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Overseas Construction Sector Looks to Build Its Cambodian Presence

As huge infrastructure projects set about reshaping Cambodia's landscape, CamBuild, the nation's biggest construction fair, brought together developers, materials manufacturers, contractors, architects and engineers from 28 countries.

Photo: Phnom-plussed: Every day seems to end with a new addition to the Cambodian capital’s skyline. (Shutterstock.com)
Phnom-plussed: Every day seems to end with a new addition to the Cambodian capital's skyline.
Photo: Phnom-plussed: Every day seems to end with a new addition to the Cambodian capital’s skyline. (Shutterstock.com)
Phnom-plussed: Every day seems to end with a new addition to the Cambodian capital's skyline.

Viewed by the country's government as one of the four pillar industries – alongside tourism, clothing exports and agriculture – likely to drive economic growth, Cambodia's construction sector is now attracting a considerable level of overseas investment. Indeed, according to the country's Ministry of Land Management, Urban Planning & Construction, capital investment in the building sector totalled US$3.4 billion in the first half of 2019, a massive 57.6% year-on-year rise.

The truth behind such a statistic is all too easy to see. Evidence of the massive developments underway abound in Phnom Penh, Cambodia's energetic capital, a city set to be transformed by the construction projects already approved. Indeed, several new mixed-use, commercial and residential developments – each valued at $1 billion or more – are rising skyward, while many of the city's ubiquitous tuk-tuk taxis have become mobile advertising hoardings for the real estate sector. Beyond the capital, major road, rail and airport infrastructure projects – many of them funded via China's Belt & Road Initiative – are under construction on a nationwide basis, including a multi-lane highway connecting coastal Sihanoukville to Phnom Penh.

This, then, was the buoyant landscape that provided the backdrop for CamBuild 2019, the ninth iteration of Cambodia's largest international construction, M&E (mechanical and electrical systems) and decoration exhibition. If the surrounding cranescape was lost on anyone, however, the expectation of sustained growth in the construction sector was the defining motif of an opening address by Leang Monirith, Secretary of State for the Ministry of Land Management, Urban Planning & Construction, with his words given added weight by the presence of such big-league exhibitors as Panasonic, Makita, Bosch and Midea.

Not every exhibitor, however, was globally known and overseas-headquartered. Founded 22 years ago, Phnom Penh-based Aruna Technology, however, has had a ringside seat for the onset of the country's construction revolution.

Outlining both his company's evolution and the wider changes reshaping the industry, Technical Director Paul Gager said: "When we first launched, we focused on irrigation mapping and flood-protection surveying for government projects. Now, though, we specialise more in drone-mapping and modelling for commercial and public-sector projects via the use of highly accurate 3D technology that can quickly and effectively cover large areas.

"Over the years, we've seen the country become very open to overseas investment and that has definitely played a huge role in the way construction has taken off over the past five-to-seven years. While the major projects are still primarily in Phnom Penh or Siem Reap, there are also some large tourism projects underway along the coast."

Another Phnom Penh-based business was System Precast Beton (SPB), which claimed to be the first local company to deploy advanced technology in the production of pre-cast and pre-stressed beams, girders and blocks. Explaining just what led him to launch the business, Yann Frouart, the company's French-born Chief Executive, said: "We started eight years ago when a client wanted to construct 20 buildings in Sihanoukville. As a construction guy, I thought I could improve on the quality and production efficiency of the materials used to build big projects here.

"In fact, our pre-cast products use 20% less concrete than conventional suppliers and use peel foam instead of cement. This reduces costs, makes them faster to assemble and allows architects to be more creative."

Given the number of mainland construction firms and suppliers investing aggressively in Cambodia, particularly in Phnom Penh and Sihanoukville, it was perhaps no real surprise that they comprised the largest single overseas national presence at this year's CamBuild. Among the many to make the 5,000km round trip was Sincen, a Zhejiang province-based manufacturer of intelligent water pumps.

Explaining the rationale behind the company's presence, Sourcing Consultant Kevin Chen said: "We have a factory in Wenling where we manufacture all our pumps. As we comply with all Chinese and EU standards, we currently export to about 60 countries. This, though, is our first time in Cambodia. We had to come, however, as everyone is talking about this market right now."

A fellow member of the extensive Chinese delegation was the Andeli Group, a Zhejiang-based manufacturer of electrical safety appliances, including circuit breakers and transfer switches. Introducing the company, International Sales Consultant Bella Gan said: "Our home city – Yueqing – is known as China's Electrical City as many companies based there specialise in electrical products. For our part, we have a number of international certifications in place, which allow us to supply on a worldwide basis. In fact, our success in the export markets has led us to open an office and a sales showroom in Dubai.

