Jakarta, Indonesia – A Cambodian business delegation comprising members from different industries is flying back home on Sunday after completing first trade mission in Indonesia under the aegis of Cambodia’s Ministry of Commerce (MoC) and the Embassy of the Republic of Indonesia in Phnom Penh. While the top official of the embassy said the bilateral trade between the two countries is expected to hit record high this year, he also revealed a plan for direct flights.
Members of the trade delegation too displayed enthusiasm about future deals, better trade ties, and mutual benefit.
The trade delegation completed the trade mission with a dinner discussion with the Ambassador of Indonesia to Cambodia in Jakarta on Friday after visiting PT Kino Indonesia Tbk (Kino)—one of the biggest Indonesian companies specializing in consumer products from hair care to kid personal care in Tangerang city of the Baten province. It was the first trade mission completed by Cambodian business personnel in Indonesia in two years since the Covid-19 pandemic hit the global economy.
Sudirman Haseng, Ambassador of the Embassy of the Republic of Indonesia in Phnom Penh, welcomed the Cambodian trade delegation that spent about one hour taking a bus from Baten province to Jakarta under guidance by the embassy official, led by Lauti Nia Astri, Minister Counselor of Economic Cooperation of the Embassy of Indonesia in Cambodia.
Before the dinner started, Haseng told Khmer Times the Indonesian government encouraged not only manufacturers to expand their market across the world, including Cambodia, but also the world to export their raw materials as the Indonesian government prioritized both export and import.
“First of all, I would like to say thanks and appreciation for the interest of the trade delegation to join the mission. This is Cambodia’s side to maintain and strive to find new opportunities of increasing our bilateral trade to bring more growth together. This is a very good opportunity for the Indonesian side to widen their positive perception by meeting Cambodian business people in person too,” said Haseng.
The Indonesian Embassy in Cambodia has been working to push the Cambodian business community to export their products to Indonesia as there is a demand in the country’s manufacturing industry, by arranging more trade missions between the two countries, he said.
Another group of Cambodian delegations comprising members from the services, banking, agriculture, green energy, and many other segments started the second trade mission on Sunday, the first in the last two years.
“We are encouraging the two countries to have balanced trade. To make it fair and grow together, we need to make Indonesia-Cambodia trade a little bit balanced by providing more opportunities to the trade community to meet and develop business partnerships,” he said.
He also urged stakeholders to push for creating more opportunities for business communities of both countries to exchange business information. “There is still no suitable clarity among Indonesian businesspeople as to why they should do business with Cambodia and be treated as a business destination. If they partner with each other more, I believe we will reach a trade balance between the two countries,” said the Ambassador.
Haseng said the trade volume between Cambodia and Indonesia is expected to rise to around $1 million in 2022. It has crossed $600 million in January-September 2022 compared to the same period of 2021 as business forums for businesspeople of the two countries have interacted more frequently. “Hopefully, we will be able to reach $1 billion trade volume soon and would set a new record,” he said.
Calling businessmen the main actors of the economic activities, he said the government or the embassy are just the facilitators but are important as they set the stage and take the initiatives, said Haseng and added Cambodia and Indonesia already were in the ASEAN Free Trade Agreement (FTA), ASEAN Community and the double taxation avoidance agreement. “In some extent, there could be a bilateral trade agreement between the two countries,” he said.
According to the General Department of Customs and Excise (GDCE), trade volume between Cambodia and Indonesia has grown by 46.4 percent to about $629 million in January-September 2022 from $417 million in the same period of 2021.
Haseng said Cambodia can export pepper and other high-end quality agricultural products to Indonesia, while the latter has exported especially industrial products to Cambodia such as foods and footwear.
In his opening address at the 37th Trade Expo Indonesia at the Indonesia Convention Exhibition Centre (ICE), Indonesian President JokoWidodo said the growth of the gross domestic product (GDP) of Indonesia had grown 5.44 percent in the second quarter of 2022 even though the inflation had risen to about 5 percent in the same period, while the country’s central bank Bank Indonesia and municipal-provincial authorities have worked together to control the inflation effectively.
