Japan’s largest auto parts manufacturer Denso (Cambodia) Co Ltd has announced plans to expand its Cambodian production chain in 2024 by adding 200 workers. The move comes as trade between the two countries reached over $1.5 billion in the first ten months of 2023.

Naoto Inuzuka, CEO of Denso in Asia, discussed the company’s plans during a November 13 meeting with Chea Vuthy, secretary-general of the Council for the Development of Cambodia’s (CDC) Cambodian Investment Board (CIB).

Inuzuka noted that over the past decade, Denso’s production line in Cambodia has seen significant progress, currently employing over 500 workers. By 2024, he said the company aims to create approximately 200 additional jobs.

The factory currently employs around 100 engineers, half of whom are graduates from the Institute of Technology of Cambodia (ITC).

Vuthy commended the company’s strides towards the expansion project, particularly in training Cambodian human resources to enhance the firm’s export productivity.

The company established the auto parts production centre in 2013, located in the Royal Group Phnom Penh Special Economic Zone (PPSEZ).

Between January and October 2023, Cambodia-Japan bilateral trade saw a total volume of $1.5 billion, a decrease of 8.5% compared to the same period in 2022.

Cambodia’s exports to Japan amounted to $974.94 million, a 1.4% reduction, while imports from Japan stood at $529.03 million, a significant 19.3% decrease.

The Kingdom’s trade surplus with Japan stood at $445.91, up from $333.04 million during the same period in 2022, as reported by the General Department of Customs and Excise of Cambodia (GDCE).

Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), noted that numerous Japanese financiers are currently investing in Cambodia.

He attributed the recent decline in trade between the two countries to the sluggish global economy.

He added that Cambodia, apart from textiles, is also exporting various agricultural products to Japan and added that he anticipates a future increase in trade as both countries are members of the Regional Comprehensive Economic Partnership (RCEP).

Heng noted that the CCC has established a representative office in Sendai, Japan, to bolster trade cooperation. The office plays a crucial role in promoting investment in Cambodia by Japanese investors and in facilitating Japanese companies to source Cambodian-made products for the Japanese market.

“As Japan is a major investor in Cambodia and a participant in the RCEP, I am optimistic about the growth in export and import volumes between the two countries as the global economy strengthens,” he said.

According to Heng, the country’s primary exports to Japan include agricultural products, clothing, footwear and electrical and electronic components, while Japan’s imports to Cambodia consist of electronic equipment, machinery and spare parts.

As of the end of 2021, Japan ranked as the fifth-largest source of foreign direct investment (FDI) in Cambodia, contributing $2.4 billion, which represents 5.9% of the country’s total FDI of $41 billion. The majority of Japanese investment in Cambodia is in the financial, construction, hotel and real estate sectors, as per the National Bank of Cambodia (NBC).

In 2022, trade between Cambodia and Japan totalled $1.95 billion, marking a 12.3% increase compared to 2021. Cambodia’s exports to Japan were valued at $1.17 billion, up 7.3%, while imports amounted to $774.99 million, a 21% increase, according to the GDCE.