Weekly news round up 2016/ Week 5
Political (Cambodia-Specific)
- Sector unsure over construction law implementation 04-02-16
The drafting of Cambodia’s Construction law should soon be complete and the Ministry of Land Management, Urban Planning, and Construction (MLMPUPC) hope to have it in effect by the end of the year after approval by the National Assembly. Dr. Sok Siphana, advisor to the government, commented that “When the law comes out, we will have a ready set of formulas to regulate and check the quality of the building practitioner.”
There remains some doubt within the private sector over the Ministry having sufficient human resources to enforce the Law, and question marks over how the private sector can be adequately informed of proper real estate valuation practices and unified building codes. There will also be a need for education of the private sector about the Law so that construction workers, contractors, and developers who have previously been following unsafe practices can transition into a state of compliance.
Europe, European Businesses, EuroCham Members
- Election-focused NGOs Get Big Slice of EU Grants 31-01-16
The majority of an 8.9m USD grants fund from the European Union has been dedicated to NGOs focused on increasing the openness and inclusivity of Cambodia’s electoral system. Fiona Ramsey, Head of Cooperation for the Delegation of the European Union, explained that one of the priority criteria was organizations that would support either domestic monitoring or domestic observation of the election process or prepare voter education. This year’s grant recipients provide services ranging from helping disabled people register to vote to translating indigenous language. Both local and international groups are on the list, bringing the total number of organizations supported by the EU in Cambodia to 70.
- SEZ Taking Solar Power Step 04-02-16
Phnom Penh Special Economic Zone (PPSEZ), a EuroCham member, has reached an agreement with Singapore-based Clean tech Solar Corporation to install a new solar panel system to provide clean energy to the SEZ and its customers.
Installation will initially be on the administration buildings to showcase the benefits that solar panels can provide. Stephen Evans, owner representative of PPSEZ, said: “Phnom Penh SEZ is committed to being a socially responsible company and is always looking for ways to save tenants money. As a result, we’ve naturally explored the feasibility of installing solar panels in the zone.”
PPSEZ plans to issue about 20 percent of its total shares on the bourse this year to raise funds for expansion.
Infrastructure, Development and Core Industries
- Footwear Kicks In as Factory Exports Surge 17 Percent 01-02-16
Cambodian exports (of all products) increased 17% in 2015 to 7.1bn USD.
A significant factor in this rise was an increase in the number of garment and footwear factories driven largely by a shift by Chinese manufacturers in labor-intensive industries towards cheaper options in Southeast Asia. According to GMAC, garments exports rose by 14% to over $6bn whilst footwear exports surged by 20% to $529m. Vietnam’s inclusion in the Trans-Pacific Partnership and it’s free trade agreement with the EU is expected to have a negative impact on the Cambodian garments sector in future, though probably not for at least three years. Increases to the minimum wage and an appreciating US dollar are other major risks to the sector.
According to a Ministry of Industry report, there are in total 1,450 industrial and handicraft factories in Cambodia, with garment, footwear and bag factories accounting for the lion’s share – 1,007. The report put the number of food, beverage and cigarette factories at 120, paper and paper-production factories at 38, and chemical, rubber and plastic factories at 101. Handicraft, garment, shoe and bag factors generate about 754,000 jobs, while total employment at industrial and handicraft factories rose to almost 860,000 jobs.
- AEC Not So Sweet a Deal: Sugar Exporter 01-02-16
One of Cambodia’s major sugar producers has complained that Cambodian exports to Vietnam and Thailand have been ‘blocked’ by quotas and subject to import duties against the spirit of the single market promised by the ASEAN Economic Community.
The complaint is representative of the ongoing challenges of AEC, with existing ASEAN frameworks needing to be deepened and each ASEAN member further liberalizing its economy before the regional free-trade zone becomes a reality.
- Giant sugar mill set to open in Preah Vihear 04-02-16
Rui Feng (Cambodia) International Co Ltd, a Chinese-owned agricultural company, will in March inaugurate a $360m sugar mill in Preah Vihear province in what will be one of Asia’s largest sugar processing facilities. The mill will be able to process 20,000 tonnes of sugarcane per day to produce 2,000 tonnes of refined sugar. The mill will initially create 1000 jobs though this could increase to 4000. Production is mainly intended for export to the European Union though also to China and India.
Rui Feng and four sister companies (Lan Feng, Heng You, Heng Rui and Heng Nong )are understood to have major investment plans in the province of up to $1.5bn, including a power plant, fertiliser factory and other infrastructure such as a hospital and school.
The government granted RuiFenga 8841-hectare ELC in 2011 for the cultivation of sugarcane, rubber and acacia. The total land area was subsequently trimmed by about 1,000 hectares in an effort to settle disputes with those living on the land.
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