Cambodia seeks more Korean funds in textiles
As part of the process to strengthen and widen the base of the economy as the country has entered the fourth quarter of 2022, the Government of Cambodia is seeking to tick all the right boxes, and it includes tourism, textiles exports as well as fresh investments in different sectors.
The Kingdom has urged South Korea to increase its investments in the textile sector, especially in and around the Cambodian capital Phnom Penh.
The request was put forward at a meeting between Khuong Sreng, Governor of Phnom Penh, and Joo Nak-young, Mayor of Gyeongju city of the Republic of Korea, in Phnom Penh on October 18.
The Governor of Phnom Penh said the Royal Government of Cambodia has created favourable conditions for all foreign investors, including those from South Korea.
The Kingdom is striving to create strong interest among South Korean investors in setting up units for production in Cambodia and their shipment to the Korean market. This will also help increase bilateral trade from $549.930 million in January-August 2022, as per the data reported by Customs.
On his part, Joo Nak-young pledged to encourage more Korean investors, particularly from Gyeongju city to invest in textiles in Phnom Penh so as to further strengthen the good relations and cooperation between the two cities and countries.
The value of garment exports from Cambodia to South Korea is at present negligible. The garment trade between the two countries has also not been able to recover from the hammerings it received during the Covid-19 pandemic.
However, Cambodia is putting a lot of weightage on the free trade agreement (FTA) between the two countries, which is set to come to force on December 1, 2022, to strengthen textile investments and relations.
In January-May 2022, Cambodia’s garment exports to South Korea were valued at $79.228 million. Cambodia exported $111.35 million worth of merchandise to South Korea in January-June (H1) this year, which was 22 percent higher than the same period of the previous year.
Bilateral trade between Cambodia and South Korea increased 13.6 percent to $421.33 million, in January-June 2022.
Under the FTA, South Korea has agreed to remove tariffs on 95.6 per cent of products imported from Cambodia, while Cambodia will eliminate duties on 93.8 per cent of imported goods.
In 2021, Cambodia imported $600 million of goods from South Korea, and its exports to the East Asian nation reached $341 million.
According to Fibre2Fashion’s market insight tool TexPro, Cambodia’s export of apparel to South Korea has yet not recovered from the damage of Covid-19.
The Kingdom had exported $167.151 million worth of apparel in 2021, which was below the shipment worth $187.650 million in 2019. In 2020, the export had fallen to $169.716 million. Apparel exports have been valued at $79.228 million in the January-May of this year.
Cambodia’s apparel export to South Korea was 1.51 percent, of its total apparel export of $11.099 billion in 2021. Cambodia’s share was also negligible in South Korea’s import of apparel last year. The north-eastern country had imported 1.60 percent of apparel from Cambodia, out of its total import of $10.467 billion, as per TexPro.
China, Italy, Indonesia, Bangladesh and Myanmar were the top five suppliers for South Korea in 2021.