Cambodia inviting for Vietnamese investors

VietNamNet Bridge – While competition in many areas is fierce in the domestic market, some companies in HCM City have begun to approach a neighbouring market – Cambodia.

The Dong Thien Joint Stock Company has nearly stopped its business in Vietnam to focus on a sand exploiting project in Cambodia. Its branch in Cambodia has been set up already and will become operational this June.

Assistant to Dong Thien’s General Director, Nguyen Phuc Son, said that the VND20 billion (US$1.25 million) sand exploiting project in Cambodia was the biggest one of Dong Thien to date. The company can exploit up to 7,000 cu.m of sand each week to export to Vietnam.

“Sand in Cambodia meets Vietnam’s standards for construction sand. The local market is now short of this material so the market for sand is extremely large,” said Mr Phuc.

Only one hour by bus from HCM City, Cambodia has become an attractive destination for many companies in the city thanks to its low labour cost, spacious land, and open market.

Twenty-seven Vietnamese companies have opened branches, representative offices and invested in projects in Cambodia. This number is double compared to two years ago. Main fields for Vietnamese investment are health, agriculture, transport, telecom, and hydro power production.

The Ministry of Planning and Investment (MPI) has recently licenced the Saigon Trade Corporation (Satra) to form a joint venture with Sokimex Group to build big plants to process cashews and seafood, to breed cows and to build a supermarket in Cambodia.

Four travel companies, the Saigon Mekong Joint Stock Company, Saigontourist, Cho Lon Tourist, and Fiditour, have cooperated with Cambodian partners to bring tourists from HCM City to Phnom Penh and Siem Reap by land, air and water.

The US$10.5 million Cho Ray-Phnom Penh hospital project is underway, in which the Saigon Health Investment Joint Stock Company is contributing two-thirds of the capital and the remaining is coming from Cambodian partners. The representative office of this joint venture has been set up and is waiting for an investment licence from the Cambodian government.

However, investment in Cambodia still faces many difficulties. A project between the Viet Nga Infrastructure Investment Joint Stock Company and the Mong Reththy Group to establish a joint venture to build a road from the hub of Phnom Penh to Cambodia’s international airport in the form of build-operate-transfer (BOT) was canceled at the last minute because of some problems such as site clearance.

Nguyen Van Hung, representative of a rubber company in the southern province of Dong Nai which has a rubber growing project in Cambodia, also had to abandon his project due to problems associated with site clearance.

Deputy Director of the Department of Planning and Investment of the southern province of Tay Ninh, Tran Luu Quang, complained that even Vietnamese agencies caused problems for companies investing in Cambodia. He gave an example that many companies in Tay Ninh that want to grow cashews and cassavas in Cambodia but when they import cashews and cassavas to Vietnam as materials they face difficulties in customs formalities.

“Because of high import tax rates and no preferences, many companies are discouraged and leave their projects unfinished,” Mr Quang said. He said he hoped that relevant bodies like the Ministries of Trade and Finance and customs agencies would address these problems.

(Source: VNE)