Thai Company Weighs Building Cambodia’s First Steel Mill

A Thai company is looking into building Cambodia’s first steel mill, aiming to cash in on the country’s construction boom and send exports from a dedicated seaport in Sihanoukville or Kampot province, according to the Industry Ministry.

Representatives of the company met Industry Minister Cham Prasidh in Phnom Penh on Monday seeking information about the feasibility of a steel plant, according to a post on the ministry’s Facebook page.

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Industry Minister Cham Prasidh, center, meets representatives of a Thai company considering building a steel plant in Cambodia, in a photograph posted to the ministry’s Facebook page on Monday.

The project, if it were to go ahead, would be based in one of Cambodia’s seaside cities, to allow for the import of raw materials for production and exporting, the post says.

The post does not identify the company or detail the size of the potential investment, and ministry spokesmen Oum Sotha and Heng Sokong said they had no further information.

John McGinley, managing partner of investment firm Mekong Strategic Partners, said it would be a challenge to produce steel in Cambodia given the cost and limited supply of electricity, and the shortage of skilled labor.

Mr. McGinley said all of Cambodia’s steel was currently imported, mostly from Vietnam.

“Conducting a feasibility study is a positive step to determine whether Cambodia is competitive or not,” he said. “Thailand and Vietnam all have steel mills. Assuming the demand in Cambodia, why not Cambodia?”

According to the Economy and Finance Ministry, steel imports grew more than 40 percent year-over-year during the first half of last year. Total imports were about 500,000 tons in 2015, the ministry says, and global steel prices are currently hovering at about $300 per ton.

A massive $11 billion deal for a Chinese iron mining and steel production project, including the construction of a railway crossing the country, was signed in December 2012, but the venture has since gone quiet.

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