Logo of Phnom Penh Post newspaper Phnom Penh Post - US seeks to produce bicycles in Kingdom, move away from China

US seeks to produce bicycles in Kingdom, move away from China

Content image - Phnom Penh Post
The Kingdom’s exports of bicycles to the US are expected to grow due to US-imposed tariffs on China. Post staff

US seeks to produce bicycles in Kingdom, move away from China

Cambodian exports of bicycles to the US are expected to gain from recent tariffs imposed by the US on China, thanks to several bicycle producers who have unveiled plans to move to the Kingdom, a report from a leading industry portal said.

Bicycle Retailer, the website of Kent International Inc – an American importer and distributor of bicycles and bicycle accessories – plans to move a large share of its production from China to Cambodia in the next few months.

As evidence of this, one of Kent’s major Chinese suppliers is building a new 500,000sq ft (46,452sqm) factory in Cambodia.

Kent CEO Arnold Kamler said the factory will begin shipping bicycles in September next year.

“Assuming the 25 per cent tariff takes effect, the idea is to move essentially all of our production from China to Cambodia,” he said.

After imposing a 10 per cent tariff on Chinese bicycles in September, the tariff is set to increase to 25 per cent in January.

To comply with US Customs’ rules of origin, Kamler said Cambodian parts and labour would make up at least 35 per cent of the value of Kent’s Cambodian bicycles, which will have Cambodia-made frames and forks.

The report said the factory that Kent is working with is in the south, near Phnom Penh.

Besides Kent International, Trek Bicycle Corporation – another US-based bicycle and cycling product manufacturer and distributor – is also reported to have plans to move production of at least 200,000 bicycles from China to Cambodia next year.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said on Monday that the US’ decision to increase the tariff on Chinese products could lead some types of production in China slow down.
This, he said, will eventually negatively affect the export of some raw materials from Cambodia to China.

However, he said Cambodia should gain more than it loses as many factories in China, including those that produce bicycles, plan to relocate their production to the Kingdom where the cost of doing business is cheaper, and from where products can be exported duty-free to many major markets.

“We [CCC] have received more contact from investors abroad to know about Cambodia’s investment potential as they want to open their factories here. When they seek to expand their production, they should find Cambodia more interesting,” he said.

US trade data show that Cambodian bicycle exports accounted for $24 million last year. This placed the Kingdom third behind China and Taiwan which exported $874 million and $390 million worth respectively.

Besides the US market, Cambodia became the largest bicycle supplier to the EU last year when it exported more than 1.42 million bicycles – an increase of nine per cent from 1.29 million bicycles in 2016.
Cambodian made bicycles can be exported duty-free into the EU under the blocs Everything But Arms (EBA) programme.

Despite the tariff advantage and lower labour costs, there are challenges for manufacturing in Cambodia as the Kingdom lacks an industry cluster, which means many components must be imported, making it time-consuming and affecting costs.

MOST VIEWED

  • PM to vet NY holiday dates

    The Ministry of Economy and Finance submitted a letter to Prime Minister Hun Sen asking him to formally set a five-day national holiday from August 17-21 to make up for the Khmer New Year holiday in April that was postponed. Finance minister Aun Pornmoniroth sent

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Kingdom produces PPE gear

    Medical supplies from Cambodia have been donated to member countries of the Asian Development Bank (ADB) to assist in the fight against Covid-19, said an ADB report published on July 9. The report stated that the supplies were donated as a response to global efforts to

  • Kingdom, US vow stronger ties

    At an academic forum on Saturday to celebrate 70 years of Cambodia-US diplomatic ties, Cambodian researchers and officials expressed hope of encouraging US investments and for that country to deepen and improve its bilateral relations. Held at the Royal Academy of Cambodia, it reviewed the past 70

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea