Some 1,500 Japanese companies have registered in Cambodia since JETRO established its Phnom Penh office in 2010.
For nearly a decade since establishing an office in Phnom Penh, the Japan External Trade Organization (JETRO) has been collecting vital investment statistics and playing an active role in bringing new Japanese investment to Cambodia.
Masashi Kono, chief representative of the JETRO Phnom Penh Office, said the office functions as a bridge between Japan and Cambodia. JETRO supports Japanese investors that are considering establishing a presence in the Kingdom by matching them with suitable Cambodian companies and potential partners. It also produces economic reports throughout the year, helping investors understand the local investment climate and how it compares to neighbouring countries to help investors make informed decisions before sinking in capital.
“JETRO collects information on investment, economics, law, finance and all business sectors and we provide that information to potential investors in Japan so as to support their investment,” said Kono.
JETRO Phnom Penh works closely with the Japanese Business Association of Cambodia (JBAC)and Kono is also the secretary-general of JBAC.
“After [Japanese companies] set up a business in Cambodia, JETRO supports them through JBAC,”said Kono.
“We hold many seminars, working groups and meetings, as well as a ‘Government-Private Sector meeting’ twice a year. This meeting is privileged for Japanese [investors] only.”
When JETRO opened in 2010, the numbers of JBAC members were about 50. Today membership has exceeded 250.
According to Kono, about 1,500 Japanese companies have registered in Cambodia between 2010 and 2017.
Labour-intensive industries such as garment and footwear are very attractive for foreign investors. However, the increase in Japanese FDI in Cambodia has played a crucial role in diversifying the Kingdom’s economy, helping to move away from low-level labour-oriented work toward higher-value services and skilled manufacturing.
Many large Japanese investments have been made outside the garments industry. Sunrise Healthcare Service established the first Japanese hospital in Cambodia, with the $35 million facility opening in 2016. Aeon Mall, the country’s largest shopping mall, opened in 2014 with over $200 million invested by its Japanese parent firm and plans for a second mall to open this year. Large Japanese manufacturers, including Minebea, Denso, Sumitomo and Ajinomoto, have already set up factories in Cambodia’s special economic zones.
According to Council for the Development of Cambodia (CDC) figures, Japanese investment in Cambodia over the last 25 years through May 2017 totalled $1.5 billion, with the bulk of it injected after 2010. The increase in investment has accelerated bilateral trade between Cambodia and Japan. In 2010, trade amounted to $366 million; by 2017 it topped $1.61 billion. Of that, Cambodian exports to Japan amounted to $1.26 billion.
While a large portion of Japanese FDI has been directed into Cambodia’s manufacturing and services sectors, Kono said agriculture also offers a number of promising opportunities.
“We consider agriculture as the segment with the most potential,” he said.
Founded in 1958 to promote Japanese exports abroad, the Japan External Trade Organization (JETRO) has partnered with the Japanese government to promote mutual trade and investment between Japan and the rest of the world.