Ticon Industrial Connection Plc, a Thai-based factory and warehouse developer, is expanding its operations into fast-growing Southeast Asian economies, including Cambodia, to help offset sluggish growth at home.

Lalitphant Phiriyaphant, the company’s chief financial officer, said Ticon has already invested $20 million into expansion in Indonesia, and will consider further investment there, as well as establishing a foothold in Vietnam.

The company is also planning to launch operations in Cambodia next year, he said.

“In Cambodia, we were approached initially by a customer to custom-build a warehouse and lease it only to that customer,” he said.

Ticon specialises in developing and managing industrial real estate properties. The company and its subsidiaries currently have 51 factories and warehouses with nearly 800 units, covering a total 2.4 million square metres of space under management.

Lalitphant said factory owners were being drawn to Cambodia by its low operating costs and abundant cheap labour, and more recently by the US government’s decision to extend its Generalised System of Preferences (GSP) scheme to include Cambodian travel goods, allowing these products to enter the US market duty-free.

He said Ticon has seen many of its customers relocate or expand into Cambodia under the Thailand +1 strategy, in which Japanese companies that have set up production in Thailand extend parts of their supply chains to neighbouring countries in order to hedge risk and take advantage of their cheaper operating costs.

“Cambodia is closer to Bangkok and Thailand’s eastern seaboard area when compared with Laos, Myanmar and southern Vietnam, which makes Cambodia very competitive at substituting Thailand’s manufacturing of labour-intensive products,” he said.

WHA Corporation, a rival Thai warehouse developer, has also announced plans to extend its footprint into Cambodia as part of a regional expansion. The company said in August it would invest $1.2 billion to expand its logistics and warehouse operations in Thailand and Southeast Asia over the coming five years.

WHA currently manages 2.2 million square metres of warehouse space in Thailand.