country should not rely on only one nation.
“If we rely on one country, diversity could be harmed. Korea can promote diversity,” he said adding that next year there will be a Korea-Mekong summit, in which diversity will be discussed with the Cambodian prime minister.