New Opportunities in ASEAN: Let get know about the two Zhejiang Special Economic zones in Cambodia

1. Background of the Two Zhejiang SEZs: 

As the province has topped the China Private Enterprises 500 rankings, Zhejiang enterprise demonstrates its contribution to the socio-economic development of Cambodia through the establishment of two special economic zones in Cambodia:

The first, the Cambodian Zhejiang Guoji SEZ located in Sihanoukville’s Prey Nob district, was approved for operation in 2018, currently has full investment in the area.

Relying on the advantages of deep-water ports, it creates a hub for export processing and advanced manufacturing. With energy development, ecological manufacturing, circular economy, and industrial cluster development as its orientation, it has helped domestic enterprises to "go global and succeed".

The second, Koh Kong Zhejiang SEZ, located in Sre Ambel District, was approved for operation in May 2024. Planning heavy industrial zone, chemical zone, light industrial zone and the only "park in the park" authorized by the Cambodian government, it is committed to creating a model of "Belt and Road" industrial town in Southeast Asia.

The two special zones are about 28 kilometers apart and connected by National Road No.4, forming a "port-hinterland" industrial complementary pattern, and becoming the "twin engines" for Zhejiang enterprise to expand into ASEAN.

2. Cambodian Zhejiang Guoji SEZ 

2.1 Location

The Cambodian Zhejiang Guoji SEZ has superior transportation conditions, which is only about 50 kilometers away from the Sihanoukville port. It forms a "double park competition and cooperation" with the key project under the "Belt and Road" initiative - Sihanoukville Special Economic Zone (SSEZ).

2.2 Core Advantages

Enjoy the Cambodian special economic zone policy and the Zhejiang business supply chain network.

2.3 Industrial Layout:

Covering various industries, including furniture & home furnishings, pet supplies, medical equipment, hardware, chemicals, building supplies, packaging.

2.4 Government Support

The government provides one-stop services for enterprises in the SEZ, including tax incentives, fast customs clearance, and convenient land leasing conditions.

2.5 Development Entity

In 2018, Kasen International Holdings Ltd responded positively to the China-proposed Belt and Road Initiative and established the Cambodia Zhejiang Special Economic Zone.

In November 2018, the first phase of the zone, with an area of 180 hectares, was put into operation. Since the first company was established at the zone, there are 34 manufacturing factories that have settled in and officially commenced production. All products were exported to countries such as Japan, South Korea, Europe, America, and Canada. The zone's total import and export trade volume reached more than $600 million while the current rental and sales ratio is 100%.

2.6 Typical Cases:

In March 2019, Wenzhou Yuanfei Pet Toy company invested 46 million US dollars and established it overseas production bases (I Tao Pet Supplies) in the Cambodian Zhejiang Guoji SEZ. In just three years, annual exports exceeded US$60 million.

In September 2019, Hong Kong Fukai International cooperated with Dongguan Pengzhan Furniture and established Fupengzhan Furniture (Cambodia) Co., Ltd. in the SEZ, with an investment of more than US$20 million, the annual exports have reached more than US$38 million.

In November 2019, Fujian Panmin New Material Co., Ltd. invested US$10 million to establish Cambodian Zulite Stone Co Ltd. in the Special Economic Zone, with annual exports of more than US$18 million.

3. Koh Kong Zhejiang Special Economic Zone

3.1 Strategic Value

Location: The overall planning of Koh Kong Zhejiang Special Economic Zone is 3,041 hectares, of which the first phase covers an area of 1,041 hectares. It located at 148 kilometers of National Road 4, only 3 kilometers away from the 135-kilometer exit of the Phnom Penh-Sihanoukville Expressway, about 60 kilometers from Sihanoukville Port and 8 kilometers from the OMP Terminal, with efficient and convenient transportation.

Location Uniqueness: The SEZ is located in Koh Kong Province, southwest of Cambodia, bordering Thailand and close to the core area of the Southeast Asia Free Trade Zone.

