Cambodian garment export up nearly 20 pct in 1st half

The garment industry, Cambodia’s largest income earner, reported 2.51 billion US dollars in export value in the first six months of this year, a 19.5 percent rise from $2.1 billion over the same period last year, the figures of the Commerce Ministry showed Wednesday.

Cambodian apparels are mostly sold to the United States and European countries, with some to Canada, Japan, South Korea and China.

The figures said that from January to June this year, the garment exports to the United States were valued at $1.02 billion, up 10 percent year-on-year. The exports to the European nations were 862 million dollars worth, up 27 percent, and the exports to other countries were $629 million, up 27 percent. (XINHUA)

“Our garment products are mainly reliant on the US and European markets, so our export growth demonstrates better economic situations in those countries,” Khuon Savuth, an official at the Commerce Ministry’s Import-Export Inspection and Fraud Repression Department, said Wednesday.

According to the figures, garment export accounted for 80 percent of the country’s total exports.

The industry is comprised of about 500 factories with some 510, 600 workers. A worker’s monthly minimum wage is 80 dollars.

In 2012, the impoverished Southeast Asian nation earned 4.6 billion dollars from garment exports.

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Garment IPO may arrive in time for polls

After the listing of Taiwanese-owned garment company Grand Twins International (Cambodia) Plc on the Kingdom’s stock exchange was delayed indefinitely, its underwriter said yesterday that the firm hopes to list before the national elections in late July.

According to the underwriter, Phnom Penh Securities (PPS) Plc, negotiations between the company and the Securities Exchange Commission of Cambodia (SECC) over the initial public offering price are finished by now and “we hope [they can list] before the election…We still have a lot to do. We’ll try our best.”

In February, the Post reported that Grand Twins International said it intends to list on the Cambodia Securities Exchange (CSX) in March. PPS said then that the company would offer 12 million shares at $0.25 a share.

PPS said Grand Twins had “negotiated with the SECC about the IPO price, the listing price”, which was “higher than the SECC agreed”, adding that they have now agreed on a price, but declined revealing the amount.

According to an active market participant of the CSX, the existing status regarding Grand Twins International “is more of an administrative and compliance matter that the underwriter is trying to complete for documentation”.

“The timeline to list very much depends on the completion of the required documentation, if the documents are ready and can be approved by SECC before election, it will be listed before election, otherwise the listing will need to be postponed to after election,” the person familiar with the matter said.

Ming Ban Kosal, director-general of the SECC did not reply to an email yesterday.

The Post reported in March that state-owned fixed-line company Telecom Cambodia’s plan to join the CSX had been postponed indefinitely due to poor financial performance.

On Monday, Lou Kim Chhun, director general of Sihanoukville deep sea port, told the Post that the company is still working with an underwriter, SBI Phnom Penh Securities, on its IPO.

“We made a lot of progress on the project. Everything is going smoothly now,” he said, without offering a timeframe . “We have not set the exact time yet. But we will try our best to get it as fast as we can.”

By Anne Renzenbrink and May Kunmakara │5 June 2013│The Phnom Penh Post

GE aims to double business in Myanmar this year

American conglomerate General Electric expects its business in Myanmar to double this year, a senior executive told The Myanmar Times last week.

Stuart Dean, the company’s chief executive officer for Southeast Asia, said GE earned US$50 million in 2012, its first year of operations in Myanmar, and he expects this to double this year.

“We see huge potential and are currently in discussions to deepen our local partnerships,” Mr Dean said on May 23.

The comments followed the establishment of a regional office and the signing of two potential distribution deals with local partners.

GE opened its Yangon office on May 23. At a ceremony in Nay Pyi Taw the day before, it announced that it had signed a memorandum of understanding with Lighting Co Specialists and a letter of intention with technology company Partners Associates. The announcements came just days after GE Energy’s president of global sales and marketing, James Suciu, met President U Thein Sein in Washington.

GE and Lighting Co Specialist aim to distribute a wide range of GE lighting products in Myanmar. Through Partners Associates, GE aims to sell its batteries to telecom companies, which are overly-reliant on diesel powered generators for energy.

GE became the first US company to re-enter Myanmar following the easing of US sanctions in July last year. Its first deal was to provide medical equipment to two Yangon Region hospitals through local partner Sea Lion.

Last September its aviation branch leased two aircraft to state-owned Myanma Airways.

Two months later GE made a foray into Myanmar’s energy sector through a project for a natural gas-fired power plant project with TOYO Thai Power Corp in Yangon’s Alhone Township.

