Cambodia eyes to become region’s prominent gems, jewelry market

PHNOM PENH, June 13 (Xinhua) — Cambodia has eyed to become a precious stone and jewelry hub in Southeast Asia region in the near future, Minister of Commerce Cham Prasidh said Thursday.

Speaking at the opening of the 5th international gems and jewelry fair here, the minister said that with the fast growing market of over 14 million populations, Cambodia has emerged as one of the most attractive and fastest growing economies in the region.

“Gems and jewelry industry apart from being one of the key trade promotional areas of Cambodia, it is also an industry playing important roles for tourist attractions,” he said.

“Gems and jewelry fairs have been positioned as the most important sourcing platforms in Cambodia, and the country plans to be the prominent gem and jewelry market supplier in Southeast Asia region in the near future.”

He said with the many tax preferential or tax-free treatments extended to Cambodia as one of the Least Developed Countries by many developed nations including the United States, gems and jewelry traders around the region might move their bases to Cambodia to take advantages of their reduced tariffs on imports.

Besides, he said, Cambodia was admitted as a member of the Kimberley Process on November 30, 2012 in Washington D.C., the United States.

The Kimberley Process (KP) is a joint governments, industry and civil society initiative to stem the flow of conflict diamonds– rough diamonds used by rebel movements to finance wars against legitimate governments. As of November 2012, the KP has 54 participants, representing 80 countries and regions, according to its website.

“As a member of the Kimberley Process, Cambodia will be able to obtain significant advantages to win legal trust in such industry, and be able to attract major investors to establish diamond-cutting factories in Cambodia,” Cham Prasidh said.

He said the gem and jewelry industry would create tens of thousands of jobs for the people, enabling them to acquire specific skills in cutting diamonds, as well as opening Cambodian market to the European Community, the United States and in other countries.

The impoverished country launched its first gem and jewelry laboratory in May last year under the joint venture with the London-based Intertek Company.

The laboratory is a venue to provide quality assurances, product testing, inspection and certification to ensure that all jewelry products sold in Cambodia are of specified quality and standard.

The 4-day fair, opened on Thursday at the Diamond Island Exhibition Center, brought together 78 exhibitors, mostly from Cambodia, Thailand, China’s Hong Kong, and Singapore, Cham Prasidh said.

An exhibitor from Hong Kong said the fair was a good opportunity for his company to seek new customers in Cambodia.

“This is the first time our company displays gem and diamond products here. There are a lot people coming here and they know a lot of jewelry. Hopefully, we can meet some new customers,” Isipro Ibasco, manager of Christelle Limited, told Xinhua.

Local exhibitors said the fair was a chance to promote their shops and also helped the government in promoting gem and jewelry industry.

“My company has joined such event every year, and I hope that the sales this year will be better than that of last year,” San Cheng Hak, manager of Cheng Hak Gems and Diamonds Co., said. “At our shop, all jewelry products are made in Cambodia, but some precious stones and diamonds are imported.”

Advertisements

ThaiBev takes aim at Myanmar

Thai Beverage Plc (ThaiBev) is seeking a greater presence in Myanmar through its partnership with Fraser and Neave Ltd (F&N), the Singaporean firm acquired earlier this year by the Thai drinks giant.

Thapana Sirivadhanabhakdi, ThaiBev’s president and chief executive, said the company is also considering importing Myanmar beer into Thailand, where many migrant workers from Myanmar live.

F&N _ which was taken over by ThaiBev, led by the Thai billionaire Charoen Sirivadhanabhakdi in a deal worth S$13.8 billion (327 billion baht) _ owns a stake in Myanmar Brewery Ltd.

“Myanmar is the rising star of Asean, the one everyone is looking at, and the market there is similar to Thailand’s,” Mr Thapana said on the sidelines of last week’s Asean Economic Community (AEC) seminar in Bangkok hosted by KPMG Thailand.

“With growing income per capita, there’s a huge opportunity for consumer goods and companies such as ThaiBev. We are already a player there and can build on the partnership with F&N.”

He said investment in Myanmar production will have to wait for improved infrastructure such as electricity and water supply.

In the meantime, ThaiBev could bring Myanmar beers to the Thai market.

“We’re looking at opportunities in the Myanmar market as well as the chance of Myanmar products coming here,” said Mr Thapana.

The Myanmar government reportedly is prepared to relax limits on foreign ownership of breweries on a case-by-case basis in a bid to project a friendlier image to foreign investors.

The Myanmar Investment Commission, which oversees foreign investment, in January offered four licences for international breweries to operate domestically.

ThaiBev is one of two brewers _ Denmark’s Carlsberg being the other _ that won approval in February to set up breweries in Myanmar.

ThaiBev is allowed to produce its flagship Chang brand in Yangon, Mandalay and Shan state.

Apart from Singapore, F&N has a presence in Malaysia and Vietnam.

Mr Thapana said F&N products made in Malaysia may suit the Indonesian market better than Thailand due to the many Muslims living there who require halal products.

“ThaiBev is now on a learning curve of expanding business in the region,” he said.

“Asean is a hotspot, with growing gross domestic product. ThaiBev wants to be the leader in Thailand and the region.”