Industrial clusters: At present, the enterprises that have been recruited and settled in are mainly concentrated in the East zone of the Koh Kong Zhejiang Special Economic Zone, including: Zhejiang Home Point Furniture, Ideal Furniture, Hang qi (Cambodia) Co.,Ltd, Helin Furniture, and Zhejiang Hengsen Furniture. For the north zone has also successively introduced Yourun Technology, Aosen Electrical Equipment, Meizhi Tools and many other industrial chains.

On this basis, the special economic zone will continue to attract enterprises in the fields of science and technology and intelligence-related industries, further optimize its industrial structure and enrich the technological content and intelligence level.

Core Advantages:

①Reasonable planning:

North Zone: about 514 hectares, planned as heavy industry and chemical industry zone for tire factory, printing and dyeing factory, electroplating factory, cassava processing plant, garbage power plant, sewage treatment plant and other categories.

East Zone: about 322 hectares, planned as light industry zone for clothing factory, bag factory, shoe factory, gelatin factory and other categories.

Southeast side: set up a reservoir of nearly 100 hectares, with a maximum capacity of nearly 10 million m³.

②Cambodian government exclusively approved Koh Kong Special Economic Zone to engage in recycling and processing projects of scrap metal, plastic, paper and power battery.

3.2 Project planning:

Transportation: The SEZ has planned a total length of 54.3 kilometers of roads, including multi-width main roads, with the widest six-lane road of 20 meters, and other main roads with widths of 18 meters, 15 meters, 12 meters, and 8 meters. The roads are equipped with greenery, sidewalks, street lights and other facilities.

Water supply: The SEZ plans a medium-sized reservoir with an area of 100 hectares and a storage capacity of 10 million m3. The length of the reservoir is more than 2,000 meters, and a special water plant is set up with a designed daily output of 30,000 tons, which is not only guarantees the water demand for production and daily living within the SEZ, but also provides convenient and safe water services to surrounding residents.

Sewage treatment plant: The SEZ plans to build 2 industrial sewage treatment plants and 3 integrated domestic sewage treatment facilities.

Power supply guarantee: The SEZ plans to build a 300MW regional substation with an area of 40,000 m2, and also plans to build 5 switch stations in various sub-districts to ensure the production and daily electricity demand of the SEZ.

Life style: An industrial town covering an area of 70 hectares is planned to built in the center of the SEZ, including a Administrative Center that provides one-stop services for enterprises, hotels, supermarkets and convenience stores, farmers' market, technical training school, kindergarten, hospital, employee apartment, bank, gas station, restaurants, and villas. It is expected to accommodate about 30,000 industrial workers and about 5,000 high-end corporate managers.

3.3 Construction progress: 

The first phase of the East Zone of Koh Kong Zhejiang SEZ was opened on January 15. 

Since August 2023, it has completed the progress of land contract signing, project planning and design, road construction, the first and second phase of standard factory building construction and leasing, rainwater, sewage, water supply network. At the same time, it has also built a series of supporting facilities such as a large reservoir with a storage capacity of 10 million m³, a 30,000 m³/d water plant, a 15,000 m³/d sewage treatment plant, a 5,500 m² lakeside hotel, a 12,000 m² Grand Kasen Yard, a skills training institute and a labor service center.

4. Investment potential of Zhejiang SEZ

1.Enhance China-Cambodia cooperation: Zhejiang Special Economic Zone has not only promoted the development of Chinese enterprises in Cambodia, but also promoted Cambodia's industrial upgrading.

2. Expand Southeast Asian market: Relying on Cambodia's RCEP trade agreement advantages, enterprises can expand into a broader Southeast Asian market.

3. Cost advantage: Compared with neighboring countries such as Vietnam and Thailand, Cambodia's labor and land costs are more competitive.

In conclusion, the Cambodia Zhejiang Special Economic Zone has strategically established two special economic zones with distinct industrial characteristics in Sihanoukville and Koh Kong. Whether it is manufacturing, logistics, or light and heavy industries, the special economic zones provide huge opportunities for all investors and it is an important choice for enterprises to expand into the Southeast Asian market.