The Kingdom’s cass-ava exports soared 74 per cent in the first five months of 2011, according to statistics from the Ministry of Commerce’s Camcontrol division.

Exports between January and May climbed past 212,000 tonnes from the 121,500 tonnes shipped during the corresponding period of 2010, Camcontrol said.

At the same time, revenue from cassava exports reached US$10.3 million, up from  $4.4 million in the first five months of 2010.

“The growth will help boost Cambodia’s economic potential,” Kong Putheara, director for the Department of Statistics at the Comm-erce Ministry, said.

Increased demand in  international markets, chiefly Thailand and Vietnam, had accounted for the growth, he said.

Cassava shipments by ACOBIS, a big exporter of agricultural products to Thailand, jumped to 27,000 tonnes over the first five months of this year from 7,000 tonnes in 2010, according to director Ruos Manmuy.

She credited Thailand’s appetite for the crop as the reason for the increase.

Ruos Manmuy also noted that the price of dry cassava – it is sold as fresh, dry or in powder form – were now between $185 and $236 a tonne.

Last year, dry cassava fetched between $118 and $143 a tonne, she said.

At the same time, the area of land used to farm cassava is on the rise.

Khan Samban, director of the Agro-Industry Department at the Ministry of Agriculture, Forestry and Fisheries, said that at present, the crop was being grown on 190,000 hectares, which yielded 3.9 million tonnes in 2010-11.

"That’s an increase of 30,000 hectares and 400,000 tonnes over the 2009-2010 growing season," he said.

“Cassava is easer to grow than other crops, and the price and markets are available. That pushes farmers to increase their cultivation."

Khan Samban said cassava cultivation would grow even more by year’s end because farmers tended to plant more early in the rainy season.

“We believe the cassava price will not go down, as it’s in demand for both eating and producing ethanol."

Phnom Penh Post

SHIPMENTS through Sihanoukville Autonomous Port have increased this year largely on increased exports of rice and acacia wood, Director General Lou Kim Chhun said.

Some 91,100 Twenty-foot Equivalent Units (TEUs) were transported through the facility between January and May, an 8.7 percent increase on shipments during the same period last year, according to port statistics.

An increase in shipments of products such as garments, oil and coal were main drivers of the growth, though agriculture and timber products were showing the largest increase, he said.

“Rice and acacia-wood exports jumped better than expected in the first five months,” Lou Kim Chhun said on Tuesday.

The port is currently shipping 10,000 tonnes of acacia wood to China each month, while imports of oil are also on the rise.

Lou Kim Chhun highlighted the potential of rail shipments from Phnom Penh to the port as increasing overall exports.

The rail link between the capital and Touk Meas in Kampot province opened last year, while the leg between Kampot and Sihanoukville is slated for completion this year.

“We strongly believe that when the railroad from Touk Meas links with Sihanoukville port, shipments through the port will increase more next year,” he said.

One of Cambodia’s largest trucking companies, So Nguon Group, is taking a wait and see approach to competition from rail.

“We don’t think it will affect our business of transportation, but we don’t know yet. We will wait to see the situation at the time,” said its President So Nguon on Tuesday.

Phnom Penh Post

When they’re finally ready to make the jump from renting to home ownership, most first time homebuyers enlist a real estate agent to help them through the process. No wonder: buying a home is complicated and when it’s your first time, you feel like you could use some hand-holding.

Real estate agents provide a valuable service and are generally well-paid as a result. There’s nothing wrong with that. But money does have a way of distorting relationships — even when honest people are involved.

Here are some tips that will help you, as a first time homebuyer, take full advantage of today’s real estate market and get the most out of your relationship with your real estate agent.

When you’re new to the process, it is easy to believe that the guy with 20 years’ experience calls the shots. This couldn’t be further from the truth. Your real estate professional is your agent: he or she works for you, gives you advice and negotiates on your behalf. He doesn’t make decisions for you and you should not expect him to.

After you’ve looked at a few houses that weren’t quite right, your agent will probably tell you not to get discouraged, and that eventually you will “fall in love” with the right property.

