The Kingdom is ready to serve as a stepping stone for Canadian businesses

Poovenraj Kanagaraj

As trade relationship grows, more opportunities open up

Canada’s bilateral relationship with Cambodia has spanned many decades.

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Exports from Canada into Cambodia in 2018 stood at $78 million, a significant increase in comparison with 2017, when the export value was at $51 million.

Both countries have shared a trading relationship that includes food and rubber-based products, leather and fur-based goods, textiles as well as electrical items.

Over the last few years, Canadian based businesses have flourished in the Kingdom evidently, with prominent names such as ABA Bank, Manulife and Reitman making a name for themselves.

In the middle of this year, the Ministry of Commerce has stated that Canada’s largest women’s apparel retailer Reitman’s will expand its garment order from Cambodia for the 2019 to  2020 period, which will be worth up to $91 million.

Secretary of State from the Ministry of Commerce, Ok Boung stated that this was a sign of the growing bilateral trade relationship between both countries with the Garment Manufacturing Association of Cambodia (GMAC) President Van Sou Ieng pointing out that Canada was one of the largest markets for Cambodia’s garment industry.

The ministry’s reform in the garment sector has been praised by the Canadian government because it will help to facilitate more investments to come into the Kingdom.

Canada-based Angkor Resources Corp on the other hand had announced in late October that it has raised $1 million to finance its Cambodia Block VIII oil and gas licence.

The outgoing Ambassador of Canada to Cambodia Donica Pottie earlier this month showed Canada’s commitment to improving developing countries’ economies – and this included Cambodia.

Attracting more Canadian businesses into the Kingdom.

With the collaboration between a number of Canadian businesspeople in Phnom Penh has led to providing more opportunities for other Canadian companies to link with local businesses and this led to the establishment of the Canadian Chamber of Commerce (CanCham) in Cambodia four years ago.

However, while these Canadian-based businesses have established themselves, current CanCham President Frederic Proulx says there is still room for more businesses from Canada to make a presence in Cambodia.

“Cambodia with its young population and having one of the best growth domestic product rates in the region currently at 7 percent for the last decade makes the country suitable for businesses to build a presence for their products and services in South East Asia,” Proulx says.

The chamber currently has 65 members that are based in Phnom Penh with another 200 members working from overseas.                      They hope to reach a higher number next year by increasing the numbers of internal members to 200  with a further 500 overseas.

“Our mission is to show businesses in Canada that Cambodia is a well-positioned platform for them to get a good start,” Proulx says.

He refers to countries such as Vietnam as too big, which would result in a higher cost of productivity while Myanmar and Laos are not ready to take on a large number of businesses yet.

“There is traction for talent here and the banking system here is way better than how it used be and the National Bank of Canada’s success with ABA Bank is a testament to the Kingdom’s growth,” he added.

According to Proulx, most existing Canadian businesses are in the field of banking, finance and garments.

However, he believes that is not enough now. He goes on to say that because Cambodia is a country that is open for businesses and with the right facilities to support that vision, more and more companies should take the chance to ride on that opportunity.

He believes that because Canada is the hub for artificial intelligence around the world, both governments along with  CanCham can help to establish a technology sector in Cambodia with high salaries and close the gap in skills as well as to work together in other ways for their mutual good.

Frederic Proulx
President
Canadian Chamber of Commerce, Cambodia

Governents joint work

 

“We try to work with delegations from Canada from provinces such as Alberta for education and with Quebec and Montreal for banking for instance,” says Proulx.

He pointed out that with a big number of members of the chamber involved in the education line, there should be more school developers from Canada coming to the Kingdom because the education sector is in need of more schools.

The discussions Proulx says could prove to be a part of the education process for businesses that are not familiar with the region and Cambodia in particular. Canada in the past has aided the Kingdom in building a parliamentary system and the relationship ever since has grown to benefit one another.

During a bilateral meeting between Ministry of Commerce Minister Pan Sorasak and Donica Pottie last year, the Cambodian government had also expressed their efforts to support the textile sector via further exploration of the Canadian market.

The Canadian embassy in return stated that that they will examine the possibilities in aiding Canadian investors to invest in the country for the development of the textile industry and modernising the agriculture sector in the Kingdom.

 

Challenges ahead

 

“Most businesses would want to function in an environment with less risk,” says Proulx, who notes that is usually the general concern of most businesses. However, he goes on to say it’s all about the execution.

A skills gap has been a looming issue among businesses in Cambodia with the need to bring in foreign expertise for certain fields. Proulx, while agreeing on the gap that is existent in the Kingdom, says companies coming in should also understand the landscape and bring in the needed coaching.

Another matter that has been among a concern for Canadian businesses is the unresolved everything but  arms trade issue.

“It is bound to slow down investment and insecurity is bad for business. However that does not prevent Cambodia from having other opportunities,” Proulx says, highlighting the Kingdom as the best place to prototype new ideas.

 

Clarity needed

 

The chamber does, however, point out that clarity is needed for a better process when it comes to registering businesses in the country. Because there is a  lot of potential for entities from Canada to make their way here, it is important for new businesses to have guidance from different government authorities.

“Our goal is to bring back the embassy and that will help our work with the Canadian government because next year is going to be a big year in increasing the number of Canadian members in the country ,” the chairman says.

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