Cambodian Manufacturing Sector Sees $18.56 Billion Investment Surge In 2023
In 2023, the Cambodian manufacturing sector experienced significant growth, with total investment reaching USD $18.56 billion, marking a 11.2 per cent increase from 2022. This was highlighted by the Ministry of Industry, Science, Technology, and Innovation (MISTI) during its annual meeting to outline the ministry’s work achievements in 2023 and strategic work orientation for 2024, held from February 20-21, 2024.
H.E. Hem Vandy, the Minister of Industry, Science, Technology and Innovation, emphasised the sector's development and its focus on diversification, environmental responsibility, and economic integration, while speaking at the MISTI annual meeting.
Vandy noted that Cambodia currently boasts 2,125 heavy-duty factories nationwide, creating over 1 million jobs. Despite the closure of 98 factories in 2023, the opening of 241 new establishments in the same year meant Cambodia still saw a net increase of 143 factories, which was a 7.21 per cent rise compared to 2022.
The minister stated that the USD $18.56 billion investment made into Cambodia in 2023 reflected an 11.24 per cent increase from the previous year. Concurrently, production volume surged to USD $16.36 billion, a USD $531 million increase (3.35 per cent) from 2022. Vandy added that the Cambodian economy will continue to grow in 2024, expecting to achieve a growth rate of around 6.6 per cent, supported by several key economic sectors, including the industrial (manufacturing) sector.
The anticipated growth trend for the manufacturing sector will be approximately 8.5 per cent, compared to 7.7 per cent in 2023. This growth is attributed to the expected recovery of the garment sub-sector, while the non-garment manufacturing sub-sector continues to maintain strong growth. The construction sub-sector, on the other hand, will continue to experience slow growth.
Supporting Small And Medium Enterprises In Cambodia
In regard to promoting small and medium enterprises (SMEs), MISTI reported that it facilitated the establishment of 5,328 new SMEs and renewed 5,158 SME licences in 2023.
"These efforts demonstrate the ministry's commitment to entrepreneurship development and foster a conducive environment for business growth," said Vandy.
Improving Access To Clean Water In Phnom Penh
The ministry reported making significant strides in its production of clean water for both residential and industrial use:
- Nationwide production and supply of clean water reached more than 461 million cubic metres, reflecting an increase of about 16 per cent from 2022.
- By the end of 2023, the Phnom Penh Water Supply Authority (PPWSA) and private operators had connected a total of 1,307,810 water supply lines, expanding the water supply network's length from 3.067 to 30.351 kilometres. This has provided access to clean water for 6,519 villages out of a total of 10,173 service areas.
In 2023, five clean water infrastructure projects were completed, two of which were financed by Japan (amounting to approximately USD $50.7 million), while the other three were concessional financing projects from development partners (totaling a cost of around USD $414.9 million).
Building Quality Production In Cambodia
In 2023, MISTI established 36 new standards through the Institute of Standards of Cambodia (ISC), bringing the total number of standards in Cambodia to 1,216. These standards provide technical specifications for products, processes, production, and services supporting business growth, particularly by enhancing production efficiency, product quality, consumer safety, public health, and trade promotion at the national, regional, and international levels.
Additionally, the Ministry provided 966 metrology services (i.e. services that concern testing and calibrating measurement instruments to national standards), covering 39,238 metric instruments and packaging goods.
"The Ministry's accreditation body continues to play an important role in supporting domestic and international trade by reducing business costs, trade barriers, and sanitary and phytosanitary barriers," stated Vandy.
He added that significant progress has been made in utilising information technology to improve work efficiency and promote the provision of public services online.
Progress And Future Outlook Since Establishing The National Institute of Science, Technology, and Innovation (NISTI)
Since the establishment of the National Institute of Science, Technology, and Innovation (NISTI) in 2020, the ministry has launched various initiatives to promote the economic diversification and the further advancement of science, technology and innovation in Cambodia, including the development of a national roadmap, research agenda, and guidelines.
Vandy shared that MISTI has been involved in the management and evaluation of science, technology, and innovation policies, as well as the organisation of training courses and seminars in the field. The ministry plans to organise more national events, including the second National Day of Science, Technology, and Innovation.
MISTI will also participate in the 85th ASEAN Committee Meeting on Science, Technology, and Innovation, as well as other regional and international events that align with the government’s Pentagonal Strategy-Phase I.
Under this national development strategy, the Cambodian government is poised to allocate nearly USD $800 million towards key policy programs in 2024. These programs will encompass various sectors, including health, vocational and technical training, social protection, informal economy integration, and agricultural support.