Love makes you do stupid things. Stupid things like paying too much or looking past costly repair items. As a first-time homebuyer, you should develop a healthy ‘like’ for a property, but keep the relationship open, see other houses. There will be plenty of time for “love” after you’ve put in the 300 hours of sweat equity to make your house a home.

If you never fall in love with a piece of real estate, you’ll never cry when you have to walk away from it. Real estate agents often use the phrase “my client will walk away” and some use it quite loosely to stress the importance of a point for negotiation. If you want to retain the full strength of your position as a buyer, you’ll need “I’ll walk away” to mean that you are done if your demands aren’t met.

For your agent to communicate this correctly to the seller, he needs to know that you mean what you say. And yes, if it reaches that point, you will need to walk away from a property. Not to worry: there are others out there. But don’t be surprised if you hear back from the seller a week later that he is willing to work with your demands.

Your agent is going to tell you that you have to move quickly and make the best offer possible when you find the right property. This is not always the best advice. As a first time homebuyer, you are in a unique position of strength in terms of the real estate transaction. You aren’t selling your home, so you don’t have to move. You can look at and make offers on many properties. You can start with a low offer and negotiate upwards if the seller balks. You can table a counter-offer and look around a bit before deciding to pay more. The opposite is generally true of sellers in a buyer’s market. They need to sell the property and are motivated to move as quickly as possible. Use time to your advantage.

Your agent performs valuable services in the real estate transaction, but he really doesn’t make anything until you buy a piece of real estate. That makes him a salesman. Being a salesman, he wants you to feel like he is a friend who has your best interests at heart.

The reality is that your interests and your agent’s may not be aligned. He is actually better off financially if you make a quick decision and pay too much for a property. This is, after all, likely the largest business transaction of your life. Make sure that your agent, regardless of how personable he is, understands that you are a customer and that you need him to drive the best business deal for you.

In the New York Times best-selling book Freakanomics, authors Steven D. Levitt and Stephen J. Dubner point out that real estate agents typically market their own homes for 10 days longer than they market their clients’ homes. Is this because they are so busy with their clients that they don’t have time to market their own homes?

No, it really comes down to how we incent real estate agents with commission. When an agent is selling his own home, he enjoys the full benefit of any increase in sales price so he is extremely motivated to market for as long as possible to get the best sales price possible. But when it comes to a client’s home, an extra week on the market might lead to a higher sales price for the seller — but the agent will only enjoy a very small amount of that increase in the form of marginal increase to commission. Meanwhile, marketing a home for another week would take him away from marketing someone else’s property. As such, the listing agent is highly motivated to convince the seller that your offer is the best offer he is going to receive. Use this to your advantage and make offers that are good for you.

When it comes to a property that has been sitting with no action, there is no such thing as an offer that is too low. Some agents will tell you that that you could offend the seller or that your offer is embarrassing. A good agent will encourage you to make strategically low offers. Offers are really not a lot of work and the worst thing that can happen is that your offer is not accepted. Often, however, in a buyer’s market a low offer will turn into a counter-offer. Think of the first offer as the starting point for negotiations and be prepared to consider counter-offers.

Over the past decade, online real estate companies have started to take market share away from traditional brick-and-mortar agencies. They’ve grown by offering discounts and rebates on the traditional 3% real estate commission. RedFin, one of the leading online real estate companies, offers buyers a rebate of up to 50% of the commission at close. RedFin also compensates their agents with salary as opposed to commission, which alleviates some conflict of interest issues. Granted, the service may not be as extensive or personalized — but the extra cash may offset the drawbacks.

Surplus of 2 million tons of rice in Cambodia can be a good position in exporting oversea....

With the recent effort from the Cambodia Royal Government, the high quality of the Cambodia rice herself and setting up of the international standard of rice millers. These factors lead Cambodia to get more and more attraction from rice importers from French, Poland, Russia, Sweden, Netherlands, New Zealand, China, America, and Africa. Significantly, the importers and wholesalers have repeated in larger quantity their purchase order after the first shipment done. This is because the importers have been accepted not only the high quality of Cambodia Rice, but also the huge quantity that is available to buy from Cambodia.

KUALA LUMPUR, June 7 — OSK Investment Bank is hoping to tap opportunities in the Cambodian securities market with the official launch of its local securities unit OSK Indochina Securities in Phnom Penh today.

