Cambodian Petrochemical Company and Sinomach China Perfect Machinery Industry Corp jointly announced on Friday to build the first oil refinery in Cambodia and the construction is expected to be completed at the end of 2015.
Zhang Sugang, president of Sinomach China Perfect Machinery Industry Corp, said the oil refinery will cost 2.3 billion U.S. dollars and it will take 36 months to be constructed on the 80- hectare area within the boundary of Preah Sihanouk province and Kampot province.
“When the construction is completed, the plant will be capable to produce 5 million tons of oil a year,” he said after a signing ceremony here.
He said the firm’s decision to invest in Cambodia was thanks to well-developed relationship between China and Cambodia, and Cambodia’s potential for oil industry.
“We believe that when the project comes to fruition, it will greatly contribute to developing Cambodian economy,” he said.
During a signing ceremony on Friday, the Cambodia government signed to grant an oil refinery license to Cambodian Petrochemical Company to build the factory.
The agreement was inked between Cambodian Deputy Prime Minister Sok An, Chairman of Cambodian National Petroleum Authority, and Siv Kong Triv, president of Cambodian Petrochemical Company.
Also, there was a contract signing between Siv Kong Triv and Zhang Sugang on the engineering procurement construction for the factory.
The ceremony was also witnessed by Chinese Ambassador to Cambodia Pan Guangxue.
Mao Chetra, administration chief of Cambodian Petrochemical Company, said the firm would build an oil refinery with the high- and-latest technology that has not been used in Southeast Asian nations.
“The would-be plant will help boost the development of Cambodian economy, increase state’s revenues and generate thousands of jobs,” he said.
Speaking after the ceremony, Sok An said the oil refinery project reflected the progress in developing Cambodian oil and gas sector.
“This also mirrors local and foreign investors’ trust in Cambodian business and political situation,” he said. “When the project is completed, it will greatly contribute to developing economy and reducing poverty in Cambodia.”
Sok An said that currently, Cambodia’s oil demand is more than 1 million tons a year, but the demand will reach 3 or 4 million tons a year in coming years thanks to a steadily growing economic size.
According to the figures recorded by the Ministry of Commerce, the country spent 1.33 billion U.S. dollars to buy 1.35 million tons of oil from Vietnam, Thailand and Singapore in the first ten months of this year.
The country’s seabed is believed to be rich in oil and gas, but exploitation is not made yet.
Sok An said that U.S.’ Chevron has invested about 150 million U. S. dollars for oil and gas exploration in Cambodia’s offshore Block A and it is estimated that the firm needs to invest another 600 million U.S. dollars to exploit oil and gas from the Block.
“But, now, the negotiations between the government and the company have not yet completed on the issue of tax payment,” he said.
Cambodian Government expects that it will earn tax revenues of 200 million U.S. dollars a year from oil and gas sector when oil production begins.
Demand for brand new cars in Cambodia has remarkably increased in 2012 thanks to robust economic growth, enhanced social security and political stability, major automobile dealers said Monday.
“We sold about 800 units this year, up from 500 units last year, ”
Kong Nuon, president of Toyota Cambodia, the exclusive dealer of Japanese brand Toyota, told Xinhua in an interview.
According to Kong Nuon, the country’s new car demands are around 2,000 units a year. Currently, more than a dozen companies in Cambodia have imported brand new cars.
China-made Great Wall brand automobiles also saw good sales this year, said Kan Pisey, general manger of Worldwide Garage, the exclusive importer of the cars from Beijing. “We have seen a steady increase in sales since our presence here in January 2010,” he told Xinhua.”We are new, but due to our promotion and our auto’s good quality, many consumers have switched to use our cars.”
Pisey declined to disclose the number of cars the company has sold this year, citing business confidentiality. “We can say that Cambodia’s car market has ample room for growth, “he said. “We are negotiating with the Beijing-based Great Wall Automobile Manufacturer in order to build an auto assembly plant here.”
An exclusive dealer of the U.S.’Ford brand vehicle in Cambodia said that the firm saw 15 percent rise in sales in 2012. “In fact, demand was really larger than the supply this year. If we had enough cars for customers, the growth would be up by 50 percent, not by 15 percent, but we didn’t have because our manufacturers suffered spare parts shortages resulted from the impacts of a devastated earthquake in Japan and massive flooding in Thailand last year,”said Ngorn Saing, deputy general manager of RM Asia.
He attributed the high demands to good economic performance, increased foreign investors, more newly-opened companies and better living conditions of Cambodian people. “Nowadays, more Cambodian people have begun to invest their money in luxurious and modern things thanks to their improved living conditions,”he said.
Besides brand new cars, the country’s demands for the used cars are about 20,000 units per year.
The impoverished Southeast Asian nation has a population of 14. 5 million. The country’s per capita GDP was 911 U.S. dollars in 2011, up 10 percent from 830 U.S. dollars in 2010, according to the government figures.
The country’s economy is expected to grow by 7 percent to 15.6 billion U.S. dollars in 2012.
Cambodia’s banking sector has maintained strong and steady growth in terms of loans and deposits in 2012 thanks to better economic performance, a central bank’s senior official said Tuesday.
“Our banking system remains robust this year despite economic crisis in Europe and economic slowdown in the United States. These bad situations do not affect our banking sector,” Nguon Sokha, Director General of the National Bank of Cambodia (NBC), which is the regulator of the country’s banking and financial institutions, told Xinhua.
“We see that both loans and deposits have sharply increased this year,” she said.
According to the latest statistics provided by the NBC, the kingdom’s 32 commercial banks have lent 5.49 billion U.S. dollars to private sectors by November 2012, up 30 percent year-on-year.
The loans went mostly to the sectors of trades, real estate, construction and mortgage, agriculture, manufacturing, tourism and services.
On the deposit side, the banks have received 6.02 billion U.S. dollars by November 2012, up 24 percent year-on-year, it said.
Those banks are serving about 1.6 million borrowers and 1.9 million depositors, it added.
Sokha said the increase in lending reflected growing business activities, while the rise in deposits truly mirrored people’s confidence in banking system and political stability.
“We believe that the sector will continue to grow at a similar rate in 2013,” she said.
So Phonnary, executive vice president of Acleda Bank, the country’s largest commercial bank, agreed that the banking sector was strong and healthy this year.
She said Acleda Bank has released the loans of 1.22 billion U.S. dollars as of November this year, up 23 percent year-on-year. At the meantime, it has received the deposits of 1.4 billion U.S. dollars, up 22 percent year-on-year.
“Both loans and deposits have grown very well,” she said. “More importantly, the non-performing loan rate, or bad loan, is very low–only 0.33 percent. This shows good business environment in the country.”
Jang Ki-Sung, Chief Executive Officer of South Korea’s Kookmin Bank Phnom Penh Branch, said Cambodia’s banks have developed rapidly in terms of assets, liabilities and equity and are becoming more competitive and innovative because of new international standard banks’ entrance and the management of the NBC.
“The banks have moved forward from a traditional strategy to an advanced strategy, and several banks have introduced internet and mobile banking, so more Cambodian customers have more chances to access advanced banking products and services with strong trust in the system,” he told Xinhua in an interview.
“This is a positive sign to Cambodian economy and we believe the industry will still continue to grow as public trust to the industry has increased and the country’s political situation is stable,” he said.
“I believe that more foreign investors will come to Cambodia to support the integrated ASEAN economic community in 2015, and trade activities and tourists will continue to rise,” Jang added.
Speaking in a condition of anonymity, a senior Chinese banker said that the banking market in Cambodia will see a great potential in the future, but, for now, the market is still relatively small and there are too many commercial banks.