Economy: Swedish giant IKEA considers the possibility of setting up in Cambodia

Swedish furniture giant IKEA is looking into the possibility of setting up in Cambodia, marking its first foray into the Kingdom's economic landscape.

Last Wednesday, H.E. Chea Vuthy, Secretary General of the Council for the Development of Cambodia (CDC), met with a delegation led by Giafar Safaverdi, IKEA's Managing Director for Southeast Asia.

During the meeting, Mr Vuthy highlighted Cambodia's attractive investment policies, including favourable laws, stability and excellent transport infrastructure, and encouraged IKEA to move quickly to take advantage of these opportunities.

Global strategy

This development is part of IKEA's global strategy of aggressive international expansion. The company already has operations in neighbouring countries such as Thailand, Vietnam, Malaysia and Singapore. Cambodia's growing reputation as a manufacturing centre for a variety of export products could encourage IKEA to expand into the country.

Economist Hong Vanak noted that an IKEA factory in Cambodia could significantly increase the value of the country's exports and create jobs while building the capacity of local human resources.

IKEA's interest in Cambodia reflects its commitment to developing markets. The company has successfully implemented similar strategies worldwide, focusing on cost-effective production, innovative logistics and sustainable practices. However, no official decision has yet been announced regarding IKEA's entry into Cambodia.

Benefits

If IKEA decides to invest in Cambodia, the country could benefit in several important ways. IKEA's presence could strengthen Cambodia's production capacity, particularly in furniture and components, which are already seen as potential growth sectors. This is likely to increase the value of Cambodian exports and strengthen the country's position in world trade.

The establishment of IKEA factories or outlets would create many job opportunities for Cambodians, in both skilled and unskilled positions. This would contribute to economic growth and reduce unemployment.

IKEA's investment could lead to training and capacity building initiatives, improving the skills of the local workforce. This initiative is part of Sweden's efforts to support capacity building of the civil service in Cambodia.

Finally, an IKEA investment would strengthen trade links between Cambodia and Sweden, potentially increasing bilateral trade beyond the current modest figures of around $64 million and, by attracting large-scale foreign investment, Cambodia could further diversify its economy, reducing its reliance on traditional sectors such as agriculture and textiles.