OSK Indochina Bank and OSK Indochina Securities chairman Datuk Nik Mohamed Din said in a media statement that OSK hopes that it will be able to support and participate in the Cambodian government’s initiatives to develop its capital market, and also enhance OSK Indochina Bank’s role in the financial services industry in Cambodia.

The Board of Investment will review a total of nine investment applications with a value of over 20 billion baht today. 

The board will also evaluate the effects of the Thai-Cambodian border dispute on Thai investments in the neighboring country.

REPRESENTATIVES from Japan’s Nidec Corporation had met with Prime Minister Hun Sen to discuss setting up manufacturing in Cambodia, the premier’s personal assistant, Eang Sophalleth, said.

Nidec Corporation chief executive officer Shigenobu Nagamori in 2010. He spoke with Prime Minister Hun Sen on Tuesday, raising the possiblity of investing in Cambodia. BLOOMBERG

Speaking after a meeting between Hun Sen and Nidec chief executive officer Shigenobu Nagamori, Eang Sophalleth said the firm was looking to the Kingdom after investing in Vietnam and Thailand.

“I travelled to Cambodia this time to express my willingness to invest in this technology [here],” Eang Sophalleth quoted Nagamori as saying.

Nidec Corporation manufactures mid-size motors, fan motors and pivot assemblies for the IT industry.

It operates in 28 countries, has about 130,000 employees and earned revenues of US$8.5 billion in the latest fiscal year.

Hun Sen expressed his support for the investment, and urged further discussions with the Council for the Development of Cambodia, Eang Sophalleth said.

“He has an absolute intention to invest in Cambodia, though more talks need to be done,” he added.

CDC deputy secretary-general Duy Thov said Japanese investment in Cambodia would step up in the future.

“We have established a joint commission between Japan and Cambodia to boost investment, and we have compromised and provided incentives,” he said.

CDC investment figures show there were no Japanese investments receiving approval in 2010, while Japanese investments in Cambodia in 2009 totalled US$5 million.

Nidec competes with Minebea in the manufacture of motors for hard drives, according to Reuters.

Minebea, which broke ground on its own $60 million factory in the Phnom Penh Special Economic Zone on May 24, aims to wrap up construction on the site at the end of 2012.

 

Phnom Penh Post

Cambodia is counting on a designation bestowed on its coast to increase investment in its beachfront, as statistics show an overall double digit percentage increase in visits to the Kingdom over the first four months of 2011.

The Kingdom’s 450 kilometre coastline between Koh Kong and Kep would become the second largest tourist draw behind the Angkor temples, Minister of Tourism Thong Khon said Tuesday, as he returned from 

SOYBEAN export tonnage more than doubled in the first four months of the year compared with the same period last year, according to statistics from the Ministry of Commerce’s Camcontrol Department.

Some 2,479 tonnes of soybeans were exported during the period in 2011, up from 823 tonnes in the period last year, the statistics show.

The projects are part of a trade promotion plan approved by the Prime Ministers of both countries at the Vietnam-Cambodia business conference in April 2011.

A seminar was held in Phnom Penh on May 27 to offer tax reductions and exemptions for businesses involved in rubber growing projects in Cambodia.

Cambodian officials highlighted the significance and benefits of these projects, saying that the projects helped upgrade infrastructure, provide clean water, build houses for workers and pagodas for religious followers, thereby improving local people’s incomes.

VOV News

MONG Reththy Group expects to operate its palm oil plantations at a loss this year, although they will generate revenues of US$20 million, according to owner Mong Reththy.

The firm has continued to increase the size of its plantations, anticipating producing 20,000 tonnes of refined palm oil this year, from 15,000 tonnes last year. Larger plantations will make the enterprise more profitable, he said.

“Output of oil has increased because of an expansion in plantations last year,” he said, adding the company’s palm oil revenues this year were expected to be some $2 million below break-even.

The firm’s current plantations in Preah Sihanouk province cover an estimated 10,000 hectares. Mong Reththy Group currently exports palm oil to buyers in India and the European Union at $1,100 per tonne, about the same as it achieved last year.