With the single market set to remove barriers, both opportunities and risks will arise.

“If you prepare yourself and are ready for greater competition, the AEC will give you the opportunity. If you are not going out, the competitors will come in anyway,” said Mr Thapana. “Small companies can also survive if they identify and develop their uniqueness.”

Heineken’s arrival could be a double-edged sword

When it starts selling locally produced beer late next year, Heineken could help curb the massive flow of illegally imported brands – including its own – from Thailand and China, but the Dutch giant’s marketing expertise and deep pockets threaten small domestic breweries, local experts said.

Industry analyst U Myint Zaw pointed to the effect Coca Cola and Pepsi had on the domestic soft-drink market, saying sales of popular local brands declined significantly after the American brands arrived.

“Consumers always want to try something new, and international brands have an advantage now because they are new to Myanmar,” he said.

An executive with a leading brewery agreed, saying the arrival of foreign investment in the beer and liquor market could drive small breweries and distilleries out of business. There are more than 10 breweries in Myanmar, but one – Myanmar Beer – controls 80 percent of the market.

“The foreign companies have more money. Although there is a ban on advertising, they can promote their products at bars and they can cut prices to drive others out of business,” said the executive who asked not to be named.

Others disagree with this assessment. Myanmar Investment Commission deputy director Daw San San Myint described Heineken’s arrival as “good for the country”, saying its new brewery will create jobs and reduce illegal imports.

Heineken and Alliance Brewery Company, its joint-venture partner, will spend US$60 million to build their brewery near Yangon, and they expect it to begin operating by the end of next year.

Heineken’s global external communications chief, John Clarke, said per capita beer consumption in Myanmar is about 3 litres a year, compared with 36 in China, 30 in Vietnam, 26 in Thailand and 15 in Cambodia. “There is significant room for growth in the market,” he added.

Jeremy Cunnington, a senior alcoholic-drinks analyst at Euromonitor, said Myanmar’s beer market is prized because it is “one of the last remaining virgin markets for growth”.

“Beer is a highly consolidated category globally and there are very few opportunities to expand and grow. Myanmar is one of those opportunities, both in terms of volume growth, but also eventually in value growth, as consumers will hopefully be able to afford to trade up to more premium products,” he said.

Mr Cunnington was unsurprised that both Carlsberg and Heineken are entering Myanmar’s market because both are “relatively weak in Asia” and “new sources of growth are vital for their own health”.

Both are seeking what he called “the first move advantage”. “In many markets in Asia, but also around the world, there [are] usually only one or possibly two players who dominate the market, giving great opportunities to the winners, but little to those left out,” he added.

U Aung Moe Kyaw’s deal with Heineken marks his first foray into the beer market, where the dominant player is Myanmar Beer, which is 45pc owned by the military-linked Union of Myanmar Economic Holdings, a conglomerate that also owns Myanmar’s third-largest brewing company, Mandalay Beer.

Heineken will own 57pc of the newly formed APB Alliance Brewery Company, through its subsidiary, Asia Pacific Breweries Limited. Carlsberg, the world’s fourth- largest brewer, announced on February 1 that it will build a brewery in Bago Region with Myanmar Golden Star Breweries.

By Su Phyo Win   |   Monday, 27 May 2013

Cambodia launches cassava development project under China, UNDP support

PHNOM PENH, May 21 (Xinhua) — Cambodia launched Tuesday the second phase of cassava development project under the support of China and the United Nations Development Program (UNDP).

Speaking at the launching ceremony, Teng Lao, secretary of state of Cambodian Ministry of Agriculture, said the second phase of the project, which will last until September 2014, was made possible with the funding of 400,000 U.S. dollars from China. “It aims to help a core group of cassava farmers, processors and exporters to meet the quality and quantity requirements to be able to export more processed cassava to China, thus generating more revenue and employment opportunities for Cambodian smallholders in rural areas,”he said.

Cambodia and China signed a Protocol on the Exports of Cambodian Cassava to Chinese Market in December 2010, under which China allowed Cambodia to export its standardized cassava chips to China.

Teng Lao said cassava is the second agricultural crop in Cambodia and plays a very important role in Cambodia’s agriculture and economic development.

He said last year, the country grew cassava crop on an area of 337,440 hectares, producing about 8 million tons of fresh cassava. “About 50 percent of fresh cassava, 40 percent of dry cassava and 10 percent of cassava powder were sold to Vietnam and Thailand, “he said.”And Vietnam and Thailand re-sell those cassava products to international markets, particularly China.”

Agriculture official and project coordinator Ratana Norng said the cassava sector might generate between 200-300 million U.S. dollars worth of”informal”export revenues a year.

Lu Zhouxiang, first secretary at the department of international trade and economic affairs at China’s Ministry of Commerce, said at the event that in the first phase of the project, China had contributed 212,000 U.S. dollars to support 30 Cambodian officials to train in China’s Hainan province on the cassava cultivation techniques in late 2011 and early 2012.

