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1

Presented by

Suon SophalDirector of Public Relations and Promotion of Private Investment

Council for the Development of Cambodia

Leveraging Industrial Development for Sustainable Investment in Cambodia

25 September 2018

ក្រុមក្រឹរាអភិវឌ្ឍន៍រមពុជាCouncil for the Development of Cambodia

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Table Contents2

Investment Performance

Leveraging Industrial Linkage

Embracing Partnership for Growth

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1. Investment Performance3

4

17

112

204

559

562

565

889

1,034

1,126

1,521

1,913

2,888

8,839

18,499

0 5,000 10,000 15,000 20,000

Indonesia

Brunei

India

U.S.A

Taiwan

Thailand

Malaysia

Singapore

Hong Kong

Japan

Viet Nam

Korea

U.K

China

Cambodia

0

0

1

2

7

9

9

17

35

41

43

58

489

2,430

4.6

40

0

0

0

248

23

14

15.8

260

34

1.3

568

1079

India

U.K

Netherland

Australia

U.S.A

Singapore

Korea

Taiwan

Thailand

Malaysia

Hong Kong

Japan

Cambodia

China

1st half 2018 1st half 2017

Approval Basis 1st half of 2017 and 2018 Approval Basis (2009 – 1st half 2018)

Increased 42.21%

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1.2. Investment Trends4

270

86

673

453.7

187

128

114.6

283.3

495

171.9

6,039

2,944

7,312

2,512

4,775

3,805

4,529

3,326

5,085

3,082

6,309

3,030

7,985

2,966

4,962

3,933

4,644

3,610

5,580

3,253

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

1st half 2018

Approved investment (2009-1st half 2018)

Total Investment Non-SEZ Investment SEZ Investment

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1.3. Total Investment by sector5

4.90

8.30

18.10

33.50

40.43

44.56

53.96

166.26

518.65

633.10

1,381.45

1,578.20

2,001.96

2,021.11

2,199.76

2,747.10

4,543.50

8,700.00

0 4000 8000

Fisheries

Engineering

Water supply

Health services

Agricultrue

Plantation

Animal farming

Construction

Shopping mall

Rice mill

Telecommunication

Rubber

Tourism centre

Transportation

Hotel

Agro-industry

Infrastructure

Tourism related activities

2.30

4.50

5.15

9.20

9.60

11.26

11.45

11.60

11.79

15.78

17.30

17.40

25.75

32.60

34.39

40.30

51.00

54.20

55.80

57.10

67.96

103.10

124.96

130.10

132.10

205.14

226.40

246.50

297.30

581.90

661.80

2,080.60

2,575.00

4,550.00

0 1000 2000 3000 4000 5000

Bicycle

Medical instrument

Petroleum

Chemical

Toy

Medical chemical

Motor assembly

Household goods

Car assembly

Mechanic assembly

Medical supplies

Leather processing

Textile

Sock

Glove

Plastic

Paper

Packaging

Animal meal

Tobacco

Wood processing

Metal

Drinking water

Electronics

Fertilizer

Food processing

Bag

Building material

Mining

Cement

Shoes

Energy

Garment

Other industries

Appro

val B

asis

(2009

-1sthalf 2

018)

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2. Leveraging Industrial Development/Clusters6

Encourage investment Activities guided by Industrial Development Policy 2015-2025

News Industries• Electronic assembly• Natural resources

processing• High value added

garment products• Industrial Equipment

assembly

Supporting Industries• SMEs supporting industries• Light manufacturing• Construction materials• Food and beverage• Packaging equipment for

export• Transport and logistic

Agro-Industrial• For export and

domestic market

Other Sectors• Tourism sector• HRD• ICT• Energy Development• Furniture

Manufacturing• Traditional Handicraft

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7•Poi Pet O'Neang SEZ

•Sanco Poi Pet SEZ• (Toyota Tsusho’s Techno Park)•Poi Pet PPSEZ (work in progress)

