France-Cambodia: A desire to go further in bilateral relations

On the second day of the France-Cambodia Business Forum, the event kicked off with a speech by the French Ambassador to Cambodia, His Excellency Jacques Pellet, who expressed his satisfaction at the organisation of the Forum.

The first day, he said, was an opportunity to meet the authorities, while the second was a chance to immerse oneself in the various major themes, thanks to the professionals present in the Kingdom.

A wide range of subjects prompted the Ambassador to assert Cambodia's added value as an active country in the region, but also certain difficulties: "We need to look at the limits of our presence and the difficulties we may encounter".

"We are in a competitive environment, there is no price for France. Cambodia has always managed to have a wide range of partnerships, and thanks to its geostrategic position, is a partner for many countries.”

Mr Roux de Bézieux, Chairman of the Alliance des Patronats Français (APF) and Honorary Chairman of the MEDEF, who had travelled all the way from France for the occasion, followed this opening speech. In particular, he was able to meet the Cambodian authorities, with whom "discussions were very fruitful".

"I met people who were very pro-business and good listeners. I was struck by the unusual ease of access, even though I've visited a lot of countries. But here in Cambodia, it's very good news to have politicians who listen to entrepreneurs.

A desire to cooperate and strengthen ties between France and Cambodia, particularly in anticipation of the 20th Francophonie Summit in 2026, which could be held in the Kingdom.

Mr Roux de Bézieux, Chairman of the Alliance des Patronats Français (APF) and Honorary Chairman of the MEDEF

Cambodia's economic and legal environment and prospects

Mr Ly-Batallan, Head of the Economic Department and Economic Counsellor at the French Embassy in Cambodia, and Mr Thierry Gougy, Senior Partner at DFDL Cambodia, addressed two major issues for future investors in Cambodia.

Taking a structural rather than a cyclical approach, Mr Ly Batallan outlined the Kingdom's future prospects in terms of the various sectors of the Cambodian economy, as well as the different types of investment.

He said: "Private investment has taken off enormously, in line with the government's policy of relying on the private sector to finance projects that structure the economy. But there will be a limit to this.”

He also added an important point about the economy, namely tourism: "Tourism is an important point in the economy: we can see that since the crisis, tourism has picked up again, but slowly and differently. In the first five months of the year, we had over 22% more international arrivals for the three airports, and ticket sales at Angkor rose by 37% in the first five months of the year.

"What I'd like to emphasise is that the Cambodian market has real prospects. Here, we have both the stability and the development to do business. If you have the know-how, come here. If you have the investment capacity, come here", he concluded, adding that it was important to take all the country's specific features into account.

Thierry Gougy went on to talk about the general business climate, the investment law and administrative and tax practices.

Indeed, Cambodia has an open economic policy and a favourable climate for foreign investors, who enjoy the same conditions as Cambodian investors, with the exception of very few restrictions such as: the principle of non-discrimination, including economic compensation measures in the event of investment losses, the ban on nationalisation of foreign investments, free pricing, free transfer of funds and currency convertibility, and the creation of special economic zones (SEZs).

And as he said: "2030 is tomorrow. The export industries here in Cambodia need to start arming themselves to cope with these requests for information and reporting from the European Union, because the cost of exporting various products from the zone that concerns you is likely to rise quite significantly".

Mr Ly-Batallan, Head of the Economic Department (left) and Economic Advisor to the French Embassy in Cambodia and Mr Thierry Gougy, Senior Partner at DFDL Cambodia (right)

Public and private financing matters in Cambodia

Sandrine Boucher, Regional Director of Agence Française de Développement (AFD) (Cambodia) and Nicolas Hollanders, Managing Director of BRED Bank Cambodia.

AFD's presence is justified by its support for the France team in strengthening links between France and Cambodia, but also by its French expertise, particularly in the sustainable development sector.

The sectoral breakdown of the activity portfolio is as follows: 47% in water and sanitation, 31% in sustainable development, 14% in energy, 7% in vocational training and 1% in other sectors. The majority of donors are multilateral, accounting for 58% of public investment funding in 2021. Sandrine Bouchet confided:

"We are witnessing a changing dynamic among donors".

She added: "Beyond that, AFD works in partnership with other donors, in particular with the European Union delegation, as it provides access to grants that can be useful to supplement the loan financing we provide for project support, technical assistance and training. AFD also works with the Asian Development Bank, which enables us to operate in the vocational training sector.

"In a very favourable context of consolidation of relations between France and the Kingdom, AFD's volume of operations in Cambodia is therefore in line with this positive dynamic which is of interest to French players. 80% of the portfolio involved a private French player. In terms of contracts for the period 2019 - 2023, €200 million were put out to international tender and 86% of these contracts were won by a French company", Sandrine Boucher concluded.

Finally, according to Nicolas Hollanders: "It's a dynamic market, but also a competitive one. In the banking sector, there are more than 58 commercial banks in Cambodia, which shows the interest in the Kingdom.