Ministry of Agriculture, Forestry and Fishery Secretary of State Chan Tong Yves said the palm oil plantation ought to become profitable as the area under plantation increases each year, in response to growing international demand.

“The development of this sector will provide more job opportunities and also uphold the Cambodian economy,” he said

Mong Reththy Group first began producing palm oil in Cambodia in 1996.

In March, Bursa Malaysia-listed Golden Land Bhd said it aimed to obtain two concessions for palm oil in Koh Kong province.

Meanwhile, palm oil climbed to the highest level in more than six week yesterday, on concerns that stormy weather in the US may further delay the planting of soybeans, and as importers stepped up purchases of the tropical cooking oil.

The August-delivery contract gained as much as 0.6 percent to 3,438 ringgit (US$1,130) per tonne on the Malaysia Derivatives Exchange, the highest level since April 11, and ended the morning session at 3,433 ringgit. ADDITIONAL REPORTING BLOOMBERG

Phnom Penh Post

REFRESH Mobile intends its electronic top-up technology to challenge scratch cards in Cambodia as the primary method for adding credit to prepaid mobile phone accounts, company insiders said.

But some in the industry said scratch cards will be an entrenched part of Cambodia’s mobile phone culture for years to come.

Refresh distributes a handheld device that independent dealers use to sell top-up authorisation codes, thereby eliminating mobile operators’ need to produce scratch cards outside the country, import and then sell them, company officials said.

“We eradicate all those costs immediately,” said Ian Watson, Refresh Mobile’s founder and a major investor.

Dealers sell top-ups in commons amounts, such as US$5, $10, $20 and $50. Refresh’s devices then connect wirelessly with the company’s computer servers to generate the authorisation codes typically held on scratch cards. A receipt containing the code is printed and given to the customer.

Information can be displayed in both English and Khmer, making the devices more accessible to a larger number of Cambodians, Watson said.

He claimed companies can save between $1 million and $2 million by using Refresh’s top-up machines, in addition to getting a measure of security scratch cards cannot offer. While scratch cards can be stolen and resold, stolen top-up machines are immediately disabled by Refresh, company officials said.

Watson also touted the device’s ability to deliver real-time data for mobile operators, as well as advertising to customers on the printed receipts.

At present there are over 6,500 devices in 19 provinces across Cambodia, with plans to have 12,000 on the market by the year’s end, according to Watson.

He said Refresh so far has signed a deal with only Mobitel, which operates the service under its V-Load brand. But the company is in “detailed negotiations with a number of carriers ready to sign long-term contracts,” he said.

Mobitel Chief Operating Office Kay Lot said that while early adoption of Refresh’s electronic top-up devices was slow, it has been picking up speed.

“We are beginning to see quite a positive take-up,” he said, adding, “This is where the future is going.”

Still, scratch cards will remain a popular top-up choice for some time.

“We recognise the tradition of scratch cards,” he said. “It’s not just something you can change overnight.”

Mobitel General Manager David Spriggs shrugged off suggestions that Refresh would cut into his company’s Cellcard Cash service, which among other functions allows customers to top up their prepaid accounts via their mobiles.

“They’re just different ways of topping up,” he said. “I don’t see any problem with having multiple options for customers.”

Although Mobitel is the only one of Cambodia’s eight mobile operators presently using the service, others have expressed interest.

Hello plans to hold preliminary discussions with Refresh, according to its Chief Executive Officer Simon Perkins.

He said that while he’s interested in the technology, he does have questions about its viability. Most importantly, he wondered if consumers were ready to give up such a popular method of topping up their mobile accounts.

“I think it’s complimentary to scratch cards,” he said of Refresh’s offering, “but it’s not going to replace scratch cards for a long, long time.”

Phnom Penh Post

PHNOM PENH, May 27, 2011 (Xinhua via COMTEX) -- A well-known local firm, Overseas Cambodia Investment Corporation (OCIC), said Friday the firm has received approval-in-principle from Prime Minister Hun Sen to develop a new satellite city in Phnom Penh's Chroy Changvar peninsula.

