Vietnamese businesses have made a foray into the Cambodian market, with billions of dollars pledged at an investment conference in HCM City last week.
The event was co-chaired by Vietnamese prime minister Nguyen Tan Dung and his Cambodian counterpart Hun Sen and co-hosted by the Vietnamese Ministry of Planning and Investment (MPI) and the Cambodian Development Council (CDC). Both Cambodian and Vietnamese officials at the conference said opportunities in Cambodia were great for Vietnamese investors.
At the conference, Cambodia's government licensed a number of Vietnamese businesses to invest in fertiliser production, banking-financial services, bauxite exploration and exploitation and farm produce processing.
The fertiliser joint-venture between Vietnam's Five Star Group (90 percent) and the Cambodian Investment and Development Company (10 percent) will develop a $65 million plant in Somrothom Commune, Kean Svay District, Kandal Province. The plant will produce 350,000 tonnes of NPK and micro-organic fertilisers per year to serve agricultural production in Cambodia and regional countries.
Cambodia's government licensed Kamadheim Joint Venture Co to develop a $75 million plant to produce sugar, ethanol and power in Kratie Province while C&V Group will pour $37.2 million into a rubber project to develop a plantation on 7,000 hectares in Kraitier Province's Sampo District.
Cambodia's government also awarded a license to Vietnam Na¬tional Coal and Mineral Industries Group (Vinacomin) to survey bauxite mines in Moudoul Kiri Province bordering Vietnam's Dak Nong Province. As planned, the project will be invested with billions of dollars.
Vietnamese businesses have invested in 63 projects in Cambodia with capital of nearly $900 million, making Vietnam among the top three foreign investors in
Cambodia. Most projects have run well, especially in forestry, agriculture, mining, telecommunications, banking and insurance. Two-way trade has increased significantly in recent years, reaching $l.7 billion in 2008, up 40 percent against 2007.
However, the two countries have not fully tapped their great potential for expanding investment and trade cooperation. A number of Vietnamese businesses have not developed plans to increase operations in this market.
The two government leaders welcomed the joint initiative to host the conference as a practical move to promote bilateral cooperation in investment and trade.
Cambodian prime minister Hun Sen said Cambodia was calling for foreign investment into agro forestry, industry, infrastructure, product processing for exports, mining and tourism. He said the Royal government had offered incentives to attract Vietnamese investors, and signed agreements on trade, tourism, energy and maritime transport with Vietnam.
Cambodia will create a favourable investment environment for Vietnamese businesses to operate in the country, Hun Sen assured prime minister Nguyen Tan Dung and representatives of some 600 businesses attending the event..
Dung Hailed the efficiency- of Vietnamese-invested projects in Cambodia but said the results have not yet matched the potential of both countries and had not lived up to expectations.
He recalled high-level talks and meetings between the two countries' top leaders who had agreed to take additional measures to broaden cooperative ties. He vowed to raise two-way trade to $2 billion next year and increase Vietnamese investment in Cambodia to $6 billion in the coming years.
Dung said corporations like Vietnam Airlines, the Bank for Investment and Development of Vietnam, the Vietnam Rubber Group, Vinacomin, PetroVietnam, Electricity of Vietnam and Vinafood had developed large projects in Cambodia. If these projects are carried out well, the investment capital will reach $6 billion.
Dung pointed out advantages and said the two countries could support each other in development. Cambodia has a high demand for cooperation in farm produce processing (rubber, sugarcane and wood), power generation, mineral exploration, exploitation and processing, aviation, finance, insurance, banking, telecommunications, oil and gas, fertiliser production and clean energy.
Meanwhile, Vietnam has about 460,000 businesses, many of whom are strong in terms of technology, market development, finance, qualitative human resources and experience. "The Vietnamese government creates favourable conditions for its businesses to operate in Cambodia," Dung said.
He proposed both sides finalise a legal framework to facilitate investment and trade development. He suggested examining and amending the signed agreements, including one on investment protection and promotion, and conducting negotiations and signing new agreements on double tax avoidance, labour cooperation and legal aid.
He said the strong political and diplomatic ties and the long-standing friendship between the two countries would be a firm foundation for boosting cooperation in other areas.
At the conference, MPI and CDC signed a memorandum of understanding on investment promotion. The Vietnamese minister of Industry and Trade and the Cambodian minister of Industry, Mining and Energy signed the minutes of their meeting regarding Bauxite exploration and exploitation in Mondulkiri Province.
BIDV signed a deal to provide financial services to Vietnamese businesses investing in Cambodia. The two PMs also granted a decision to establish an association of Vietnamese investors in Cambodia and investment licenses to a number of Vietnamese businesses.
So far, the two countries have signed over 60 documents on bilateral cooperation. In the coming time, the two sides should perfect the legal framework in favour of stronger investment and trade activities, suggested Dung.
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