L i E i d f R id L i E i d f R id Learning Experienced from Rapid Learning Experienced from Rapid Assessment on Logistic Facilities Assessment on Logistic Facilities and SME Clusters along the SECand SME Clusters along the SEC

Case Study : Trade & Investment Southern Coastal Case Study : Trade & Investment Southern Coastal Provinces of Cambodia Koh Kong, Sihanouk Ville, Kampotand Kep.

Mr. Chan SereiRathaCambodian YGMS Professional Mekong Institute, Khon Kaen

Ki d f Th il d Kingdom of Thailand

18 June, 2012

Contents: Contents: 1- Overall Background 2 Overall Objectives 2- Overall Objectives 3- Overall Expected Outputs 3 R i h l f C b di 3- Route in the coastal part of Cambodia 4- Logistic Facilities of the coastal of Cambodia 5- Existing SMEs in the coastal of Cambodia6- Potential Sectors in the coastal of Cambodia7- Challenges and Opportunities in Developing Trade and Investment in the coastal of Cambodia 8- Recommendations

Overall Background Overall Background

Ca Mau

Overall Background Overall Background gg- The southern economic corridor of the GMS, adopted by GMS country in 1998, comprises three subcorridors and one Intercorridor link, and with the implementing of AEC and TheDawei Development Project, the volume of trade and investment along the SEC will be increased and could be developed to be the along the SEC will be increased and could be developed to be the most outstanding corridor for the GMS. - On 19 December 2011, a meeting on JAIF proposal on Private Sector Development in SEC was held. From the meeting, MI has conducted the rapid assessment of logistic facilities and SMEs cluster in 15 provinces and 3 cities along the two subcorridors, cluster in 15 provinces and 3 cities along the two subcorridors, central sub-corridors and southern coastal sub-corridor, in SECduring the period of 29 January to 23 February 2012.

Overall Background Overall Background Overall Background Overall Background The SEC route connects 3 main cities in the GMS region namely : Bangkok , Phnom Penh and Ho Chi Minh. And also SEC cover 4 important deep sea ports in Bangkok-Lamchabang in Thailand, Sihanoukville in Cambodia, Phu Quoc and Cai Mep,pVung Tau-Vietnam, 3 international airport –Suvarnabhumi Airport, Thailand , Phnom Penh pInternational Airport, Cambodia and Ho Chi Minh City International Airport , Vietnam.y p ,

Overall ObjectivesOverall ObjectivesIdentify institutions andpeoples directly involved inp p ytrade and investmentpromotionAssess the institutions andAssess the institutions andhuman resource capacities intrade and investmentpromotionpromotionSurvey SME clusters andassess current and potentialpcapacityDetailed survey of logisticfacilitiesfacilities

Overall Expected OutputsOverall Expected Outputs

Preliminary AssessmentyReport and ProvincialProfilesDetailed maps of logisticsfacilities and SMEs sectorsTrade and Investment informationDraft SEC Capacity Building proposalDraft SEC Capacity Building proposal

Route in the Southern Coastal of Route in the Southern Coastal of Cambodia Cambodia Cambodia Cambodia

Key information about the Southern Key information about the Southern C l f C b di C l f C b di Coastal of Cambodia Coastal of Cambodia 1-The southern coastal consist of Koh Kong , g ,Sihanouk Ville, Kampot and Kep provinces. 2- The total population in the coastal region is 2 The total population in the coastal region is 960,487 (NIS2008) and the total land area is covers 17 237 square kilometers covers 17,237 square kilometers. 3- The general recognition of the total length f h C b di l i 440 K of the Cambodian coastal area is 440 Km

about one sixth of the total borders.

Logistic Facilities of the coastal of Logistic Facilities of the coastal of C b di C b di Cambodia Cambodia In general, the southern part of Cambodia

b ll d f t t ti can access by all modes of transportation : - Airport: One local airport in Sihanouk Ville (3

flights/week-SHV to Siem Reap). - Land roads: The total length of the road in the coastal

area is around 398 km extent from Had Lem –Chan Yeam (Thailand-Cambodia ) - Xa Xia, Ha Tieng, ( ) gVIetnam/Prek Chak, Cambodia.

- Sea port: One big Sihanouk Ville international sea port and one active private port called Okhna Mong Port p p gand some other local ports for fishing and tourist.

- Rail road: The total rail road from PP to SHV is 264 km but it currently active from PP to K-cement company but it currently active from PP to K cement company in Kampot ( 90 km).