“Based on the successful results of the first phase, the second phase project will help move Cambodian producers, processors and exporters of cassava up the value chain,” she said.”It is our hope that this project will contribute to the Cambodia’ s efforts in capacity building, economic diversification and poverty reduction. ”

Setsuko Yamazaki, country director of UNDP to Cambodia, said that currently, Cambodian cassava farmers, processors and exporters are facing enormous constraints such as price distortions in neighboring countries, lack of information on price and quality criteria of importing markets and lack of access to technology. “Though cassava has become the second largest agricultural crop in term of income, employment, hectares cultivated and exports, there is very little technical assistance support provided to the sector,”she said.

She added that under the project, UNDP would give particular attention to environment sustainability of cassava cultivation, improved standard quality to promote raw and processed cassava exports to China and the ultimate benefits and sustainability for the poor.

Setsuko said Cambodia is now the seventh largest producer of cassava in Asia and projected that the country would move to the fifth largest producer following Thailand, Indonesia, India and China by 2018.

Cambodia’s beauty industry blossoming

The beauty business in the Kingdom is growing rapidly as incomes are rising and the middle-class is growing, industry insiders told the Post yesterday.

In the first three months of this year, the Kingdom imported cosmetic products worth $9.9 million, an increase of 130 per cent compared with the same period last year, import data from the Ministry of Commerce showed.

Meanwhile, interest in beauty treatments is increasing as well, said Sim Sovanratana, a US-trained cosmetician and director of EL Skin & Wellness Center in Phnom Penh.

“While wealthy families and a middle-class are emerging, the beauty sector is booming as well,” she said.

Since its start in 2002 as the second professional training institute in Phnom Penh, much has changed for the Christina Beauty School, which now has four branches in Phnom Penh.

“At that time, many people were just earning enough to survive and beauty was a luxury rarely considered,” Sun Heang, director of the Christina Beauty School, told the Post.

“[Today,] there might be thousand salons and beauty centres in Phnom Penh,” she added. “[The business] is flourishing like a mushroom.”

According to industry insiders, young Cambodians open to Korean culture and lifestyle are a main driver for the development of the industry.

Ly Kimseang, the general manager of the Cambodian Beauty School, the Kingdom’s first professional training institute, said young Cambodians are very interested in beauty, especially girls.

“[Thus], men are gradually thinking more about their appearance and [are] spending their money for a better look,” she said.

Skilful people who offer good services can be very successful in the salon business, she added.

According to the National Institute of Statistics, about 74 per cent of Cambodia’s population was younger than 34 years old in 2011 and incomes were growing.

By Hor Kimsay│16 May 2013│The Phnom Penh Post

New Cambodian Airlines, partner to spend $1 billion

Manila (Philippine Daily Inquirer/ ANN) — Philippines’ San Miguel Corp. and its Cambodian partner are planning a US$1.5-billion maiden fleeting program for their newly created Cambodian Airlines.

About 16 to 22 aircraft will likely be deployed by Cambodian Airlines in the next two years, said Ramon S. Ang, president of San Miguel Corp. and flag carrier Philippine Airlines (PAL).

Last month, PAL struck a deal to set up the new airline in Cambodia in partnership with local tycoon Okhna Kith Meng. PAL controls 49 per cent of the new airline.

The move is an attempt to incubate a new airline in a new market that is among the least developed in Southeast Asia but which enjoys rapid growth.

At the sidelines of the stockholders meeting of Ginebra San Miguel, Ang said Cambodian Airlines would also enter into a “code-sharing” arrangement with PAL, through which the latter could earn additional revenue of $300 million to $400 million per year.

“Code-sharing” is a reciprocal agreement through which two or more airlines offer their passengers single booking, ticket and check-in flight to a certain destination.

“We are studying to deploy at least 16 to 22 planes immediately,” he said.

Ang said the new carrier would initially cater to regional destinations and later to cover domestic Cambodian flights.

The project value of $1.5 billion assumes an initial fleet of 20 planes.

PAL’s equity contribution is expected to be its pro-rated share of 30-per cent usual equity contribution.

In the first year of operations, Ang said Cambodian Airlines would likely have eight to 10 planes and operate more in the second year. “If business is good we’ll increase some more,” he said.

Asked how Cambodian Airline could acquire new planes that soon given the usually long procurement process, Ang said: “We have already acquired a lot of aircraft for PAL and some of these can be redeployed.”

Aside from Cambodia, SMC is also looking at Vietnam and Myanmar, he said. “We’ve been offered by lots of friends and bankers to take a look at opportunities. We are at the moment assessing those opportunities,” he said.

In 2011, the San Miguel group also made a strategic move into Malaysia with the acquisition there of the downstream petroleum businesses of American multinational oil and gas company Exxon Mobil.

VN ranks fourth in world instant noodle consumption

HA NOI (VNS)— Viet Nam placed fourth in global instant noodle consumption last year, with the population eating more than 5.1 billion packets of instant noodles.

China topped the list with 44 billion packets, followed by Indonesia with 14.1 billion and Japan with 5.4 billion.

According to the World Instant Noodles Association based in Osaka, Japan, 101.4 billion packets of instant noodles are consumed worldwide every year.

Instant noodles were invented by Japanese businessman Momofuku Ando, who founded the Nissin Foods Holdings Company in 1958. — VNS