Govt ready to enforce mobile-phone tariffs

MPTC Minister So Khun says he would ‘forget’ free market

TELECOMS Minister So Khun said the government would enforce minimum tariffs in the mobile phone sector if operators could not come to an agreement on prices.

Contradicting comments by Ministry of Posts and Telecommunications Director Mao Chakrya in recent weeks that minimum tariffs would only be set with the full agreement of the private sector, the minister said Tuesday that the government would put aside its commitment to free-market principles in the sector to prevent price-dumping by new entrants from undermining existing investments.

“We will forget the free market for a while. We will fix the price,” he said. “We provide the right for them [to operate in a free market], but they don’t want to use this right; they want to fight each other, so the government needs to intervene.”

The government had called for operators to submit information regarding the costs of making calls on their networks by October 15 in order to draft a prakas, or edict, on tariffs in the sector. The deadline was extended to October 30 after only four operators complied by the initial deadline.

In Brief: New $30m development

JAPANESE developer Arakawa Co broke ground Thursday on a US$30 million apartment building in Phnom Penh’s Russei Keo district overlooking the Tonle Sap river. The 16-storey Bellevue Apartment will have 143 residential apartments, a high-tech security system, fitness centre, tennis court, swimming pool and rooftop garden Arakawa Chief Executive Officer Alex Yasumoto said at the event. The apartments will be rented rather than sold, and rental prices will be based on the market at the time, he added. The market is expected to recover once a recovery from the economic crisis kicks in.

Mong Reththy inks livestock deal with UK

Agreement seals plans to build $27m meat and dairy farm

CAMBODIA’S Mong Reththy Group (MRG) and British farming firm Lordswood Farm Ltd have inked a deal to set up a US$27 million joint-venture cow and goat farm in Cambodia.

The deal was announced Wednesday by EBLEX, a British government-backed organisation that brokered the deal between the two countries.
The farm will produce beef, dairy and goat products for the local market.

Spokespeople for the Mong Reththy Group and EBLEX declined to disclose the ownership split for the farm, though Mong Reththy, the president of the eponymous conglomerate, told the Post in August it would be divided evenly between the two partners.


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It was a very important deal for the Cambodian food sector.

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EBLEX’s Export Manager Jean-Pierre Garnier said the deal was an important step for Cambodia to move from being a meat-importing nation to potentially exporting in the future.

Garment companies record lowest exports drop this year

Ministry of Commerce figures show 15.15pc drop in September

GARMENT exports declined at their slowest pace this year in September, down 15.15 percent year on year to US$189.7 million, figures released by the Ministry of Commerce late Tuesday showed.

The decline is the smallest year-on-year monthly drop since last December, when exports fell 13.64 percent to $222.1 million, and comes as competitor Bangladesh said September was its worst month for garment exports in six years.

Cambodia’s garment exports have fallen on a year-on-year basis every month since last November, when they fell 0.89 percent to $218.3 million, dragged down by falling consumer spending in the key US market, which accounts for around 70 percent of total garment exports. Exports also fell in July and September last year, before the shockwaves of the US financial meltdown began to be felt around the world, but gained in every other month in 2008.

Garment exports have now fallen 21.66 percent over the first nine months of the year to $1.78 billion.

Garment Manufacturers Association of Cambodia Secretary General Ken Loo said there was not enough data to predict whether the impact of the global economic recession on the sector was beginning to bottom out, and that the next three months will be critical.

Trade with Hong Kong dismal up to end of Q3

Monday, 16 November 2009 15:01 May Kunmakara

Data shows bilateral trade fell nearly 25 percent up to end of September, but Cambodia increases garment exports to SAR

BILATERAL trade between Cambodia and Hong Kong fell 24.6 percent year on year in the first nine months of 2009 to US$364 million, figures released Friday by the Hong Kong Trade Development Council (HKTDC) show.

Cambodia’s exports to the Chinese special autonomous region grew 37.7 percent over the period, but accounted for just 2.9 percent of trade between the two countries at $10.7 million.

Although imports from Hong Kong fell 25.6 percent over the nine months, the Kingdom was still left with a $342.6 million trade deficit.

Most trade between the two countries consisted of re-exports. Around half of Cambodia’s exports to Hong Kong were re-exported, and just $16.1 million worth of goods imported from Hong Kong were actually produced there.

HKTDC Indochina Director Tina Phan said by email Friday that there was plenty of scope for Cambodian producers to use Hong Kong as an export base for their products.

“Cambodian companies can use the Hong Kong platform to further export their products to both Hong Kong and to other markets,” she said. “This we have not seen much" to date.

Cambodia gets further boost from APEC poll

SINGAPORE
CAMBODIA has the second-strongest case for inclusion in the Asia Pacific Economic Cooperation forum (APEC), behind only India, according to an informal poll of business leaders from member countries in Singapore on Saturday.

