Economic Zone Seeks High-Tech Investment

A local logistics firm has partnered with a German industrial park developer for a planned special economic zone in Kandal province to combine human skills training with cutting-edge industrial technology to woo high-value investors to Cambodia.

With growth stagnating in the garments sector, which for the past two decades accounted for virtually all manufacturing in the country, the nation has seen steady expansion of higher-end goods production such as electronics over the past five years.

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A car is assembled with automated machines at an industrial plant in Germany in 2015. (Norbert Kaiser/WikiMedia Commons)

However, the vision outlined in the memorandum of understanding (MoU) signed on Monday between Cambodia-based Kerry Worldbridge Logistics and Germany’s InSite Bavaria would take this trend to a new level, introducing the latest “smart factory” technology at the 56-hectare economic zone in Takhmao City.

“In order for German manufacturing and related investment to enter Cambodia successfully, the foundations for their investment need to be laid in time and set up needs to be done according to their modern standards,” said Charles Esterhoy, chief operations officer of Kerry Worldbridge Special Economic Zone.

The factories would combine elements of “Industry 4.0”—automation, smart machines and monitoring systems—along with a skilled workforce trained to operate high-tech systems.

A statement released at the MoU signing said there were plenty of challenges ahead, but the firms were confident they could bring together local companies, foreign investors, universities and training centers.

Hans-Jaochim Heusler, managing director of Bayern International, the foreign trade agency for the German state of Bavaria, was quoted as saying that the hub could serve as a regional model.

“In particular, Bavaria’s SMEs [small- and medium-sized enterprises] are among the world’s leading technology providers in sectors such as mobility, infrastructure, engineering or robotics, but also agriculture and mining,” he said.

Daniel Gottschald, managing director of InSite Bavaria, said Cambodia’s economic zone would be geared toward local industries, such as harvesting technology.

Gordon Peters, a partner at investment and consulting firm Mekong Strategic Partners, said the type of investment the new project was seeking would mark a “new era” for local industries.

“Companies like Minebea and SC Wado have already demonstrated that it is possible to do more advanced manufacturing in Cambodia,” he said of Japanese-owned companies with assembly plants operating in the country.

“I think this is a new area for Cambodia, with large growth potential since this is a trend for manufacturing globally.”

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