Logistic Facilities of the coastal of Logistic Facilities of the coastal of Cambodia Cambodia Cambodia Cambodia

Existing SMEs in the coastal of CambodiaExisting SMEs in the coastal of CambodiaC D f f C D f f SME C b d SME C b d Country / Type Small Medium

Employees Capital Employees Capital

Current Definition of Current Definition of SMEs in Cambodia SMEs in Cambodia

Employees  Capital   Employees Capital

Cambodia 11‐50 50,000‐250,000 (USD)

51‐100 250,001‐500,000 (USD)

- Koh Kong: Fishery ,Tourism Related Services, SEZ and Agri and Agro-cultures (rice , sugar cane ..)Sihanouk Ville: Sea Food Processing Hotel and - Sihanouk Ville: Sea Food Processing, Hotel and Restaurants, Resort ,Recreation and others, SEZ and Agri and Agro-cultures (rice , rubber and palm oil) g g ( p )

- Kampot: Industrial Places (cement , mining ) , Agri and Agro-cultures (pepper, rice , cassava)

- Kep: Pepper, Salt and Rice

Potential Sectors in the coastal of CambodiaPotential Sectors in the coastal of Cambodia1-Currently, there are 22 SEZs in Cambodia, but 11 SEZs (50 %) located in the coastal provinces In 2011 export rise 39 5 % from 2010provinces. In 2011 , export rise 39.5 % from 2010-$4.9 B, and industrial export (mainly garment & textile) account for about $4.3 B. So manufacturing or export oriented companies So manufacturing or export oriented companies having a great potential.

2- There are increasing tourists arrival in Cambodia from year to year. 2.85 M tourists

i l i 2011 it i 14 % f 2 5 M i 2010 arrival in 2011 it is 14 % up from 2.5 M in 2010. For the tourist arrivals in the coastal area in 2011is over 1 million (both local & international). Th R d The Revenue expected to grow up to $2.1 B in 2012 comparing to $1.9 B in 2011.

Potential Sectors in the coastal of CambodiaPotential Sectors in the coastal of Cambodia3- Agri-Processing : Cambodian government has

keen on encourage an investment in these sectors.

As the total export in Agricultural sector in 2011 As the total export in Agricultural sector in 2011

was $ 422 M compared to $197 M in 2010. The

main export products are rubber, rice, palm oil

cassava and corn. The coastal area are potential

for most of all of the agricultural products and also

near the logistic hub as wellnear the logistic hub as well.

4- Food Processing and Aquaculture: Since the

global and local demands are increasing on foods.

Cambodia can produce 72,000 MT in 2011 and

marine capture 91,000 MT. In the coastal area like p ,

Koh Kong and Kampot are great potential for Aqua

and SihanoukVille for marine capture.

Challenges and Opportunities in Developing Trade Challenges and Opportunities in Developing Trade and Investment in the coastal of Cambodiaand Investment in the coastal of Cambodia

1- Opportunities : - Access to international market viaSihanoukville port - Inland transport link well within the coastal area via

ti l d d i th S th id li k national road and in the Southern corridor link - Cheaper labor among others in the region

Available and affordable land - Available and affordable land - Rich of natural resources and tourist sites - Agro and Aquaculture sector Agro and Aquaculture sector - Benefit of 11 SEZs around the areas and good

connection along supply chain in the region (esp, Th il d d Vi ) i h i i ( h lid Thailand and Vietnam) with tax incentive (tax holiday for 6 to 9 years)

2- Challenges :L d f ( SME ) - Limited access to finance (esp, SMEs)

- Lack of skilled and less skilled labor as h h i h the cheap wage nature in the country

- Absence of e-documents at the border , l d l ti t ll rules and regulations not well aware among

public and local authorities Overall logistic services in the area are limited- Overall logistic services in the area are limited

- The geographical area ( ex. Koh Kong is high hill road where limited for heavy truck ) road where limited for heavy truck )

- Lack of supportive services like school , hospital and centre

- High cost of electricity

Recommendations : Recommendations : Recommendations : Recommendations : - Strengthening PPP through better policies - Increasing awareness of laws, regulations g , gand agreements - Strengthening in implementing Single Wi d d d t Window and e-document - Increasing an investment on public serviceson school , vocational training and hospital g p- Capacity building for local authorities ontrade procedures, rules and regulation and agreement management skills etcagreement , management skills ..etc- Decentralize the works and authorities - Attracting more investment on priority sectors - Higher productivities (human, machinery and

technology)