Electric gear exports soar 96% in first five months
Electric gear exports soar 96% in first five months
Cambodia raked in $1.253 billion from the export of “electrical, electronic equipment” in the first five months of 2023, up 95.98 per cent year-on-year from $639.600 million and up 33.43 per cent half-on-half from $939.45 million, according to provisional Customs (GDCE) data in “International Merchandise Trade Statistics” bulletins.
These items, corresponding to Chapter 85 of the Harmonised System (HS) of Tariff Nomenclature, comprised the second largest export category for January-May, after only “articles of apparel, knit or crocheted” or Chapter 61, which recorded $1.856 billion in the same period – down 26.11 per cent year-on-year and down 33.40 per cent half-on-half.
Chapter 85 items accounted for 13.649 per cent of the $9.183 billion value of the Kingdom’s total merchandise exports over the five months – compared to 6.795 per cent and $9.412 billion in January-May 2022, as well as 10.348 per cent and $9.079 billion in July-November 2022.
Cambodia Chamber of Commerce vice-president Lim Heng shared his view with The Post on June 26 that Cambodia is on the path of becoming a manufacturing hub for electrical and electronic equipment, and that the uptick in these exports indicates a reduction in the Kingdom’s historically heavy reliance on overseas sales of textile-related items.
For context, the GDCE bulletins show that Cambodia exported a total of $4.079 billion worth of items under chapters 42, 43, 61, 62 and 64 of the HS in January-May 2023, down 21.60 per cent year-on-year and down 24.29 per cent half-on-half.
These chapters are short-titled “articles of leather, animal gut, harness, travel goods” (Ch42), “furskins and artificial fur, manufactures” (Ch43), “articles of apparel, knit or crocheted” (Ch61), “articles of apparel, not knit or crocheted” (Ch62) and “footwear, gaiters and the like” (Ch64).
However, values for other categories of textile-related goods, such as “knitted or crocheted fabrics” (Ch60) and “other made textile articles, sets, worn clothing” (Ch63), were not included in the most recent bulletins, which list just the top 20 export chapters by order of volume in the latest month.
In any case, these chapters tend to be on the lower end of the textile-linked spectrum along with Chapter 43, which just so happened to have its best month in May ($44.439M) since November 2021 ($51.052M). Last month, Chapter 63 fell outside the top 20 for the first time this year.
‘Better shot’
Heng stressed that Cambodia boasts attractive investment laws, a fairly large pool of reasonably-priced yet skilled workers, a diversity of overseas buyers, and preferential trading arrangements with several countries, all of which – in his opinion – are driving up the number of domestic electrical and electronic equipment factories.
“As a result of this export growth, Cambodia will have a better shot at drawing in large-scale companies to set up factories and manufacture heavy machinery with state-of-the-art technology to sell to foreign markets,” he said.
He added that the government is forging ahead with infrastructural and human resource development to accommodate additional large-scale industrial enterprises.
According to the GDCE, in May alone, the Kingdom exported $274.406 million worth of “electrical, electronic equipment”, up 102.4 per cent from $135.560 million in May 2022 (year-on-year), up 22.87 per cent from $223.338 million in November 2022 (half-on-half), up 22.35 per cent from $224.280 million in February 2023 (quarter-on-quarter), and up 13.26 per cent from $242.284 million in April 2023 (month-on-month).
This monthly figure was down 8.06 per cent from the record $298.465 million registered in December 2022, as indicated by GDCE statistics for the 2015-2023 period. The next highest values on record for the aforementioned timeframe are all from this year: $279.672 million (March), $274.406 million (May), $242.284 million (April), $232.824 million (January), and $224.280 million (February).
Chapter 85 represented 14.077 per cent of the $1.949 billion value of the Kingdom’s total exports in May 2023. For comparison, here are the corresponding figures for: May 2022 (7.506%; $1.806B), November 2022 (13.059%; $1.710B), December 2022 (14.738%; $2.025B), February 2023 (13.059%; $1.717B), March 2023 (13.275%; $2.107B) and April 2023 (13.15%; $1.842B).
SEZ projects
In a notice issued at the weekend, the Council for the Development of Cambodia revealed that it has approved final registration certificates for Rongdasheng Industrial Co Ltd, TG-Brother Electronic Lighting Co Ltd and Boxu Crafts Co Ltd, for proposed factories slated to produce items in the “electrical, electronic equipment” category.
The government body noted that the three projects are all to be located in special economic zones (SEZ) of Svay Rieng province, have paid-up capital totalling $12.5 million, and generate an expected 1,815 jobs altogether.
The Ministry of Commerce lists addresses in mainland China for officers of Rongdasheng Industrial and TG-Brother Electronic Lighting. Boxu Crafts, meanwhile, was not found in the ministry’s business registry as of press time.
In a previous interview, Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC) president Te Taingpor remarked that the attractiveness of the Kingdom to investors’ eyes would be even greater if electricity prices were brought down to or below the levels offered in nearby countries.
Lower electricity prices generally mean lower production costs for energy-intensive businesses, which would give them an edge to successfully compete on the international stage, he said.
“Prices for fuel and electricity are key aspects of the appeal to investors, as these are important inputs for manufacturing, along with raw materials and labour. When these rates are stable and low, investors will see opportunities,” Taingpor said.
Still, GDCE statistics revealed that Cambodia in 2022 exported “electrical, electronic equipment” to the tune of $1.998 billion – up 84.83 per cent over 2021 and up 546.86 per cent against 2015 – making up 8.888 per cent of the $22.483 billion registered in total outbound merchandise trade.
Although the GDCE bulletins did not provide figures by importing market, statistics from online platform Trading Economics show that the US encompassed the bulk of the $1.08 billion worth of Cambodian Chapter 85 exports reported for 2021, at $548.03 million or 51 per cent, followed by Thailand ($156.46 million) and Japan ($128.45 million).
For reference, the full title of Chapter 85 is “electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles”.