"Prime Minister Hun Sen has already given the green light for the OCIC to develop the new town, now we're working with the Phnom Penh municipality in order to reach an official agreement,"Pung Kheav Se, president of Canadia bank, the country's third largest bank, and chairman of OCIC, which is the developer of the current Diamond Island City.

The would-be new town dubbed the Chroy Changvar, or "City of the Future" project will cover the area of 387 hectares in Russei Keo district's Prek Leap area, just across Cambodia-Japan Friendship Bridge (Chroy Changvar Bridge) from the central Phnom Penh.

When this new mega-project comes online, it will be the fifth satellite city project in Phnom Penh. The other four developing satellite cities are Camko City, Grand Phnom Penh International City, Koh Pich or Diamond Island City, and Boeung Kak Town.

Pung Kheav Se said that the expected new city would consists of upscale development of residential units, condominiums, commercial venues, shopping malls, financial centers, hotels, recreational facilities, schools, hospitals, park, and a multi-purpose national stadium.

It will take from 10 to 15 years to complete with the estimated investment of 3 billion U.S. dollars.

He declined to disclose where the sources of the capital for the development come from.

The development of new towns is the government's strategy to meet the growing economy and the population growth.

Phnom Penh is currently residing with about 1.5 million people.

It is estimated that the growth is about 20 percent year on year, according to the city hall.

THE fire at June Textile Factory will result in a claim of about US$16 million for a domestic insurance firm, according to General Insurance Association of Cambodia Chairman Chhay Rattanak.

The garment factory in Phnom Penh’s Sen Sok district had employed some 4,000 workers, until it caught fire on March 31.

The claim would be based on the company’s assessment of its loses, but according to a preliminary estimate, it would be between $15 million and $16 million, said Chhay Rattanak.

“The amount will not be a burden on the local company, as they have reinsured with a foreign partner,” he said. Chhay Rattank declined to name the Cambodian insurance firm yesterday.

“Our [GIAC] regulations do not allow a local insurance company to handle this large an amount themselves, as they don’t have enough ability to pay a big claim such as this – this is defined by the law to keep the industry growing,” he said.

Ministry of Economy and Finance Industry Division Head In Meatra said yesterday Cambodia’s laws require a local company reinsure in certain cases with a partner abroad, to avoid risk and keep the industry growing.

“A company in any country in the world cannot handle risk entirely on its own, requiring them to reinsure,” he said.

It is thought June Textiles was insured by Campubank Lonpac Insurance Plc, but officials from the insurance company declined to comment yesterday.

June Textile Director Albert Teoh declined to discuss the name of the insurance company, or the amount of loses yesterday.

“We cannot quantify,” he said. “There are a lot of losses. It should take months to complete the assessment.”

It will also take many months before the factory can resume operations, he added.

Forte Insurance General Manager Youk Chamreounrith said it was common practice in the domestic insurance industry to reinsure with reputable foreign partners to spread risk.

“We don’t want to keep the risk on our own, so we spread it to reinsurers, and they spread risk to their partners as well, complying with international best practices,” he said.

Chhay Rattanak said claims across the industry would increase this year compared to 2010, especially from property insurance.

However, he said he was optimistic about the overall growth of the industry in Cambodia, saying increased claims were not expected to cause severe impact.

“We expect to keep growing at 20 percent each year – the MEF is careful, and strictly control [the industry],” he said.

GIAC statistics show premium revenue increase by 24 percent year-on-year in 2010 to $24.9 million.

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.”

Phnom Penh Post

Cambodia and China sign trade promotion co-operation. Cambodian Ministry of Commerce and China Council for the Promotion of International Trade (CCPIT) on Tuesday signed a Memorandum of Understanding on the development of bilateral trade.
 

The MoU was inked between Cambodian Minister of Commerce Cham Prasidh and Wan Jifei, visiting Chairman of CCPIT and president of China Chamber of International Commerce.

Speaking before the signing ceremony, Cham Prasidh said the agreement will be useful for Cambodia to strengthen and expand trade cooperation with China.

“As Cambodia and China have good relations in all levels ranging from the two countries’ governments to business people and people, I believe that Cambodia and China will be able to achieve the bi-lateral trade volume of US$2.5B in Y 2012,” he said.