•Sihanoukville SEZ•Sihanoukville Port SEZ•Sihanoukville SEZ 1

•H.K.T SEZ

•Neang Kok Koh Kong SEZ

•Phnom Penh SEZ

•Manhattan Svay Rieng SEZ•Tai Seng Bavet SEZ•Dragon King Bavet SEZ

•Shandong Sunshell SvayRieng SEZ•Hi-Park SEZ

•Kampot SEZ

•Kerry Worldbridge SEZ

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8

Garment, Footwear, Bag,

36%

Packaging & Plastic, 31%

Auto & Electronics, 18%

Others, 15%

China29%

Japan28%

Taiwan11%

Singapore10%

USA9%

Thailand6%

Others7%

Total investment៖ approx. 2.4 billion USD (99% FDI)

2.2. Investment in SEZs

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9

Pop: 616,232Adult: 56% (age 18-60)

SCHOOL Student

262 Primary 71,823

55 Secondary 12,513

19 High 20,833

2.3. SVAY RIENGSpecial Economic Zones1. Manhattan Svay Rieng SEZ2. Tai Seng Bavet SEZ3. Dragon King Bavet SEZ4. Shandong Sunshell SEZ5. Hi-Park SEZ

Total Investment Projects: 70Total Investment Capital: Approx. USD 317 Million Total employment: 42,000

Investment Activities:

University: 1

Student: 3,210

- Computer Services: 46

- Auto Mechanic: 5

- Auto Repair: 20 Electrical: 166

- IT: 65 English: 85

- Animal Science: 20 Others…

- Public Admin. 760 Banking: 733

- Management: 597 Accounting: 532

- English: 217 Marketing: 108

- Computer Science:176 Agriculture: 85

- Rural Development:80 Math: 57

- Animal Science: 34

TVET: 1 Student: 479

Garment and

Footwear42%

Furniture 23%

Bicycle Assembly

9%

Watch5%

Packaging5%

Electronic and

Electrical6%

Others10%

0.09%

0.43%

0.61%

1.21%

11.86%

23.68%

26.55%

35.57%

Hungary

Hong Kong

US

Vietnam

Singapore

China

Japan

Taiwan

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10

Cai Mep Port

166 KM3h:20min drive

90 KM2h:40min drive

BAVET

❖ Key projects in development

▪ Completed Feasibility Study on Phnom Penh – Bavet

Expressway

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Pop: 747,402

M: 49% F: 51%Young: 31% (age 15-35)

SCHOOL Student

408 Primary 92,718

54 Secondary 12,364

26 High 21,414

2.4. BANTEAY MEANCHEY

Special Economic Zones1. Sanco Poi Pet SEZ

(Toyota Tsusho’s Techo Park)2. Poi Pet O’Neang SEZ3. Poi Pet PPSEZ (work in progress)

Total Investment Projects: 14Total Investment Capital: Approx. USD 76 Million Total employment: 2,408

Investment Activities:

University: 4

Student: 4,142

- Computer Services: 35

- Water System

Installation: 30

- Electrical: 89 IT: 5

- Civil Engineering: 4 Auto Repair: 7

- Aircon. Repair: 16 Others…

- Management: 762 IT: 45

- Banking: 661 English: 235

- Marketing: 185 Law: 273

- Accounting: 150 Others…

TVET: 1 Student: 266Auto Parts Assembly

30%

Steel1%

Electronic Equipment

62%

Jewelry Processing

& Box2%

Garment6%

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12

Laem Chabang Port

295 KM4h:40min drive

388 KM7h:40min drive

BANTEAY MEANCHEY

❖ Key projects in development▪ New border crossing at Stung Bot (Poi Pet)-Ban Nong Ian (Aranyaprathet) to be constructed through

a signed Agreement between the Royal Government of Cambodia and the Government of the Kingdom of Thailand on the Construction of the new Border Crossing at Stung Bot-Ban Nong Ian.

