As special economic zones become an increasingly integral part in bringing investment into Cambodia through manufacturing, production and logistics - with exports from these zones set to reach $1.2 billion this year according to government records - infrastructure is becoming a vital component towards their success. Charles Esterhoy, Chief Operations Officer of Kerry WorldBridge Special Economic Zone (KW SEZ), spoke with Post Property about the development of one of the Kingdom’s newest SEZs in Takhmao district of Kandal province. Once completed in mid-2016, he explained the benefits it will bring to the currently underdeveloped area that has seen a recent surge of activity.
When will the Kerry WorldBridge Special Economic Zone be completed?
Our project consists of two main parts, the special economic zone and the free trade zone (customs-bonded warehouse and showrooms) with a shared administrative and government one stop service centre building (OSSC). This is a new concept and the first in Cambodia, which has been conceived in order to give investors full access to the economic advantages and geographical logistical advantages of Cambodia in the Greater Mekong Region (GMR). We will complete and open two of the bonded showrooms by May 2016 as well as the OSSC building. The bonded warehouse will be operational by July 2016. The 42 hectares of SEZ land has already been demined and backfilled to finished road level, so we are essentially ready for investors’ enquiries and reservations now. We have already received interest from overseas investors via Kerry Logistics and WorldBridge networks.
How will it complement the area that it is being built in?
The area we have chosen along National Road 2 has relatively undeveloped infrastructure so we have had to build a more substantial electrical power source as well as water supply, which will ultimately benefit the community. Secondly, the KWB SEZ in itself will foster the creation of many employment and other indirect business opportunities for the surrounding community. And, as investors occupy the SEZ over the next few years, they will not only have a need for factory workers but also will have a large demand for commercial services, such as food and beverage. This will create an even larger need for worker amenities including housing, transportation and services for daily life. Job creation is the obvious outcome of our presence in the area, but we intend to take this one step further and engage the community and workers through active and meaningful CSR activities.
How near in the future do you see this area being suburban or urbanised?
Recently, the Ministry of Land Management, Urban Planning and Construction (MLMUPC) has extended the 2020 Phnom Penh Master Plan to 2035. That plan includes the development of a city “sub centre” near the Takhmao area just east of our SEZ. This development will include the development or extension of a Phnom Penh ring road and certainly will create the need for improved infrastructure. It is also important to remember that better and easily accessed public services need to be planned along with the development of extended cities.
With the near completion of the Hun Sen Boulevard, and the enlarging of major roads such as National Road 2, is this area primed for business expansion?
Hun Sen Boulevard will intersect National Road 2 a few hundred metres from our SEZ entrance which will certainly make access easier and greatly support the express delivery aspect of our business plan. We are more interested in the development of National Road 2 as the promised road will connect to the new Phnom Penh Port and access to National Road 3 and National Road 4 - via the ring road - which will allow for quicker shipping of raw materials and finished goods into and out of Cambodia.
In an industrialising nation where everything involved with infrastructure is a priority, an increase in infrastructure projects inevitably has to occur. Vietnam has experienced this type of growth starting from five years ago and is now seeing the results in growth and stability.
It has previously been mentioned that the SEZ will largely benefit the automotive industry. How about its impact on the garment factory industry, of which there is an influx in the area, especially in the Bati area of Takeo province?
We are first and foremost focused on attracting new and diversified non‐garment industries to Cambodia from overseas. The automotive industry, given its size and the depth of its supply chain, has been the first to realise the actual benefits of using Cambodian facilities to support or expand their overall capacities and we expect that there will be more industries which follow this trend in the next three to five years.
As for our SEZ and the new garment factories in the Bati area, I don’t see any adverse impacts. In fact, there should only be positive outcomes in the form of good opportunities, higher working-condition standards and more attention being paid to upgrading existing or developing new infrastructure in Kandal and Takeo provinces to support their growth.