Cambodia: Nation wheels out 1st exports of locally made tires

The Phnom Penh Post via Asia News network

December 1, 2021

A local firm’s recent first trial export shipment of tires could be a starting point for a new stage in the diversification of the economy, and bring confidence and stability among rubber growers and investors in Cambodia to another echelon, experts have said.

This maiden consignment by Cart Tire Co., a subsidiary of Sailun International Holding (Hong Kong) Co., represents Cambodia’s first export transaction involving locally made finished tires.

Men Sopheak, CEO of rubber grower and exporter Sopheak Nika Investment Agro-Industrial Plants Co., told The Post on Nov. 21 that the shipment augurs well for the Cambodian rubber sector, raising hopes among growers and investors for a buoyant market.

Cart Tire plans to buy a sizeable share of the natural rubber used at its tire factory from local farmers, he said, adding that historically, virtually the entire production volume of the commodity had been shipped abroad.

“This represents a great starting point. Rubber growers will be at ease since almost 100% of Cambodia’s rubber output had been exported, and now there’s a company out there that invests into processing it into finished goods,” Sopheak said.

Cambodia Chamber of Commerce vice president Lim Heng hailed the development as another turning point for the kingdom, as more new products are incorporated into its export portfolio.

He noted that the company plans to export to a wide range of countries, with a focus on the United States and European markets.

Heng claimed that the firm locally sources 100% of the rubber that it uses, and that it could absorb as much as 50% of local production once its factory is fully operational.

“The progress of the company will not only enhance the reputation of Cambodia’s export products, but also help local investors and rubber growers in terms of market and price,” he said.

He added that tires and other goods made from local rubber could supply the kingdom’s steadily growing roster of auto assembly plants.

Interest by foreign investors in developing the Cambodian automotive industry has gained traction in recent years.

The Council for the Development of Cambodia (CDC) said in a statement on Nov. 12 that it had approved final registration certificates for two such investment projects.

These are RMA Automotive (Cambodia) Co.’s $21 million car and components assembly plant in Pursat Province’s Krakor district, and EM Automobile Co.’s $16.3 million assembly line for trailers and heavy trucks, machinery and components in Koh Kong Province’s Sre Ambel district.

Heng said the recent introduction of new export products signal a gradual shift toward medium and heavy industry, and a departure from a sole reliance on light industry — largely textile-based goods.

Leading a CDC delegation to assess the progress of the then-still under construction Cart Tire facilities on July 1, the council’s secretary general Sok Chenda Sophea affirmed that the company would exclusively buy domestic rubber as raw material in the production of tires.

In its first year, the plant would require about 50,000 tons of rubber, and up to 150,000 tons in the fifth, he said, underlining that this was equivalent to around 43% of total domestic rubber production last year.

Earlier this year, the government approved Cart Tire’s plans to set up the car tire factory on 50ha in the QiLu (Cambodia) Special Economic Zone, with an investment of $350 million.

At the same time, other players are also vying for a slice of the burgeoning market.

For instance, Jiangsu General’s tire factory is scheduled to open in Preah Sihanouk Province in mid-2022. The project involves a capital investment of more than $200 million and is set to have an annual production capacity of up to 6 million tires.