The minister has suggested China to help encourage Chinese investors and people to purchase Cambodian agricultural products such as rice, corn, cassava and rubber in order to fulfill the expected trade target in Y 2012.

Meanwhile, Wan Jifei said that the 2 countries’ cooperation in terms of trade and investment has a lot of room to grow.

He added that through the agreement, the CCPIT will encourage more Chinese investors to come to Cambodia, and will arrange more meetings between the two countries’ business people, and will organize trade fairs in China or in Cambodia.

Wan Jifei stressed that currently, the exports of Cambodian products to China are done mostly by the third country such as Vietnam or Thailand. “This is the reason that Cambodia’s exports to China are far fewer than those China’s exports to Cambodia because the 3rd country buys products from Cambodia and exports to China,”he said, adding “so, to re-balance the 2 countries’ trade, it’s necessary that Cambodian and Chinese business people have to meet more often in order to bridge direct trade between the 2 countries.”

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

Live Trading News

Cambodia's iconic Central Market, or Psah Thmay, in Phnom Penh will reopen on Wednesday after seven years of renovations.

This is the first time the market has been renovated since it was built in 1937, when the country was under French colonial rule.

The French Development Agency's Eric Beugnot Radio Australia's Connect Asia program the building is seen as an important economic hub for the people of Phnom Penh.

"There are more than 3,000 merchants in this market. It is a central place and it is important to recreate as some economic environment to stimulate the economy in the centre of this town, this capital," he said.

"And then have some side effects with tourism, as tourism is one of the four pillars of economic development of Cambodia."

The Central Market sells a vast array of products - from fruit and vegetables to meat and rice, clothes, pirated DVDs, books, stationery, electronics, and tourist trinkets.

Mr Beugnot says the market was renovated in stages.

He says a key challenge for the $US8 million project was to convince thousands of stallholders that they would get their stall space back once work was finished.

Australian Network News

Cambodian Prime Minister Hun Sen meets here today with a delegation for International Trade Promotion Council of China led by its President Mr. Wan Jiffei.

China sees Cambodia as one of the potential trade and investment partners among the Association of Southeast Asian Nations (ASEAN) and pledges to boost closer economic ties between the two countries, said a senior Chinese official on Tuesday.

During a meeting with Cambodian Prime Minister Hun Sen, Wan Jifei, visiting chairman of China Council for the Promotion of International Trade and president of China Chamber of International Commerce, said that his visit to Cambodia was to boost closer cooperation between China and Cambodia on trade and investment.

He has brought with a number of large Chinese companies to explore trade and investment opportunity in Cambodia.

"China is pleased to encourage Chinese investors to Cambodia in order to help Cambodia in its efforts for national development,"he said.

Meanwhile, Prime Minister Hun Sen said, "To date, China is the largest investor in Cambodia," and that most of Chinese investments here are in infrastructure development, hydro-power dams, mineral resources exploration, irrigation system, and garment industry.

"These investment projects are very vital for sustainable and long-term development of Cambodian economy," he added.

According to the report from the Council for the Development of Cambodia, China is the largest investor in Cambodia with the accumulative investment of 8 billion U.S. dollars by the end of 2010.

Hun Sen said that Cambodia would try to boost bilateral trade with China to 2.5 billion U.S. dollars in 2012 from 1.4 billion U. S. dollars in 2010.

Wan Jifei will also hold meeting with Cambodian Minister of Commerce Cham Prasidh and officials at Cambodian chamber of commerce on Tuesday afternoon on trade and investment cooperation opportunity.

Source: Xinhua

CAMBODIA has again reiterated its keen interest to become one of the main suppliers of high-quality rice for Brunei and has made formal discussions with the relevant authority here, said the outgoing Cambodian ambassador to Brunei yesterday.

In December last year, His Excellency Nan Sy told The Brunei Times that Cambodia, one of the Southeast Asian countries relying on agriculture sector to boost its economy, was keen interest to export high-quality rice to Brunei.

He told the paper again yesterday on the sidelines of a farewell reception that the two countries must establish bilateral cooperation in the area of agriculture and tourism in the near future.

