How to attract and satisfy
Japanese manufacturers
from Phnom Penh SEZ experience
Phnom Penh SEZ Co., Ltd.
Hiroshi UEMATSU
CEO25 October 2015
8th Policy Dialogue Mission
Addis Ababa, Federal Democratic Republic of Ethiopia

Cambodia was once
totally devastated by
Khmer Rouge (extremecommunist) from 1975
to 1979.
2

After UN Transitional Authority
period, Cambodia adopted openeconomy policy.
. No discrimination to FDI except
land ownership. 100% owned FDI is allowed inalmost all sectors. Dollarized economy. No restriction to remit abroad3

Cambodia had to heavily rely on FDIto reconstruct country because mostof intellectuals were killed.
Political stability was attained in2000s.

4SEZ policy introduced in 2005 is oneof the tools to boost economicdevelopment.

Phnom Penh SEZ is run by a privatecompany, owned by 78% Cambodian
individual and 22% Japanese company,established in 2006.
Our mission is to attract new
industries to Cambodia for thecountry’s industrialization.

5To achieve this mission, we target
Japanese manufacturers.

Stage 1 (2006 ‐ 2008)

Prepare good infrastructure. Electricity. Water. Telecommunication. Logistics. Security
6

We must prove good infrastructure by data
. Electricity – Capacity, frequency of power cut andfluctuation. Water – Quality and quantity. Logistics ‐ Price and speed. Telecommunication ‐ Price and speed

7

Stage 2 (2007 ‐ 2010)
Improve company’s operation tointernational standard. Proper tax declaration. Audited Financial Statement. Obtain ISO 9000 (quality) and 14000(environment). Train Cambodian staff abroad by Japanese
government funded program. Enhance customer first mind
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Stage 3 (2008 ‐ 2013)
Attract Japanese manufacturers bygetting support from JICA, JETRO

9

Step 1 Tiger Wing, a SME shoe maker
Prepare a rental factory to accommodate apioneer
Step 2 Ajinomoto, a food giant
Accommodate a well‐known company to getattraction from other companies.
Step 3 Minebea, a precision parts maker andDenso, an automobile parts maker
Give a more confidence to other companies

Business model of our Cambodian plant
We plan to build a new business model, in which our Cambodian and Thai operations areintegrated together.
Motor parts are manufactured in Thailand and exported to Cambodia. The finished products
are assembled in Cambodia and re‐exported back to Thailand.
We are confident that other foreign investors should follow this business model if wedemonstrate that our operation is viable.

parts production
Management support,
Technical support,
Personnel dispatch,
Training

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Technical support,
Training

Smooth traffic& commerce
are required.

final assembly11Comparison between Ethiopia and Cambodia on
Investment Environment
Ethiopia
Economic openness
to FDI12✔

Tax incentive policy✔

Transparency ofpublic service✔

Labor costcompetitiveness
Geographic location
Living condition forexpats

Cambodia✔
✔
✔

Now, how can we set target toattract Japanese manufacturers toEthiopia?
Export light industry
Producers for Japan market by air fright
Producers for EU and USA market
Domestic industry
Producers of basic commodities
What is the restriction for domestic market?
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Thank you very much for your attention
For inquiry, please contact
uematsu@ppsez.com
Visit our website: www.ppsez.com
Facebook: Phnom Penh SEZ