Japan's Sumi Wiring Systems Co Ltd launched
production of automobile wiring this month, a company official said yesterday.
Japanese
companies such as Sumi and Minebea, a ball-bearings maker, have helped
Cambodia’s manufacturing industry diversify away from garments, the country’s
main manufacturing product and export, and Prime Minister Hun Sen seems intent
on continuing to attract higher-end investment from the East Asian nation.
During
talks with Japanese Prime Minister Yohishiko Noda last weekend in Tokyo, Hun
Sen pledged to upgrade Cambodia’s business environment to attract more Japanese
investment, Kyodo News Agency reported.
While
industry insiders said there were already many incentives for Japanese
companies in place, more clarity surrounding the country’s business regulation,
as well as better transportation between countries, would be needed to see a
continued increase in Japanese investment.
“So
far, there are no big issues between Japan and Cambodia on law and regulation.
But regulations are very new in Cambodia and many Japanese companies don’t get
lots of information about them,” Suzuki Hiroshi, CEO and chief economist at the
Business Research Institute for Cambodia, said yesterday by phone.
Better
communication between governments on customs regulations could help boost
trade, he said.
Companies
such as Minebea are reliant on transportation routes between Cambodia and
Thailand, Suzuki Hiroshi said.
The
company ships in parts from Thailand to be assembled and then ships them back.
Heightening
connectivity between the countries could get regional investors looking toward
the Kingdom, he said.
Tax-
and duty-free treatment, as well as cheap labour were the main factors that
brought Sumi to Cambodia, the company’s general manager Kenichi Onogi told the
Post yesterday.
Transportation
at the Phnom Penh Special Economic Zone was another important factor, he said.
A
widely acknowledged skill shortage still affects Cambodia.
The
Asian Development Bank’s annual report on the country pinpointed problems
companies face in finding competent labour.
ADB’s
senior country economist said this month that, although Cambodia has managed to
attract companies such as Minebea, a continued skill shortage would stop
similar companies from investing in the future.
Japan
invested about US$6.2 million in fixed assets in Cambodia in 2011, according to
data from the Cambodian Investment Board, or about 0.09 per cent of total
foreign direct investment last year.
Don
Weinland
The
Phnom Penh Post
Business & Investment Opportunities
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