The Ambassador, who has completed his five-year term in the country since his appointment in 2006, explained that agriculture has been the most important sector in Cambodia and the nation could become a main supplier of the Sultanate's staple food.

Sy said that the agricultural sector contributes 85 per cent to Cambodia's economy, the remaining contributions are received from the tourism sector and mining industry.

"We do know that Brunei import vegetables, fruits and rice from some of the countries in Asean. So that's why since we are an agricultural nation, Cambodia is ready to supply (agricultural products) to Brunei,"

Although other details were not divulged, Sy said that "a discussion for the cooperation had been made".

Cambodia, a country with more than 14 million population, has been enjoying a close affinity with the Sultanate which has been providing scholarships as well as information and technology training assistance to Cambodian students and government officers.

The ambassador said the state visit by His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam to Cambodia in 2007 had heightened the cooperation between the two nations and had opened the path for bilateral cooperation such as technical assistance in oil and gas industry as well as education.

"I would also like to take this opportunity to thank His Majesty's government for what they have done for the students of Cambodia. His Majesty granted scholarships to Cambodia's poor students to come to visit UBD and also to study religious studies at the Universiti Islam Sultan Sharif Ali (Unissa)."

Both states established diplomatic relations on June 9, 1992, which saw bilateral visits by leaders and government officials, and has since enjoyed bilateral cooperation which covers a number of areas including defence, trade and education.

The outgoing Ambassador yesterday hosted a farewell reception from 3.45pm to 9pm at the embassy's building in the capital

Scheduled to leave on May 29, Sy is expected to attend a farewell audience with His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam before departing the Sultanate.

Invited to the reception yesterday were cabinet ministers, foreign diplomats, senior government officials and his personal acquaintances.

The Brunei Times

Written by Simon Marks

India isn't the only country with problems

 

Roaming the streets as a motorcycle taxi driver in Dangkao district on the edge of Phnom Penh, Ek Sovannara is lucky to earn US$2.50 a day. But his aspirations once stretched much further.
 

In 2005 he was presented with an opportunity to borrow US$500 from Credit Microfinance Institution, a firm established by the Christian charity World Relief US in 1993, to set up a small food stall in Trapaing Krasaing commune where crowds of garment workers pass on their way to work. His decision that day to take the money would stay with him for years.
 

Since then, borrowing more and more from private lenders to pay back microlenders, he has fallen into a complicated web of debt now so severe that he is considering selling his house and about 50 square meters of land, together worth around US$6,000.  Though he has managed to pay back some of what he borrowed, his business ceased turning a profit two months ago. After successive borrowing to repay other loans, Sovannara still owes US$1,520 to Credit Microfinance Institution and a further US$400 to seven private moneylenders.
 

Sovannara, 39, is far from alone in his battle with debt. From its nascent days in the mid-1990s, Cambodia now has more than a million families with a microcredit loan in a population of 14 million people. That number is growing fast. Total outstanding loans as of the end of the first quarter amounted to US$711.8 million, an almost 10 percent increase over the previous quarter.
 

Like many others in his village, he has been approached by both private moneylenders and licensed microfinance institutions that hand out small loans with few strings attached, offering anywhere between US$50 and US$2,000.
 

Private lenders often allow borrowers to pay back the formal lenders, who in return agree to provide their clients with more credit. A lack of available credit history has also produced cases where clients have taken loans from more than one microfinance institution at the same time.
 

It is hard to know if this scenario is representative of the broader microcredit sector. Only licensed microfinance institutions are obliged to report on loan defaults, while smaller, registered institutions do not.  According to figures from the Cambodia Microfinance Association, non-performing loans among licensed institutions were calculated to be just 0.99 percent in the first three months of the year.
 

Defaults on loans appear to be even lower. At Chamroeun Microfinance, defaults on loans amounted to just 0.01 percent in 2010 while at Hatta Kaksekar Ltd, which started offering micro-loans as an NGO in 1994 and became a licensed MFI in 2004, defaults on loans was just 0.2 percent in 2010.
 

Microfinance institutions "have invested in improving systems and there are higher levels of control than before," said John Brinsden, vice president of Acleda Bank, the country's largest microcredit lender. He added that commercial banks in Cambodia were beginning to look at many licensed institutions as "serious peers" in the financial services industry.
 