"Typically, we attend a lot of shows throughout Europe, China and India, but we are now committed to doing more in Southeast Asia. We have not been to Cambodia before and we've been surprised by how competitive the market is and at the sheer number of Chinese exhibitors taking part in this event."

Photo: SPB’s cost-effective pre-cast product range.
SPB's cost-effective pre-cast product range.
Photo: SPB’s cost-effective pre-cast product range.
SPB's cost-effective pre-cast product range.
Photo: Thermobreak’s home-foam solutions.
Thermobreak's home-foam solutions.
Photo: Thermobreak’s home-foam solutions.
Thermobreak's home-foam solutions.

The allure of the Cambodia market, however, has not just attracted China-based businesses. As proof of this, the showfloor was dotted with representatives from companies across Asia, including exhibitors from Singapore, India, Japan and, in the case of the Cong Bang Corporation (CBC), Vietnam.

Founded in Ho Chi Minh City in 2008, the company is a specialist in the thermal insulation and acoustic underlay sectors and now has offices in Hanoi, Danang and Phnom Penh. In Vietnam, Cambodia and Laos, it is also the national distributor for Japan's Sekisui Foam International, with the company particularly focusing on the Thermobreak and Softlon brands.

Explaining what had led the company to launch a dedicated Cambodia office, Vice-director Nguyen Huu Phuoc said: "We decided to open in Phnom Penh three years ago purely on the back of the volume of enquiries about our products we were getting from local businesses. Since then, we have been a primary supplier for a number of commercial projects in Phnom Penh, several luxury hotel developments in Siem Reap and a couple of airports and hospitals.

"To be honest, there are so many projects underway in Cambodia, with our local contacts having a tendency to move from firm to firm, that it's easy to lose touch. The good thing about shows like this is that we can catch up with them, while also meeting up with developers, contractors and consultants who are not yet familiar with our product range."

Representing Singapore, meanwhile, was Oliver Ho & Associates. Sensing an opportunity, some two years ago the quantity surveying and technical safety consultancy opened its Phnom Penh office, although its initial involvement with Cambodia dates back to 2014. Among the projects it has worked on to date are the Phnom Penh Special Economic Zone and the BKK 1 residential tower. More recently, it has been project managing the city's new Department of Taxation offices, with construction work on the 32-storey building having begun only last month.

Detailing the role the company is playing in the country's mammoth development programme, Marketing Manager Joel Sheras said: "Given the ever-increasing number of construction projects being approved across the country, the government is keen to ensure that they are all legally compliant and adhere to all the relevant quality and safety standards.

"The problem they are facing, though, is that all the overseas developers and contractors want to apply their own standards. As a result, Cambodia is looking to Singapore – a small Asian country that grew quickly, while enforcing rigorous building standards – as a possible model, which is where our expertise comes in."

Among those flying the flag for India was Meridian Natural Stones, a Bangalore-based business with a speciality in beautifying buildings through the use of imported premium materials. To this end, the company, which started exporting to Cambodia in 2015, manufactures, supplies and installs pillars, balustrades and architraves, all crafted in its own Udaipur workshops in green-and-white marble from its own quarries.

Assessing the value of the local market, Chief Executive Siddarth Vishwanath said: "The potential here is simply mind-blowing, but a lot of the investment, so far, has been from China rather than India. For my part, I'm looking for a local partner to take on installation responsibilities. At the moment, we have spare capacity in our factory and there is definitely a demand for our products here."

Perhaps one sign of just how rapidly the country's construction sector is maturing was the presence of Kotobuki SEA, a 95-year-old Japanese firm with a specialty in theatre and stadium seating. Explaining why he had chosen to exhibit at CamBuild, company President Yuji Machida said: "We design and engineer seating for sports stadiums in Japan, and for auditoriums, lecture theatres, concert halls, studios and airports.

"Cambodia, though, is changing very quickly. As we have a regional office and manufacturing facilities in Vietnam, it's a market we've been able to stay close to. As a result, we have been appointed by the government to work on its new auditorium."

Photo: The India pavilion: Home to many building beautifiers.
The India pavilion: Home to many building beautifiers.
Photo: The India pavilion: Home to many building beautifiers.
The India pavilion: Home to many building beautifiers.
Photo: Kotobuki SEA: Stand-up sit-down merchants.
Kotobuki SEA: Stand-up sit-down merchants.
Photo: Kotobuki SEA: Stand-up sit-down merchants.
Kotobuki SEA: Stand-up sit-down merchants.

The 2019 edition of CamBuild took place from 18-20 September at the Diamond Island Exhibition & Convention Centre (DIECC) in Phnom Penh.

Geoff de Freitas, Special Correspondent, Phnom Penh

Content provided by Picture: HKTDC Research
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