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Sun continues to rise for Japan investments in the Kingdom

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A worker checks manufactured shoe parts at a Japanese manufacturing plant in the Phnom Penh Special Economic Zone in 2014. Hong Menea

Sun continues to rise for Japan investments in the Kingdom

The number of Japanese firms registered with the Japanese Business Association of Cambodia (JBAC) has nearly tripled within the last seven years, according to a recent report.

Companies from the Asian nation began entering the Cambodian market in 2011 with a few large investment projects in the manufacturing sector. That year JBAC counted 100 members.

The group’s year-end report for 2017, which was published in June, said it had 254 members and had seen investments spread through the commerce and services industries.

JBAC reportedly expects Japanese investment to continue growing in the Kingdom, especially since the government has been looking fondly on foreign direct investment (FDI) as a key driver of development.

“There are high expectations for Japanese companies and investment [in Cambodia],” the JBAC report said.

Spotlight turns to Poipet

Alongside increased investments, the number of Japanese living in Cambodia has also grown substantially. While there were 2,000 in the country in 2014, that figure saw a 50 per cent jump to 3,000 as of 2016.

Japanese investments in Cambodia totalled $1.66 billion over the last 25 years, according to figures from the Council for the Development of Cambodia (CDC). Of that sum, most came in after 2010.

The Supreme National Economic Council’s senior adviser, Mey Kalyan, said on Monday that the inflow of Japanese investment to Cambodia will see positive growth, but policymakers and relevant officials should put a higher priority on attracting Japanese manufacturers.

According to Kalyan, manufacturing is pivotal to speed up economic growth. However, the number of Japanese manufacturers in the Kingdom has stagnated.

“It is good to see increasing Japanese investment, but the number of manufacturing projects is still small and less than our expectations,” he said.

However, Kalyan was optimistic about the increasing number of Japanese manufacturers in Poipet as Japanese firms working in Thailand are showing interest in expanding to the border city.

“Investors coming directly from Japan are no longer a strong channel, but there is potential for Cambodia to attract manufacturers that have already invested in Thailand, Malaysia or China,” he said.

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