The International Business Chamber of Cambodia hosted its 2022 Industry Views & Outlook – the event featured several of Cambodia’s leading industry figures and was introduced by IBC Chairman Paul Clements.
Clements highlighted the strong opportunities Cambodia presented for investors with development organizations predicting the economy to grow over 5% this year after an economically challenging time due to the COVID pandemic.
Across the eight industries highlighted digitalization, return of tourism, and increasing logistics potential were the major opportunities in 2022. The sectors included banking, job creation, insurance, airport & tourism, logistics, agriculture, property, and digital.
Digitization
The digitalization of industry was identified in almost every sector with the Association of Banks Chairman Dr. In Channy acknowledging digitalization was being widely accepted by all consumers.
In Cambodia’s insurance industry CEO of Prudential Cambodia and IBC board member, Sanjay Chakrabarty said digitalization will lead to simpler products powered by seamless sales and service, AI-powered value-added services, and instant claims.
Cambodia Investment Review has previously reported that Prudential Cambodia has earmarked a pivot towards digital insurance, green financing transition, and creating more inclusive insurance offers and distribution channels in the rapidly developing local industry.
Tim Grintal, Account Director of ADA warned that local businesses will need to be harvesting 1st party data and using technology to convert raw data into actionable insights and then impact.
Grintal added the looming 3rd party cookies ban in 2023 will be felt across all industries. “Tracking the right consumer data will become harder and we estimate that it will be more expensive to reach the same KPI’S in terms of marketing goals,” he said.
Return of tourism
The recent devastation of Cambodia’s tourism sector – considered one of Cambodia’s four economic pillars – should see “a slow return” with passenger traffic expected to recover to around 35% of 2019 levels by year-end according to Alun Brun CEO of Phnom Penh International Airports.
Advantages for Cambodia this year include a competitive advantage compared to regional neighbors generated by Cambodia’s vaccine and border policy, domestic tourism growth, and sector consolidation.
“There should also be a revival of the larger markets such as China – however high volatility is expected to continue throughout 2022 – increased by the recent Omicron variant,” he added.
Agriculture & Job Creation
In contrast to Cambodia’s tourism industry, its agriculture sector has seen an increase in both production and total values placed at $18.06 billion in 2021, a 43% increase compared to 2020.
Ratha Chan from Cambodia Partnership for Sustainable Agriculture highlighted the sector had major opportunities in value chain financing (especially for cashew, cassava and rice crops), warehouse and cold chain storage for fresh produce and agro-processing zones.
He added, the new Law on Investment was also cited as a possible opportunity for companies looking to value add products.
Senior Economist of World Bank Sodeth Ly Cambodia said should experience a gradual economic recovery (approximately 4.5% in 2022). However, he added weaker domestic consumption and a subdued services sector will continue to impact the jobs market.
Opportunities include tapping into the high number of female unpaid workers in both city and regional areas as well as the new investment law providing tax advantages for the provision of vocational and skills training to Cambodian workers.
Logistics and supply chains
One of the most highly anticipated areas of growth and development is Cambodia’s potential to become a regional logistics hub for ASEAN – recently buoyed by the announcement of Japanese retailer AEON.
AEON has stated it plans to develop a free trade zone and port that will feature the first bonded warehouse in Cambodia, that will allow importers to store products from abroad without paying duties.
Toro Takei from Nippon Express highlighted Cambodia’s logistics opportunities for storage services, exporting more Cambodian products – such as industrial and agricultural products – and cold chain logistics (predominately for pharmaceutical and fresh or frozen foods).
However, significant holdbacks remain with increasing fuel prices and ultra-high freight costs, he added.
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