News Column

Japanese companies diversify investments in Cambodia

February 21, 2014

PHNOM PENH, Feb. 21 -- (Kyodo) _ While more Japanese companies are flocking to Cambodia for investments in recent years, they are more diversified, ranging from restaurants to manufacturing industries and electronics.

Yoshihito Katsuo, first secretary in charge of trade at the Japanese Embassy in Phnom Penh, told Kyodo News on Friday that Japanese companies investing in Cambodia are overwhelmingly engaged in labor-intensive manufacturing, mostly in the garment and shoe-making sectors.

"A considerable volume of Japan's investment in Cambodia has been flowing into these industries. However, in recent years, companies in electronics and machine parts industries which are producing electronic parts, auto parts and metal products, etc., have started to invest in Cambodia, contributing to diversification of its industries," he said.

He said major investments of Japanese companies in 2013 include the construction of factories which produce eye drops, watch parts and garments, among others.

According to Katsuo, these major companies investing in Cambodia have established a Japanese Business Association of Cambodia, which currently has 122 registered members.

"It is expected that the number of JBAC members will continue to rise for years to come considering the present trend of Japan's investment," he said, adding there also exist other Japanese investors who do not belong to the JBAC such as owners of shops and restaurants.

While there is no specific data for Japanese restaurants running businesses in Phnom Penh, it is estimated to be about 50, both small- and large-scale restaurants including The Sushi Bar, Shinbashi Binchoutei, Grant Yamato, Samurai and Ohan.

According to the data from the Council for the Development of Cambodia, Japan's investments in Cambodia amounted to $51.79 million in 2013, down from $328 million in 2012.

Katsuo said the decline reflects the fact that the 2012 figure included the exceptionally large-scale investment associated with the construction of a Japanese shopping mall, Aeon, amounting to $205 million.

Government statistics showed that only 15 Japanese companies invested in Cambodia from 1994 to 2009 with a total capital of $147 million, but five Japanese companies made investments worth $35 million in 2010 and there were 19 investments worth $66 million in 2011.

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Source: Japan Economic Newswire

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