In a bid to position itself as one of the key investment destinations within ASEAN, Preah Sihanouk province is rapidly transforming into a regional economic powerhouse. 

The ambitious plans were highlighted at a recent Investment December 17 summit, held at the Sokha Hotel. It brought together government officials, business leaders and international investors to discuss the future of Cambodia’s coastal region. 

Spearheaded by the Ministry of Economy and Finance, along with local authorities, the summit marked a pivotal moment in the province’s development as it laid the groundwork for long-term economic growth and sustainability.

Hean Sahib, secretary of state at the finance ministry and chairman of the Investment Promotion Working Group for Preah Sihanouk, opened the summit by emphasising the province’s tremendous potential. 

“Preah Sihanouk is a province with significant potential, a vibrant hub for investment and development within the ASEAN framework,” he said.

“This assertion is underscored by the province’s rapid progress in infrastructure development and advanced technology, while also promoting sustainable development to create a favourable environment for business and investment,” he added.

The summit’s agenda focused on five key sectors aimed at driving economic growth and attracting investors. 

These priority sectors include manufacturing, tourism and hospitality, logistics and transportation, finance and real estate, as well as agriculture and food processing.

Prime Minister Hun Manet launched the “Special Investment Promotion Programme in Preah Sihanouk Province 2024”, on January 31, emphasising the importance of stimulating business, trade and investment activity in Sihanoukville town to promote sustainable development over the medium and long term.

Strategic location and infrastructure development

Preah Sihanouk, located in southwestern Cambodia, is not just an economic hub – it is a prime geographical advantage for businesses seeking to tap into the broader ASEAN market. 

With its rich natural resources, sprawling coastline and proximity to key regional markets, it has become a beacon of growth and development in the region.

Preah Sihanouk hosts 16 special economic zones, five of them operational, housing 270 factories with a total investment of $2.65 billion and a workforce of 94,662. Hong Raksmey

“The province has a population of approximately 310,000 and boasts 32 islands, five reefs, a coastline of 175.81 kilometres, national parks, mangroves, waterfalls and rich biodiversity, making it a prime tourism destination,” said provincial governor Mang Sineth.

He noted that in 2023, the province achieved a total economic output of $1.61 billion, a per capita GDP of $4,602, and an economic growth rate of 4%, with the poverty rate reduced to 1.22%.

One of the most significant factors driving this transformation is the province’s world-class infrastructure. 

Over the past few years, the government has made substantial investments in transportation and logistics, recognising the importance of connectivity to attract international business. 

“The province is already home to a deep-water port, an international airport and national roads that connect it directly to Cambodia’s capital, Phnom Penh,” explained Sineth. 

Furthermore, the Phnom Penh-Sihanoukville Expressway, a major project that has enhanced travel efficiency and access to other parts of the country, is expected to further boost economic activity in the region.

In addition, Phase 1 of the new deep-sea container terminal is currently under construction, with subsequent phases designed to accommodate nearly 100% of global cargo ships. 

This deep-water port will position Preah Sihanouk as a critical logistics hub, not only for Cambodia but for the broader ASEAN region, especially as global trade continues to expand.

The capital, Sihanoukville, is home to several stalled construction projects, known as ‘ghost buildings’. This is being addressed by a special working group. Hong Raksmey

Preah Sihanouk also hosts 16 special economic zones, of which five are operational, housing 270 factories with a total investment of $2.65 billion and a workforce of 94,662. 

Sineth said there are 1,232 small, medium, and craft enterprises with a combined investment of $30.3 million and a workforce of 6,172.

The impact of new US administrative 

Chea Kok Hong, secretariat director of the Inter-ministerial Technical Working Group for the Development and Implementation of the Master Plan to Transform Preah Sihanouk Province into a Model Multi-purpose Special Economic Zone (SEZ), highlighted the influence of global economic shifts, including the impact of incoming US president Donald Trump, on the transfer of industries that will be driven by his proposed tariff plans.

“For Cambodia, which holds a strategic location globally, this shift will provide a strong foundation for production and investment,” Kok Hong said. 

He noted that increased investment and exports have driven structural changes in Cambodia’s economy, with a clear shift towards the industrial and service sectors.

“These sectors bring new opportunities, particularly in vehicle production and assembly, the electric vehicle (EV) sector, agricultural processing for export and especially tourism,” he added.

He emphasised that the master plan recognises the province’s strategic potential, trade agreements and confidence in attracting international investors in logistics and tourism. 

He said over the next 15 years, the plan aims to position Preah Sihanouk as a leading logistics and tourism hub within ASEAN.

One of the development 3D projects in new-established Kampong Saom (KPS) city. Hong Raksmey

The key goals of the master plan include doubling GDP growth to reach twice the national average by 2040, attracting at least $20 billion in private investment and drawing over a million domestic and international tourists annually.

“These achievements will deliver significant economic and social benefits to the people of the province as a whole,” Kok Hong stated.

Preah Sihanouk’s selection for the master plan is driven by its strong infrastructure, including a deep-water port, expressways, an international airport and pristine beaches, all of which offer promising opportunities for investors.

Challenges and Opportunities

While Preah Sihanouk’s growth prospects are undoubtedly strong, there are challenges that need to be addressed. 

Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, pointed out that while the province offers great potential, there are still hurdles that need to be overcome, particularly in governance and licensing. 

He noted that the change in the US presidency represents a geopolitical shift with both positive and negative effects for Cambodia.

“For example, sanctions on China could impact production by Chinese enterprises within China,” Sereyvath explained. 

“If we know how to turn this situation into an opportunity, we can attract the relocation of factories from China to Cambodia, supporting industrial development,” he added.

An investment summit held at the Sokha Hotel on December 17 brought together government officials, business leaders and international investors to discuss the future of Cambodia’s coastal region. Hong Raksmey

He noted that Sihanoukville is well-positioned to benefit from this shift due to its direct connection to the port, a critical factor since industries from China are primarily export-oriented. 

Establishing production facilities near the port reduces logistics costs for manufacturing enterprises.

Sereyvath highlighted efforts to attract investors, including simplified conditions, streamlined documentation and incentives such as tax exemptions of up to 18 years. 

The development focuses on multiple areas, including manufacturing, tourism, duty-free zones and industrial parks which offer one-stop services.

The economist expressed confidence that the December 17 investment summit would attract additional Chinese investors.

He credited the Investment Promotion Committee, which has worked over the past year to provide clear information and alleviate investor concerns.

“In the past, investors were uncertain about where to apply for licenses, prepare documents or secure patents, which caused hesitation. This summit demonstrates that a single committee now offers convenience for investors,” he said.

“For example, when Chinese people are driving, the police often stop them. We need to ask ourselves whether we should eliminate these issues entirely,” he added, stressing the need to improve public services, security, and order while facilitating investor confidence.

A significant concern for Chinese investors, Sereyvath continued, is the uncertainty surrounding licensing procedures, including unclear timelines and costs. 

“This lack of transparency allows officials to create unnecessary delays and unpredictable expenses, discouraging investors. We need to establish clear limits on both the cost and time required for processing licenses – this is an issue even for Cambodian people,” he said.

“However, the multipurpose economic zone designation encompasses real estate, finance, agriculture and industry, all contributing to growth,” Sereyvath said. 

He said it also serves as a model development centre for Cambodia, supported by the clear master plan.