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Industry 4.0 to be game changer for Cambodian enterprises
Cambodia-based Kerry Worldbridge Logistics (KWB) and InSITE Bavaria signed an agreement to develop the first German-Cambodian industry and technology cluster at Kerry Worldbridge Special Economic Zone. Khmer Times’ Sok Chan recently spoke to Charles Esterhoy, KWB’s chief operations officer, on the concept of Industry 4.0 and how it will be incorporated into KWB’s special economic zone.
KT: What services are offered to foreign investors in KWB’s 63-hectare free trade and special economic zone (SEZ)?
Mr. Esterhoy: As we are the operator of the SEZ, we will maintain the commitment of a “One Stop Service” to support investments in the SEZ. It is not only about the incentives, but it is about the ease of doing business and access to the government. We will communicate investor concerns to the government – if there are any.
We are able to support investors with local business contacts and ongoing business support, such as QIP [Qualified Investment Project] registration, final business registration, certificate processing, construction permit processing, work permits and labor reporting, staff and factory worker recruitment, services for ongoing reporting, and certificate of origin processing.
KT: Why is KWB’s SEZ different from other SEZs in Cambodia?
Mr. Esterhoy: The other SEZs mostly focus on garment and footwear manufacturing. KWB, however, is beyond that. We are not attracting garment factories, but aim to be and an industrial and technological hub that propels Cambodia to what is called Industry 4.0 manufacturing.
Industry 4.0 manufacturing is all about increasing connectivity of smaller and smaller components. It uses the data collected by physical things, either built products out in the real world, or components within a machine on the production line, to impact how these things themselves are manufactured. The more information that can be gathered by these objects, the more effective the manufacturing process can become.
It also means that the people who work in the industry cluster are all trained with specialized skills – they will not be paid a minimum wage but will receive something much more that that.
In our zone, the investors are encouraged to invest in the workforce and provide strong skills training. Also, workers will be accommodated in dormitories built to international standards, with canteens serving nutritious food.
KT: So how does the concept of Industry 4.0 fit into the memorandum of understanding (MoU) signed between KWB and InSITE Bavaria to develop the first German-Cambodian industry and technology cluster?
Mr. Esterhoy: The concept of Industry 4.0 is propelled by a major German company, but the companies in the value chain can either be Cambodian or Japanese. It is not exclusive to Germany.
We have some programs in the MoU to develop small and medium enterprises, or SMEs, so that they can get access to the industry and technology cluster, or at least to part of it. The purpose of the MoU was also to recognize SMEs in Cambodia.
We will build a training center for SMEs, and they can be coached by a major German manufacturer.
In the very near future, in the concept of Industry 4.0, it is no longer going to be enough to be an expert in one individual field. Rather, the factory workers will need to understand full systems in order to implement true process change. Even if we do achieve the vision of the future – the vision of the “smart factory” – the human workforce will need multiple skills to take on complex manufacturing roles to include implementation, support, and training of these highly advanced, cyber-physical systems.
To pave the way for this, we will build a technology component center and a skills training center for workers.
To be realistic, Cambodia’s present manufacturing level is either at Industry 1.0 or Industry 2.0 stage. It’s going to be a giant leap to get to Industry 4.0 level. For that reason we’re trying to wean Cambodian manufacturing away from the garment sector and pave the way for them to venture into medium and high technology areas.
KT: How many jobs will KWB SEZ be offering directly and indirectly?
Mr. Esterhoy: It depends on the direction we’re moving towards Industry 4.0. In terms of actual jobs, there might not be a lot. But jobs are created by the enterprises in the value chain. In Industry 4.0, the value chain can be anywhere. The concept is decentralization.
For Industry 4.0, cheap labor is not the future – and the actual work and jobs can be anywhere. The idea is that a feedback loop is created between physical things and the digital world. Industry 4.0 will be a game changer for the Cambodian workforce. The human workforce will need multiple skills to take on complex manufacturing roles.
KT: In what technical areas does InSITE Bavaria support KWB?
Mr. Esterhoy: In the MoU, InSITE Bavaria will be infrastructure and technical advisor. KWB has also signed an agreement with Mekong Strategic Partners for the building of a rooftop micro-grid inside the SEZ. By 2020, we hope to generate at least five megawatts of power from the rooftop micro-grid. But the micro-grid will not supply full power to the SEZ. The power supply to the SEZ will be mixed with that from Electricité Du Cambodge [EDC]. Right now, we have about 10 megawatts from EDC.
InSITE Bavaria is also helping us with a feasibility study on the industry and technology cluster. The study will look at how to optimize Cambodian value chains and develop small-and medium- sized companies, using German know-how to make businesses suitable for Cambodian needs.
KT: A stable supply of quality electricity is still a concern for many SEZ operators and investors. How does KWB plan to tackle that?
Mr. Esterhoy: Electricity in Cambodia is still a problem. The issue is no longer the high cost of power. Rather, it is energy security.
High cost does not mean anything if you do not have electricity.
We will be developing a strategic plan for the SEZ’s electricity supply, taking into consideration that enterprises in Industry 4.0 need a stable supply of quality electricity.
Source: http://www.khmertimeskh.com/news/35858/industry-4-0-to-be-game-changer-for-cambodian-enterprises/