Logo of Phnom Penh Post newspaper Phnom Penh Post - SVI to lay groundwork on electronics plant

SVI to lay groundwork on electronics plant

SVI to lay groundwork on electronics plant

A Cambodian subsidiary of Thai electronics manufacturing services company SVI Plc is moving closer to commencing construction on a factory on the outskirts of Phnom Penh that will manufacture electronics equipment for export to the US and Europe, a company representative said yesterday.

SVI (AEC) Co Ltd will construct the 6,000-square-metre electronics component plant in Phnom Penh SEZ. The company signed a 50-year lease for a 67,000-square-metre plot in the industrial park in July 2015.

“We will start with one factory, but there is room for two or three more,” said Phichet Kanogsirima, senior director of materials management at SVI Plc. “We still have big room for expansion.”

He said the Cambodian government recently approved the lease certificates, however the company’s board of directors has still not signed off on the construction budget or timeline.

SVI Plc provides electronics manufacturing services to original equipment manufacturers (OEMs) through its factories in Thailand and Europe.

The SET-listed company reported 8.1 billion baht ($228 million) consolidated revenue in 2015, a marginal decline from the previous year due to a fire at one of the company’s facilities in Thailand in November 2014 that disrupted production.

In January, SVI (Austria) GbmH, a subsidiary of SVI Plc, acquired European rival Seidel Electronics Group for an undisclosed amount. The buy-out gave SVI access to Seidel’s design and manufacturing facilities in Austria and Eastern Europe, and improved its logistics platform.

Robert Sawyer, vice president of business development for SVI (Austria) GmbH, said the company is already beginning to realise the synergies of the acquisition.

“We already have several major European customers who have been having SVI produce for them in Thailand for years who have launched new products starting up production in our new Eastern European factories,” he said.

“In the other direction, we have several of the biggest former Seidel customers who have already audited our Thailand site and approved it for production for their Asian demand, and some of those are keenly interested in our coming Cambodian location, in particular for high-volume mechatronic assembly.”

Sawyer said one of the key factors for customers interested in the Cambodia facility was its eligibility under the Generalised System of Preferences (GSP) for products destined for the US market, especially now that the Trans-Pacific Partnership (TPP) treaty is in doubt.

“While Thailand was not party to TPP, Malaysia and several other ASEAN [competitors] were, so this is a good development for Cambodia as a strategic location from which to serve the US,” he said.

Analysts from Bangkok-based Bualuang Securities Plc said in an investor note issued in June that SVI’s new factory in Cambodia would benefit from low-cost labour and trade preferences, including duty-free access to the US market under the GSP.

“Operating profit margin should be higher than that of Thailand,” they said, adding that the factory’s completion was expected to push SVI’s performance into a “high-growth mode”.

An earlier version of this article incorrectly said that local authorities had approved the factory's construction. SVI representatives said, in fact, only that the land lease certificates had been approved.

MOST VIEWED

  • Locations shut, dozens more Covid-19 positive

    The Ministry of Health has closed 23 locations in connection with the February 20 community transmission of Covid-19 and summoned for testing anyone who had direct contact with affected people and places. The number of discovered related infections has risen to 76, including 39 women. In a press release,

  • Kingdom's Covid cluster cases jump to 194

    The Ministry of Health on February 25 confirmed 65 new cases of Covid-19, with 58 linked to the February 20 community transmission. The latest cluster cases include nine Vietnamese nationals, five Cambodians, one each from Korea, Singapore and Japan, with the rest being Chinese. This brings the total number

  • Cambodia's Covid cluster cases rise to 137

    The Ministry of Health on February 24 recorded 40 more cases of Covid-19, with 38 linked to the February 20 community transmission. Of the 40, two are imported cases involving Chinese passengers. The 38 include two Vietnamese nationals and one Cambodian, with the rest being Chinese. This brings the total cases

  • Covid cluster raises alarm, health bodies urge vigilance

    The Ministry of Health and the World Health Organisation (WHO) in Cambodia have expressed great concern over the February 20 cluster transmission of Covid-19 in the community. Both entities appealed for vigilance and cooperation in curbing further spread of the virus. Ministry spokeswoman Or Vandine said

  • PM confirms third Covid-19 community transmission

    Prime Minister Hun Sen on February 20 announced the Kingdom's third outbreak of Covid-19 community transmission after 32 people tested positive in just over 10 hours. Addressing the public from his residence after an emergency meeting, Hun Sen said: "I dub it February 20 Community Event, in which 32 cases

  • Cambodia to make auto-rickshaws

    Locally-assembled electric auto-rickshaws could hit the Cambodian market as soon as early in May after the Council for the Development of Cambodia (CDC) gave the greenlight to an investment project at the weekend. According to a CDC press release, it will issue a final registration