Despite GE’s bullish outlook for Myanmar, the company has quickly learned of some of the troubles that come with being one of the first US firms on the ground in a country that is still under targetted sanctions imposed by the US government.

GE had planned to open its office earlier this year, but was delayed after it submitted a list of guests to the US Embassy to be checked against the Treasury Department’s Specially Designated Nationals (SDN) list.

The process of clearing around 400 names, according to Mr Dean, took far longer than expected.

US companies are barred from engaging in business with individuals and companies from Myanmar that appear on the SDN list.

By Tim MclaughLin   |   Monday, 27 May 2013

Milled rice exports up 127 per cent

Cambodian milled rice exports increased by more than 100 per cent during the first five months in 2013 compared with the same period the year before, according to data from  the Council of the Development of Cambodia.

The figures showed that milled rice exports reached 146,854 tonnes at the end of May, an increase of 127 per cent when compared with the 64,581 tonnes sent out in the first five months of 2012.

Kim Savuth, president of milled rice exporter Khmer Food Co Ltd and chairman of the Federation of Cambodia Rice Exporters, said the increase was a big surprise. “We encourage the famers to increase plantation of fragrant rice to keep [the high level] of  exports,” he said.

In contrast to some neighbouring countries, Cambodia has big potential for so-called fragrant rice. “Only Cambodia and Thailand can produce fragrant rice. [But] our fragrant rice is $100 to $150 per tonne cheaper than in Thailand – that is our potential.”

By Sorn Sarath│10 June 2013│The Phnom Penh Post

Chemicals giant looks to invest in Asia-Pacific

German chemicals giant BASF has unveiled its plans for a major investment drive in the Asia-Pacific region, where it hopes to take advantage of above-average growth to more than double its sales.

BASF, which currently generates around 16 percent of its revenues in Asia Pacific, announced plans to invest 10 billion euros ($13 billion) there by the end of the decade and create up to 9,000 new jobs.

The German giant said it aims to generate annual sales of 25 billion euros in the region by 2020, up from 11.7 billion euros in 2012.

More than 2.0 billion in regional sales would be achieved through new business and acquisitions by 2020.

In 2012, BASF booked total worldwide sales of 72.1 billion euros on a workforce of 110,000.

The cumulative annual growth rate for real chemical production for Asia Pacific is estimated at 6.2 percent until 2020, well above the world average of 4.0 percent, BASF said.

And the German group’s aim would be to “grow profitably at least two percentage points above regional chemical output.”

“To achieve this, BASF plans to invest 10 billion euros together with its partners by 2020 to further develop its local production footprint in Asia Pacific,” it said.

In March, BASF announced it would focus its business in Asia on chemicals destined for the textile and leather industries.

The group said it aims to produce around 75 percent of the total products it sells in Asia in the region by 2020.

“Local production improves resource efficiency by reducing the transportation needed for imports and exports, and by enhancing energy and raw material efficiency,” it explained.

BASF said it currently operates more than 100 production sites in the Asia Pacific region, including two highly-integrated sites in Kuantan, Malaysia and in Nanjing, China.

In addition to those main markets, BASF said it also hopes to explore “untapped markets in Mongolia, Laos, Myanmar, and Cambodia.”

“In the next decade, Asia Pacific will face huge challenges while remaining the fastest growing market for the chemical industry,” said BASF executive board member Martin Brudermueller.

BASF said it aims to conduct 25 percent of its global research and development (R&D) in Asia Pacific by 2020, with a total of around 3,500 R&D personnel in the region, up from around 800 in 2012.

It plans to establish research facilities in the areas of electronic materials, battery materials, agriculture, catalysis, mining, water treatment, polymers and minerals, it said.

Investors did not appear particularly enthusiastic about the massive investment drive and BASF shares were underperforming the overall market in Frankfurt on Tuesday, gaining a modest 0.21 percent, while the blue-chip DAX 30 index was up 0.85 percent.

By AFP   |   Tuesday, 04 June 2013

Rice exports to region rising

Cambodian milled rice exports are gradually lessening their dependency on a single market by expanding their shipping destination in Asia, a sign insiders say is good news for the industry.

Kim Savuth, president of the Federation of Cambodian Rice Exporters, told the Post yesterday that milled rice exports to European countries, Cambodia’s traditional market, is still increasing, but its percentage share is gradually decreasing. He said the trend of exports to Asian market is on the rise.

“We are able to maintain old market and in addition we can export to new destinations. This is because of our fragrant rice is getting better known,” Said Kim Savuth.

In the first four months of this year, Cambodia exports to Malaysia, Thailand and China, reached 40,500 tonnes, 34 per cent Cambodia’s total overseas exports, according to figures from the secretariat of the One Window Service for rice exports.

