YU Jeoung-yeol, president of the Korea Trade Investment Promotion Agency (KOTRA), said he is encouraging more investors to do business in Cambodia, especially in the field of vehicle spare-parts.
At a recent meeting in Seoul with a Cambodian delegation led by Minister of Commerce Pan Sorasak, Yu expressed his firm belief that the Cambodia-Korea Free Trade Agreement (CKFTA) will boost trade between the two countries.
“Currently, more than 200 South Korean companies invest in Cambodia, and we are working to attract more, especially in auto or vehicle parts as well as timber products,” Yu said.
Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia (CDC) who accompanied the minister, praised South Korean investors and strongly encouraged them to consider investing in Cambodia as part of the regional supply chain.
“Korean investment in Cambodia in the past has not only brought much-needed capital and modern technology, but also a strong spirit to overcome obstacles,” he said.
He added that the Kingdom has a favorable environment that makes it easy for Koreans to invest in the country. There are many potential advantages to such a deal, especially the conditions of the CKFTA – which came into effect on December 1 last year – and investment incentives under the framework of new investment laws, which were introduced in October, 2021.
Tan Monivann, vice-president of the Cambodia Chamber of Commerce, said South Korea is a leading nation in the fields of automotive and electronic technology, especially cars, smartphones and other electronic products.
He added that the call for investment comes at a time when the government is preparing a roadmap for the development of the automotive and electronics sectors, which is expected to increase its capacity exponentially in the coming years.
“South Korea is a strong country in the field of automobiles and electronics, as evidenced by the number of their cars and smartphones that we have imported. Until recently, South Korea was probably the most advanced nation when it came to this technology. Although China has caught up to them and perhaps stepped a little ahead, South Korea remains strong in these areas,” he continued.
The government approved the official roadmap for the development of the automotive and electronics sector in Cambodia on December 9 last year. Through this framework, it hopes to increase the export volume in the automotive sector to about $500 million by 2027 and create 10,000 new jobs in the field.
Japan is currently the major source of investment in the automotive sector in Cambodia, with seven car assembly companies operating in the country. The main export markets for their products are Thailand and Japan.
Cambodia will focus on expanding existing opportunities to expand the production of labour-intensive automotive parts for export. These include, among others, electrical wiring looms, seats and simple electric and electronic parts for motorcycle assembly.