The South Asian economic powerhouse was rated as having the strongest case for inclusion of the dozen nations that are understood to have expressed an interest in joining APEC when a moratorium on new members expires next year.

“Cambodia should be a member; it deserves to be,” said Dr Donald Gordon, executive director of The Riley Institute in the United States.
Six other countries are also viewed as having a strong case – Laos, Myanmar, Macau, Mongolia, Pakistan and Sri Lanka.

Corporate heads from APEC’s current 21 member economies were asked to rate these aspirants according to which they felt had the best credentials.

MFI deposits rise during Q3

Monday, 16 November 2009 15:00 Nguon Sovan

Amret and Sathapana say perceptions must change to realise deposit potential

DEPOSITS grew in the third quarter at the two Cambodian microfinance institutions (MFIs) licensed to hold savings, even as key sector figures said MFIs were struggling to overcome perceptions among Cambodians that their money was better off at home or in a registered bank.

Deposits at Amret, the second largest MFI by outstanding loans, grew 60 percent to US$1.6 million quarter on quarter in the three months ended September amid a promotional campaign, figures from the Cambodian Microfinance Association (CMA) show. Deposits at Sathapana, the third biggest microfinance lender, rose 12 percent to $2.47 million over the same period.

Stocks Roundu: Vimpelcom hits latest year high

Monday, 16 November 2009 15:00 Steve Finch

VIMPELCOM, the parent of Cambodian mobile operator Beeline, continued its strong run on the New York Stock Exchange last week as it reached another year high Friday.

The stock climbed 1.66 percent to close at US$20.87 in Friday trade, a 6.92 percent jump over a week earlier, after Vimplecom’s General Director Alexander Torbakhov said Thursday that a recent purchase of Golden Telecom, which operates Kyivstar, had boosted business. The Moscow-based operator announced an interim dividend the previous week.

Vimplecom, which last month entered the Laos mobile sector, remains locked in a legal dispute with Cambodia’s leading mobile operator Mobitel over accusations of price dumping and Beeline’s alleged illegal use of the latter’s prefixes as special investigators continue to look into the case.

In Brief: Nautisco deals for $13m

Monday, 16 November 2009 15:00 Chun Sophal

NAUTISCO Seafood Manufacturing Ltd said Thursday it had secured US$13 million in contracts to supply fresh and processed shrimp to international and domestic markets for next year. Japanese and South Korean buyers had ordered around 1,200 tonnes and restaurants and hotels in Cambodia around 120 tonnes, Nautisco President Pov Sambath said. Cambodian Hotel Association President Luu Meng, who is also co-owner of Phnom Penh’s Thalias hospitality group, said the US$5 million plant, built in 2008, urged restaurants and hotels in the association to support the factory.

In Brief: Canadia, BIDC sign deal

Monday, 16 November 2009 15:00 Nathan Green

CANADIA Bank signed a memorandum of understanding on Saturday with the Vietnamese-owned Bank for Investment and Development of Cambodia to cooperate on lending and investment activities. Canadia Bank CEO Charles Vann said the deal cleared the way for the two banks to provide syndicated loans, including a US$33 million loan due to be signed with the Rural Development Bank to help farmers and rice millers improve rice quality for domestic and export markets. BIDC provided $28 million; Canadia Bank $3 million; and the Foreign Trade Bank, which is part owned by Canadia Bank, $2 million.

Rice harvest on target for 7m tonnes: govt

AGRICULTURE Minister Chan Sarun told the Post Monday that Cambodia would meet its target rice harvest of 7 million tonnes this year despite damage wrought by Typhoon Ketsana, which struck Cambodia and Vietnam at the end of September.

“From observing the … fields so far, the unharvested rice looks good – there’s no insect damage and no more rainfall that could cause flooding,” he said.

With 2.331 million hectares under cultivation, he added, the Kingdom had also surpassed the original target of 2.264 million hectares.

Chan Sarun said that Ketsana did not adversely affect this year’s rice production because it mostly affected mountainous areas where there was little cultivation, including Ratanakkiri and Mondulkiri provinces.


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We will succeed in our plan to produce 7 million tonnes of rice, or more, this year.

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The tropical storm had damaged between 2 and 4 percent of Cambodia’s total paddy, he said, about 40,000 hectares.

MFIs record surging growth in loans during third quarte

Sector issues 5.46 percent more loans in Q3 while cutting NPLs

OUTSTANDING loans at Cambodia’s microfinance institutions (MFIs) rose 5.46 percent during the third quarter to US$448.1 million, showed figures released Thursday by the Cambodian Microfinance Association (CMA).

CMA data, which included the country’s 21 MFIs and small loans from ACLEDA Bank, also showed that non-performing loans (NPLs) fell 1.9 percentage points over the period to 1.48 percent, or $8.7 million.

