US firms plan Cambodia plug [American firms running away from China to Cambodia?]

Wednesday, 25 May 2011
By Liam Barnes

Photo by: Heng Chivoan

A woman makes shoes at Sin Chn Hong Plastics Industry Company in the Phnom Penh Special Economic Zone last week.

Phnom Penh Post

Cambodia is an emerging alternative for businesses feeling increased pressure in China, according to American Cambodian Business Council delegates speaking in Hong Kong today.

Council Chairman Bretton Sciaroni said the organisation had held similar events in Singapore in the past, but saw growing opportunity to attract US business located in China.

“In recognition that we need to familiarise the US business community there to the opportunities in Cambodia, we have organised this mission to Hong Kong,” he said.

“Although business there is traditionally focused on mainland China, a number of businesses are looking at exit strategies as the competitive environment makes business more difficult.”

The delegation will be led by US Ambassador to Cambodia Carol Rodley. Delegates are to speak at Hong Kong's American Club today.

It comes as China faces concern over rising labour costs and price inflation.

Scott Huff, a delegate and the CEO of Fair Manufacturing, which has factories manufacturing pet treats in both Cambodia and China, highlighted in the Kingdom’s growth potential.

“China is, and will remain a top investment destination. It has plenty of resources for manufacturing and easy transportation methods, unlike Cambodia, where shipping goods is still fairly tricky,” he said yesterday

“Yet, the pressure is really starting to mount in China, while it feels like there are more growth situations in Cambodia, rather than restraints.”

As an alternative, the delegation will highlight low labour rates, a young and enthusiastic workforce and a liberal investment climate as Cambodia’s prime attractions, he said.

“The average age of the Cambodian workforce is around 25 years old, they are young, energetic and determined to learn, additionally China’s labour rates are 3 to 4 times the price of Cambodia’s, ” he said.
“However, the appeal goes beyond the cost of labour, it’s the availability.”

The delegation primarily aims to attract investors affected by recent labour shortages. The garment sector in particular is under pressure, while in Cambodia the industry continues to advance, according to Huff.

The agriculture sector presented another growth opportunity in the Kingdom.

“I think it’s highly likely agricultural products will have a strong future in Cambodia – the industry is bound to be successful,” he said Sciaroni expects the delegation to raise interest among Hong Kong based companies as previous missions to Singapore have done.

“There is a concentration of multinational corporations, law and accounting firms, and others that rivals that located in Singapore. And we hope that we can generate interest to have a business mission from Hong Kong to Cambodia later this year,” he said.

“So AmCham Cambodia sees great merit in having a mission to Hong Kong.”