Round tables: opportunities and challenges

Round table on tourism

Tourism is a statégic sector for the country's economy, and the debate took place alongside Mr Charles-Henri Chevet, General Manager of the Sofitel Phnom Penh Phokeethra (moderator), Mr Jacques Guichandut, General Manager of All Dreams and Mr Vichit Ith, CEO of the Cambodia Tourism Board.

The Kingdom is currently experiencing a moderate recovery following growth in 2019 and the heavy impact of the health crisis, but it is still ranked among the Top Countries for gastronomy, monuments and other tourist attractions.

Charles-Henri Chevet, General Manager of the Sofitel Phnom Penh Phokeethra, Jacques Guichandut and Vichit Ith (from left to right)

The Kingdom attracts visitors for its authenticity, its history, its traditions and its community. These qualities were highlighted by Jacques Guichandut, who presented the "Destination Cambodia 2024" campaign launched in January to attract more visitors from France and Europe:

"Cambodia is not seen as a destination, but as an extension," he explained.

A campaign that reflects a fundamental concept in the tourism sector: image. A key element that changes tourists' perception of the country. Before visiting Cambodia, outsiders thought of the Kingdom in terms of the Angkor temples, history and the Khmer Rouge. However, after visiting Cambodia and leaving it, he was impressed by the way of life, the Khmer community, the positive image of the country and its safety.

It's an image that he hopes to develop, particularly with the forthcoming Francophonie Summit in Cambodia in 2026, which would boost the destination's appeal.

For his part, Mr Vichit Ith developed the case of Cambodia in terms of its competitive positioning. A situation that reveals the Kingdom as a country lagging behind its competitors such as Thailand and Singapore.

In his words: "Cambodia has substantial assets to develop and promote".

The Cambodia Tourism Board (CTB) will be the main institution responsible for promoting the tourism industry, working in concert with all private operators, the Ministry of Tourism and the relevant ministries," explained Mr Vichit Ith.

Round table on construction

Debate led by professionals and managers of major projects in Cambodia. We were joined by Michel Cassagnes (moderator), Managing Director of Archetype, Serge Pak, Managing Director of Béton Block and Pave, Amine Alain Guillot, Project Director at VINCI Construction Grands Projets and Stéphane Bigorre, Managing Director of LBL International.

Michel Cassagnes, Serge Pak, Amine Alain Guillot and Stéphane Bigorre (left to right)

In 2019, there were around 4,000 permits per year for a total value of USD 11 billion, up 35% on 2018. After the complicated years between 2020 and 2022 due to the health crisis, a return to growth was reaffirmed in 2023 with USD 5.5 billion. This year, with regard to the first quarter of 2024, 830 permits have been issued, representing an investment of USD 790 million.

To overcome the problem of human resources, we are in favour of a system similar to the apprenticeship tax. We are already sharing our experience through training courses for our employees, as well as organising visits to our sites for students, for example", as Serge Park explained alongside the other panellists.

Round table on transport

Finally, there was a round table discussion moderated by Cyril Girot, CEO of Cambodia Airports, and accompanied by Margaux Dusart, National Director of CMA-CGM and Vissoth Nam, CEO of Air Asia Cambodia. The discussion focused on land, sea and air infrastructure, particularly in view of Cambodia's location at the crossroads of Laos, Vietnam and Thailand.

Cyril Girot, Margaux Dusart and de Vissoth Nam (left to right)

In the maritime sector, the CMA CGM Group, leader in container transport, is number 3 in the world with more than 400 agencies worldwide, 155,000 employees, a fleet of 620 vessels and represents more than 277 services on all continents. The company has been present in Cambodia for 12 years, with three direct services to Singapore, Malaysia, Vietnam and now China.

According to Margaux Dusart: "From 2024 to May, we have seen an increase in exports in terms of value, the country is growing and is open to private investment, with China accounting for 67% of investment in 2023.

"Cambodia is keen to diversify its partners and its export products, with textiles being the most important, and is trying to expand into electronics, agriculture and automobiles.”

She added: "Today, in Cambodia, the current challenge for the shipping industry is digital products. There is no real ecosystem between the logistics parties, because they are not connected to the terminal information systems. This prevents the real-time tracking that companies are so keen to see. And there are also problems with the depth of the Mekong during the dry season.

As far as air infrastructure is concerned, Air Asia Cambodia is proving to be the low-cost airline that is thinking big and far ahead, particularly in view of their annual growth rate of 10 million passengers a year from 200 different nationalities.

Nevertheless, the major challenge to their development is the expectations of travellers and the upturn in tourism.

Beyond that, Vissoth Nam remains very positive: "We are very proud of our results and the experience we offer. We've seen families who had never travelled get on a plane for the first time. That's very significant."

The second day of the France-Cambodia 2024 Business Forum shed a great deal of light on the thinking of foreign investors in various sectors. Discussions with local professionals only served to increase the interest of these investors in coming to the Kingdom to develop their activities.