The data show that those three countries are among the top five importers that bring in rice from Cambodia, with France and Poland at numbers one and two.

During the first four months of this year, Cambodia exported 118,000 tonnes of milled rice, a 130 per cent increase from the same period last year.

In the past few years, the Cambodian government has signed trade deals with a number of countries, including China, Malaysia, Indonesia and more EU countries to open access to their markets.

While experts agree that the potential is there, David Van, deputy secretary-general of the Alliance of Rice Producers and Exporter of Cambodia (ARPEC), said access to Chinese and Malaysian market is increasing, but added the flow is only fragrant rice.

“The sector’s competitiveness depends on cost, and the cost of milling rice in Cambodia is still high in comparison to other major exporters,” said David Van. “Anyway, our fragrant rice has enough of a competitive advantage.”

Regarding price competitiveness, Cambodian rice millers, exporters and traders benefit from a competitive edge in the European Union market thanks to tax exemptions.

The European Union’s “Everything But Arms” initiative exempts Cambodia, currently on the UN list of Least Developed Countries, from an import tax of €175 (about $224) per tonne for the EU market.

However, Kim Savuth said potential exists not only in the EU, but also China and Malaysia. Cambodian rice is able to go to China, Malaysia, and other countries “if we have more fragrant rice to export”, he added.

“Regardless of trade preferential treatment, our fragrant rice can export to wherever we want and compete.”

China’s rice imports have increased nearly four-fold to about two million tonnes in 2012 and are expected to reach about 2.5 million tones, according to some estimates.  Cngrain.com, an agricultural news website, estimated that China’s 2013 rice imports may total 3.25 million tonnes.

“There is not concern on demand side, but we have to be sure we have enough quality rice to fit their demand,” said David Van.

Solar panels see sunny times ahead

Officials and business people say solar panels are gaining in popularity in rural areas, where the power grid does not reach.

Mao Sangat, director of Solar Energy Cambodia, told the Post yesterday that his company saw increases of installation of solar power systems for families whose children worked abroad and remitted money to their parents.

He said that so far, there were no huge projects to equip solar panel systems in public places such as schools or hospitals in rural areas supported by NGOs, but solar panels were selling well to families in three provinces – Kampong Cham, Prey Veng and Svay Rieng.

“I sold about 100 units per month, and I’ve seen an increase of around 10 per cent from month to month” he said, adding that farmers are interested in using solar energy because there were no power lines laid to their villages and they never expected to get electric power from the government.

“They don’t expect the power grid to reach their homes any time soon,” he said, adding that “when they see goodness of lights from someone’s home, who have installed the solar panel, they started to install too.”

The price for a solar panels range from $175 to around $400, depending on the needs of the buyers, according to Sangat, who imports the equipments from Singapore, China, and Thailand.

He said most of the solar panel systems were sold at $550 per unit, which can be used for a few lamps, colour TVs or other purposes. He said solar panels are a better choice than generators, which are very noisy and expensive.

Yiang Tal, chief of administration of Rural Electrification of Cambodia, said Electricity of Cambodia (EDC) provided $4 million for the Department of Rural Electrification Fund (REF)  this year for providing loans to villagers and private electricity providers for implementing rural electricity development.

He said that some $2 million had been given for 4,000 solar panels for people in four provinces – Kampong Thom, Pursat, Kratie and Siem Reap.

He said that more than $1 million had gone to providing loans to private electricity providers to connect lines to rural homes, and all the connected families were required to pay back over two or three years without interest charges.

“We are targeting the villages which were off-line, and I think that to develop electricity power, the government could not do it alone, without the participation of the commercial sector and private providers,” he said, adding that the $4 million project will end in August this year.

Sek Sokha, a villager in Svay Chek commune in Romdoul district of Svay Rieng province, said that he just decided recently to install a solar home system costing of $1,100 after seeing how many villagers used them and how simple they were to operate.

With the two solar panels, he hoped it would provide power to eight lamps, a colour TV and loudspeakers, he said, adding “villagers use them a lot, almost every home”, he said, adding:  “I see it is easy to use, that’s why I decide to buy them too.”

Houy Chanthy, sales director at Khmer Solar company, said her company also sold mostly to the provinces of Kampong Cham, Prey Veng, Svay Rieng and Kratie. She said the sales are mostly in those provinces because the cost of electricity there was so expensive.

“I think that if the government extends power grids to most of the areas, the solar panel sales will maybe decrease,” she said. On the other hand: “If the government provides power late, the needs for solar systems will grow.”