▪ Widening National Road No. 5 to four lanes from the current two, projected to be completed by 2021.▪ Renovating the Northern Railway Line (Phnom Penh – Poi Pet) connecting with Thailand.

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13

2.5. SIHANOUK PROVINCE

Special Economic Zones1. Sihanoukville SEZ2. Sihanoukville Port SEZ3. Sihanoukville SEZ 14. H.K.T SEZ

Total Investment Projects: 97Total Investment Capital: Approx. USD 1.3 Billion Total employment: 19,312

Transforming Sihanouk Province into Multi-Purposed

Special Economic Zone

Investment Activities:

▪ Phnom Penh to Sihanouk Province: 230 km

▪ Cambodia’s industrial heartland and gateway to the world

▪ Cambodia’s deep sea port

▪ Multi-modal transportation: Road, rail, port, and airport

▪ Multi-Purposed Special Economic Zone, following Special Administrative Region (IDP 2015-2025)

Energy78%

Others5%

Auto parts1%

Bags and leathers3%

Steels and construction materials

7%

Electronics and machinery

1%

Garment and footwear

3%Packaging

2%

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14

Sihanoukville Autonomous Port

230 KM4h:00min drive

SIHANOUK PROVINCE

❖ Key projects in development▪ National Road 4 upgrading and widening (2018-2022)▪ Phnom Penh-Sihanouk Expressway Development Project (2018-2022)▪ Sihanoukville Port Capacity Enhancement Project, Vessel Trafficking

Management Information System, Sihanoukville Port Service Improvement Project (2018-2019)

▪ Southern line/Sihanoukville Port Access Railway Improvement Project (2020-2022)

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15 3. Embracing Partnership for Growth• Government encourages NGOs, private sector, and civil society

to be involved for infrastructure development and service delivery through partnership and participation.

• Private sector engaged in infrastructure development and provided public services, i.e. ✓ Energy (6 hydropower-BOT), ✓ Airport (3 concession projects)✓ Operation and Maintenance (Railway, Oil terminal & Dry port)

✓ Small rural water supply distribution (16 projects)

• Governing principle of PPP adopted transparency, accountability, Participation, Equity and Empowerment, Competition, and Contestability.

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3.1. IDP Guidance: Way Forward16

Legal Framework Facilitation Promotion

• New Investment Law (Pioneer, targeted SMEs, welfare benefit etc.)

• Special Economic Zone Law (streamlined administrative procedures)

• Formulating new supporting regulations & Further negotiation BITs and Regional

• Enhanced One-Stop Services,

• Online Registration (Master list, Certificate of Compliance),

• Improved Aftercare Services,

• More Country Desks

• Consider formulating strategy to promote targeted investment (industries and investors) to harness the benefits of China+1, Thai+1, Viet Nam+1 …

• Establishing industrial zones in targeted provinces with expectation to develop industrial clusters and industrial parks for SMEs

Attract foreign direct investments and domestic investments, and small and medium enterprises (SMEs) in all sectors, especially new emerging industries such as electronics, spare parts, and food processing to diversify industries, transfer technology and create value added and jobs, occupation, and income

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3.2. Strategic Objectives and Policy Priorities17

❖ Continue investing in physical infrastructure, implement relatedmeasures to reduce cost of transportation, electricity, and promote theestablishment of vocational and technical training program whichrespond to the market demand.

❖ Enhance conducive environment for investment and business bycontinuing improvement and implement single window mechanism andremove informal fee to become efficient and attractive tools forinvestments.

❖ Expand openness approach for private sector development and attractinvestments to expand the international market corridor.

❖ Develop good corporate governance and investment law, and concernedlegal measures aimed at providing incentives aligned with the goalswhich respond to the long term development recommendations.

❖ Enhance corporate social and environmental responsibility in varioussocial activities

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Thank youSuon SophalDirector of Public Relations and Promotion of Private InvestmentCouncil for the Development of Cambodia Email: sophalsuon@online.com.kh