CMA President Hout Ieng Tong attributed the increase in lending, which followed a 2.7 percent drop in outstanding loans in the second quarter, to a combination of positive developments.

“We have seen the economic situation begin to recover, and people have begun to expand their businesses, so they need capital again,” he said. “The slash of interest rates of between 0.2 and 0.5 percentage points by MFIs in early September was also a factor.”

Structural problems causing garment woes: World Bank

Forecasting 2 percent contraction in GDP this year, Washington-based lender says Cambodian garment sector has seen United States market share slide

THE World Bank pointed towards structural problems in Cambodia’s garment industry Wednesday as it released a report predicting the country’s economy would shrink 2 percent this year.

Speaking by videoconference from Washington, Ivailo Izvorski, the lead author of the bank’s latest East Asia and Pacific Update, titled “Transforming the Rebound into Recovery”, said Cambodia’s market share in the key United States garment market had fallen from 3.2 percent last year to 2.8 percent in mid-2009.

All countries in the region had been hit hard as US demand for garments plummeted in the midst of the economic and financial crisis, but Cambodia was hit hardest.

Trade with Vietnam sees slight rebound

Latest official figures show slide in trade eased in September but was still down 28.6 percent

Falling exports
Cambodia’s exports to Vietnam in the first nine months were less than for the first seven months of last year:

2009

Up to end Sept - $130m
Up to end Aug - $123m
Up to end July - $110m

2008

Up to end July - $141m
Source: Vietnam Embassy in Phnom PenhCAMBODIA’S bilateral trade with neighbouring Vietnam recovered slightly in September, official figures from the Vietnamese embassy showed Thursday, although total volume was still down an annualised 22.8 percent.

Trade between the two countries fell to US$98 million, the figures showed, from $127 million in September last year, which represented a 28.6 percent decline during the first three quarters compared with the same period in 2008.

KOGID blames bad weather for failing to meet corn target

Pailin official says local farmers are holding out for better prices, though.

SOUTH Korean company KOGID Cambodia Co has missed its target of buying 70,000 tonnes of red corn in the second half of 2009, citing roads made unusable by heavy rain.

KOGID Director Ung Savuth said Sunday the company was now likely to be able to buy only half the targeted amount.

Battambang and Pailin provinces were the worst affected areas, he said, causing the company to downgrade its planned purchases there from 20,000 tonnes to just 6,000 tonnes.

“It is hard for us to buy corn from farmers and to transport that corn because most of the roads in the area have been cut off or seriously damaged by rainfall,” Ung Savuth said.

Border closure would hurt Thai traders more, PM says

Hun Sen cites huge trade deficit with neighbouring Thailand.

PRIME Minister Hun Sen warned Thailand Sunday that Cambodia would stop buying its products if Bangkok followed through with a threat made Friday to close its border with the Kingdom.

Hun Sen said Cambodia had not initiated the possibility of sealing crossings between the two countries, suggesting that Thailand had a lot more to lose should relations sour further.

“If Thailand forces itself [to close the border gates], Cambodia will stop buying their products – we have goods imported from other countries,” Hun Sen said at a press conference at Phnom Penh International Airport after returning from First Mekong-Japan summit in Tokyo.

Bilateral trade between the two countries reached about US$2 billion last year, Hun Sen added.

In Brief: Battambang's first mall

BATTAMBANG’s first shopping mall will open its doors in early 2010, Battambang Supermarket Managing Director Phou Puy said Sunday. Construction of the US$9 million, four-storey retail complex on National Road 5 in O’char commune was 85 percent complete. Marketing of the retail space, which includes air-conditioning and elevators, had not yet started, he said. The complex has taken one-and-a-half years to build. Battambang Provincial Hall Finance Director Uy Liv said the mall would create jobs and boost the local economy. SOEUN SAY

Posco aiming to finish $300m project by 2013

South Korean firm to start selling units after Khmer New Year.

SOUTH Korean builder Posco E&C said Monday it will begin selling units in its three-tower Star River apartment complex development following Khmer New Year in advance of a planned completion date of October 2013.

The US$300 million, 237,500-square-metre riverfront complex, located in Chamkarmon district’s Tonle Bassac commune, will consist of 1,000 apartments in three apartment blocks – one 45 storeys tall and the other two 42 storeys each, Project Manager Hee-Seob Shin said Monday.

Posco Marketing Manager Jang Jung Hee said the development would target the wealthiest 1 percent of Cambodians but added that Koreans had already shown a lot of interest in the project.

“Our research shows that more than 90 percent of apartments and condos sold in Cambodia are bought by Cambodian people, but in this project many Korean people have also shown an interest,” he said. “Many Koreans like Posco projects. Whenever we have a project, many Koreans follow.”