Vietnamese businesses thrive in Cambodia despite Covid-19
Since 2009, Metfone (Viettel Cambodge) or the Vietnam Rubber group have been hailed as pioneers in the exploration of the Cambodian market. Then came MBBank in 2011.
These companies have left their mark on Cambodia’s telecommunications, agriculture and finance sectors by establishing effective strategic cooperation.
When Metfone started operating in Cambodia in 2009 with an investment fund of $ 150.3 million, the telecommunications giant was an unknown name in the market. Soon after, the company helped Cambodia’s telecommunications industry flourish. At the end of 2020, Metfone’s cumulative data subscriptions accounted for 75% of total subscriptions in Cambodia.
In the banking sector, the Investment and Development Bank of Vietnam and Sacombank established branches in Cambodia and quickly found success. At the end of 2016, the Investment and Development Bank of Cambodia had a registered capital of $ 100 million, making it the sixth largest bank in Cambodia. Around the same time, the total assets of Sacombank Cambodia reached $ 172.3 million. The appearance of more Vietnamese banks in Cambodia shows that investments from Vietnam will continue to increase.
In January 2014, dairy giant Vinamilk was allowed to co-invest in milk factories in Cambodia with Angkor Dairy Products Company Limited. In March 2017, Vinamilk increased its investment to $ 1 million, becoming the owner of Angkor Dairy Products Co. With a total investment to date of $ 28.7 million. Vinamilk is the only Vietnamese dairy company in Cambodia to date, with an annual export turnover of around $ 50 million.
Vietnamese companies in Cambodia are also aiming to increase cooperation. The year 2021 marks 10 years since Metfone and the Vietnamese Commercial Joint Stock Bank in Cambodia established strategic cooperation.
The two companies also organized social activities such as resettlement assistance for Vietnamese Cambodians in Kampong province and assistance for Vietnamese Cambodians and Cambodians affected by natural disasters and pandemics.
A market with immense potential
Cambodia has significant land resources and needs long-term cooperation in aquaculture and agricultural processing. Supply shortages of some products create benefits for Vietnamese companies investing in Cambodia. Other sectors with development potential in Cambodia include tourism, transport and logistics, construction, education and technical training.
Vietnam is an essential link in the North-South, East-West and South economic corridors with many integral roads such as Da Nang – Laos – northeast of Thailand – Bangkok, Vung Tau-Ho Chi Minh City – Phnom Penh – Siem Reap- Bangkok, Ca Mau-Kien Giang – Cambodia-Bangkok coastal, and Hai Phong – Hanoi – Lao Cai – Kunming. This creates immense opportunities for Vietnamese businesses to speed up trade, reduce costs and increase profits for other businesses in Cambodia and the region.
Vietnam is currently the fifth investor among 70 countries and territories that have invested in Cambodia. Vietnamese companies are mainly active in agriculture (rubber and dairy products), fertilizer production, health, banking, aviation and telecommunications. In 2020 alone, around 220 Vietnamese business projects were approved by the Cambodian government with a total capital of approximately US $ 5.3 billion, representing 15.2% of foreign investment projects in Cambodia.
Vietnam’s investment in Cambodia has boosted socio-economic development in both countries and created jobs for thousands of workers. According to the Vietnam Trade Office in Cambodia, Vietnam-Cambodia trade turnover reached $ 1.331 billion in the first two months of 2021, an increase of 64% over the same period in 2020. Vietnam recorded a trade surplus of around $ 125 million with Cambodia. the same time.
Investment opportunities despite the Covid-19 pandemic
Despite the impact of the Covid-19 pandemic, bilateral trade between Vietnam and Cambodia reached $ 5.3 billion in 2020, with huge efforts on both sides. At the same time, Vietnamese businesses continued to prosper and create jobs for workers in Cambodia.
Regarding export activities, Vinamilk continues to seek new opportunities in potential markets despite the pandemic. Angkor Milk, the subsidiary of Vinamilk in Cambodia, continues to record double-digit growth. In 2020, the Cambodian market recorded positive results, with revenue growth of 19%.
Assessing the development potential in the face of the complex and unpredictable circumstances of Covid-19 in Cambodia, Metfone CEO Phung Van Cuong said the company could achieve 7-8% growth in 2021, although this is a huge challenge.
In 2020, Metfone aimed to lead the digital services market in Cambodia, focusing on data subscription transfer and digital wallet subscription to create its own digital ecology.
Director of Agribank Viet Nam in Cambodia, Chairman of Viet Nam Business Club in Cambodia Nguyen Thanh, Dung said Vietnamese businesses in Cambodia have quickly adapted to the pandemic, maintained normal business operations and used the situation to seek new investment opportunities. Vietnam Times