Describing another step toward Cambodia’s industrialization, Camko Motor Co said yesterday that a finishing plant for Hyundai cars scheduled to open in Koh Kong province later this year may be developed into a full-scale automobile assembly plant within 15 years.
When completed, the factory will receive 3,000 cars a year that have been built in Thailand, and will undertake the final 10 percent of the assembly finishing process in Cambodia, said Lim Visal, the finance director of Camko Motor Co, which is a joint venture of Ly Young Phat Group and the South Korean Hyundai distributor KH Motors.
The factory’s opening had been scheduled for the middle of this year but due to construction difficulties it has been delayed until the end of the year, he said.
The plant, which will employ 100 workers, will not build any complicated parts such as the engine, electrics or suspension, but will rather do tasks like attaching tailgates, he said, adding the company hopes to one day open a full-scale assembly plant, but that it would be a long way off.
“The factory that will open in 2010. It’s not much. It’s smaller than a garment factory but in ten years it will be huge,” he said. The factory’s cars will be sold at several dealerships in Cambodia owned by Camko Motors, the first to open later this year in Siem Reap.
Mr Visal said the project will receive benefits because it will be located in the Neang Kok special economic zone, but would not discuss details. Typically businesses in SEZs have the advantage of long-term leases, easy access to government taxation and custom services and access to onsite infrastructure.
“The government supports our project because they want the assembly factory in Cambodia to diversify the economy,” he said.
He said the company has not decided what Hyundai models will be finished at the shop.
Neou Seiha, senior researcher at the Economic Institute of Cambodia, said he didn’t think domestic or neighboring markets’ demand could support a full-scale assembly plant in Cambodia but that any investment is good.
“The market is limited. I don’t think they could build up the manufacturing of the car assembly as they did with the garment sector. With the garment sector, the demand was from the US,” he said, adding that expanding agricultural processing firms will have success because there are more potential markets.