After more than three years of operating in Cambodia, Minebea, one of the largest Japanese electronics makers, has become very successful. Yasuyuki Inoue, vice president of Minibea Cambodia, sat down to talk to the Post’s business editor, May Kunmakara, about the factory.
When did you start the factory here? Why did you decide to invest in Cambodia?
Actually, we started operating in Cambodia in 2011, starting with 300 employees in a temporary motor factory in the Phnom Penh Special Economic Zone. Now, as of the end of last month, we have 6,500 employees here working with different types of motor assembly and also working on the backlight for smartphones. We already had several factories before the one in Cambodia; our manufacturing site in Thailand, which employs around 33,000, and we also had factories in Malaysia, Singapore and China.
However, the salaries of our employees in those countries were much more expensive than what we had anticipated – that’s why we decided to look for a country with a cheaper workforce. So, we did the feasibility study in the year 2000 and then we decided to open a factory Cambodia in after we concluded that it met our needs.
Your factory is quite new in Cambodia, how do you find the human resources here?
Well, the skill of our employees is quite good – let’s say after their first three to six months, their productivity compared to other factories is similar or sometimes even better. They are skillful and have great ability.
Where are your products exported to?
We are shipping to our customers all over the world through our logistics centre in Thailand. That’s why we ship our products back to Thailand, then subsequently ship them to their destination.
Where do you import the raw materials from?
Actually, our components are coming from our other factories in Thailand, Malaysia and China. We would like to make the components here, however we also have difficulties because in order to make the components, we need machinery and the machinery needs electricity. Here in Cambodia, the electricity is too expensive, so that’s why for us it is much more convenient to get the parts from our other factories to assemble here and then ship back to Thailand.
Right now, there are strikes over the minimum wage with many garment factories. Are the strikes affecting you?
Of course, we are also facing a problem with the minimum wage. However, we believe we are treating our employees as part of our family; they have their own dormitory and we also provide transportation from Phnom Penh to our factory. Our minimum wage is $100 per month as we follow GMAC’s regulation.
Has the political deadlock affected your operations?
Actually, more than 90 per cent of our employees come from the provinces – not the city of Phnom Penh – so because of the confusion in some areas, their families call them and tell them Phnom Penh is dangerous, come back to the provinces. So, at the time, they quit their job here and went back home – more than 20 per cent left. But, the situation has improved recently. Now we have increased our employee numbers to more than 2,000 within seven weeks. But, of course, after the election, we also had the problem with the minimum wage demonstrations. Now, however, it seems to be very calm. Some employees also bring their family or friends to work here.
What is your business plan for this year and the coming years?
We’re going to be more stable than last year. Our business is expanding more rapidly than we expected because of good workers – they have good intentions and great passion for our business in Cambodia. We’re also aiming to expand as a pioneer of the industry. We have very good support from the Cambodian people. So we are now expanding. We believe that we are going to achieve our target for this year as well.