T HE Eastern Steel Industry Corporation (ESI) has formally opened its $2 million factory - which can meet all Cambodia's needs for corrugated steel sheet.

ESI Vice President Fujie Shuji says the factory is the only one in the industrial sector in Cambodia and believes it will prove an important watershed for whether the country can attract more investors into the sector.

First Prime Minister Prince Norodom Ranariddh, his wife Princess Marie and Tourism Minister Veng Sereyvuth attended an opening party on Aug 24 and Industry Minister Pou Southirak was guest of honor at an inauguration ceremony the following day.

"Prince Ranariddh promised to help as much as possible, he will support our factory," said Fujie.

"This is the first joint venture of its type. If we can succeed other investors will follow."

ESI is a consortium of five investors. Cambodian entrepreneur Kong Triv holds 32.5 percent and is president and Japan's giant Sumitomo Corporation holds 27.5 percent - Fuji also holds the position of Sumitomo general manager in Phnom Penh. The other investors are Japan International Development Organization with 20 percent, Thai businessman Maris Wongvanapat with 15 percent and Indonesian Benua Chandra with 5 percent. Maris is involved in the timber industry in Thailand and became aware of the ESI project through being a Sumitomo customer.

The factory has been in production since January and is currently producing 600 tonnes of corrugated and flat steel sheet per month, working towards maximum production capacity of 1,000 tonnes per month. According to Fujie that matches exactly Cambodia's monthly needs for sheet steel.

The product is sold to 100 wholesalers, who then retail it for $2-3 per sheet and is mainly used for roofing and fencing.

The factory, just south of the Monivong Bridge turnoff on Norodom Boulevard took a year to complete through 1993, though building was halted for several months during the elections due to politcal uncertainties.

However, commenting on the current political climate in which to do business, Fujie said: "Now everything is OK."

He said he is keen for Premier Ranariddh to ensure that ESI gains maximum benefit from the new investment law, which provides tax holidays to investors and removes duty on raw materials imported for production.

ESI imports all its steel from Japan and its other major raw material, zinc from Japan, China or Singapore.

The production machinery is not new but up to 25 years old. It was originally made in Japan, used in Indonesia and has undergone a complete overhaul before being installed at ESI.