Nonetheless, microfinance institutions admit that loan officers need more training to assess borrowers' creditworthiness and analysts say high levels of debt are a growing problem.
 

As Cambodia's microfinance sector has established itself, particularly over the last five years, a plethora of institutions have flooded into the market. Meanwhile dozens of non-governmental organizations and private moneylenders have also sought a piece of the action.
 

"In difficult times I took money from private moneylenders to pay back the loans I borrowed from the microfinance institutions," said Sovannara, who now relies on his wife’s job in a nearby garment factory as well as his meager income from the motorcycle taxi service. "I feel scared I will lose my home as so many people in my village lost their house to debt problems."
 

The scenario being played out in Sovannara's village in Trapaing Krasaing commune -- a tight-knit community where strife in the quest to earn a living is shared -- is at times dismal.  Both poverty and crippling debt levels loom over the heads of many here. By day, credit officers from some of Cambodia's 27 licensed microfinance institutions travel round on motorbikes looking for new clients and collecting outstanding debts.
 

While acknowledging instances of high debt levels, those in the industry say that most microfinance institutions are largely healthy and have stringent policies on only handing out loans to those with viable incomes.  Still, Chan Mach, general manager of Credit Microfinance Institution, which has a loan portfolio of US$35 million in micro-loans, making it the country's fifth largest microcredit institution, said he was aware of the problems facing the microfinance sector.
 

"The main concern in the microfinance sector in Cambodia is over indebtedness," he said, acknowledging that he had identified cases where loans his institution had made were being repaid by overlapping loans from other institutions or private lenders. "We need to commit ourselves to revise the policy, to guide our staff about the loan assessment."
 

Mach said Credit Microfinance Institution plans to conduct research with its clients to find out exactly how many of them have overlapping loans. To combat the problem, he said his institution is also giving training to its clients in family budgeting, saving techniques and debt management.
 

Hout Ieng Tong, general manager at Hatta Kaksekar Ltd, said that some microfinance institutions had problems with their credit officers' level of training and doubted the purpose of handing out loans of as little as US$100.
 

"To do some business here you must have some capital...otherwise you cannot do the business," he added. "I think the microfinance that lend with small amount, maybe it doesn't help the client. What can you do to a business with US$50 or US$100?"
 

Tong said that 10 percent, or US$1.5 million of total revenues at HKL, is spent on training staff every year to ensure that all employees are capable of carrying out robust loan assessments.
 

However, while less than 1 percent of microloans are considered non-performing, analysts say that number would be much higher if private lenders did not prevent borrowers from defaulting with microfinance institutions.
 

 The National Bank of Cambodia says it is aware of the risks facing the microfinance sector and will include an entire chapter on how to ensure the industry's strength in its financial sector development strategy for 2011 to 2020, to be completed shortly.
 

"We will try to find a solution and a road map in order to strengthen the microfinance institutions," said Ngoun Sokha, director general of the National Bank of Cambodia. She said that part of the strategy would be to encourage MFIs to inform borrowers of the benefits of taking money from formal lenders--lower interest rates and more flexibility--rather than those which operate outside central bank regulation.
 

A credit bureau, which is due to be launched by the end of the year, will also help MFIs to better target suitable borrowers.
 

 The circumstances there have drawn critics to accuse microfinance institutions of handing out loans with little regard for the ability of borrowers to make repayments.  Analysts say that as the microfinance sector has grown its policy has come to be guided by a desire for profits rather than for reducing poverty.
 

 "When a borrower has defaulted, the collateral land most often end up with the private lender, who has paid off the MFI," said Jan Ovesen, a professor of cultural anthropology at Uppsala University in Sweden, who has completed extensive research on microcredit lending in Cambodia. "We also have examples of private lenders taking MFI loans."
 

Ovesen said that research in Cambodia had shown that borrowers would take a private loan for a couple of days in order to pay the microcredit loan, because when the loan is paid according to schedule, the borrower is eligible for a new one. This scenario has brought about what she described as "predatory lending" among both microfinance institutions and private lenders in Cambodia. 

Asia Sentinel