There were a large number of products were displayed at more than 1,000 booth of manufacturers and the event was attended by over 1,000 guests from over 100 countries.
Indonesia is one of the important members of the Association of Southeast Asian Nations (ASEN). According to World Bank (WB) 2021 data, this country has more than 276 million people, with $4,291.8 of per capita gross domestic product. Cambodia has about 17 million people at 1.4 percent of annual population growth and $1,591 GDP per capita. Cambodia’s GDP is expected to grow by about 5 percent in 2022.
“Even though we are facing uncertainties due to the global economy being on the downtrend, we are optimistic about economic development. Inflation is not very high now and under control, we also have a trade surplus,” said Indonesian President Widodo in his speech at the opening ceremony of the exhibition.
Tan Yuvaroath, Deputy Director of General Department of Trade Promotion of MoC, who joined the trade mission on behalf of the government in trade, told Khmer Times on the sidelines of a meeting between Cambodian trade delegation with senior officials of Kino, and also to the Indonesian Ambassador to Cambodia that Indonesian are interested in importing raw materials on the complimentary basis to Indonesia market, while Indonesian bird nest producers want to export their products to Cambodia as they have seen that more and more Chinese people go to the Kingdom.
Yuvaroath said Indonesia has a long-time experience in producing the birds nest and exporting these products to the rest of the world. “The delegates want to work with them in setting up technical training regarding raising and cleaning,” he said, adding they will consider providing technical training to Cambodian delegates at a convenient rate compared to other countries.
Yuvaroath also said there are some Cambodian delegates expressing interest to move forward for further negotiation with Kino, which is also looking for more distributors in Cambodia as it has not provided exclusive distribution status to any local importer in the Kingdom yet, while some of its products flow further to Cambodia from Vietnam with Vietnamese labels that could make Cambodian consumers confused that those products are made in Vietnam, not Indonesia.
“I believe it is possible for them to build business cooperation in the future as they get clear information from each other and know each other more clearly with trust. So, it can be assessed that the trade between the two countries will grow more as more trade people meet and negotiate and I will take all this information and experience to share with many other businesspeople in our country who could not join the trade mission and arrange business matching for them,” said Yuvaroath.
The commerce ministry official revealed that the officials of the Embassy of the Republic of Indonesia had informed him that Capital A Berhad, operating as AirAsia — a Malaysian multinational low-cost airline headquartered near Kuala Lumpur of Malaysia, plans to launch direct flights from Phnom Penh to Jakarta and from Phnom Penh to Bali province—a popular tourism destination of Indonesia—in December this year.
“Businesspeople should export high-end products, for example, number 1 rice to this country as its government protects the people here from consuming low-quality products. We never had a balance in trade with this country and the deficit is on us as we need to import. To export more, I think we should have a strong internal production base in our country with support from financial institutions and other stakeholders,” he said, adding Indonesia exports food like noodles, footwear, rubber-made products such as tyres, automobiles,s and machinery spare parts.
Dian Natalia Sampoerno, Regional Head of South East Asia of Kino, told Khmer Times on the sidelines of the meeting with the Cambodian trade delegation on Friday that Kino was established about 21 years ago to mostly produce consumer goods, personal care, food, beverages, and household items at five factories across Indonesia—three in West Java, one in East Java and another in Banten to supply in 39 markets around the world in cooperation with business partners in five countries that included the Philippines, Vietnam, Malaysia, Cambodia, and China.
Dian said Cambodia is ranked number 4 among the main market destinations for the distribution of Kino’s products. The biggest markets at present included the Philippines, China, Japan, and Cambodia. The company’s brands are available including Ellips for hair vitamins, DuaDewi for health supplements, Sasha for hair vitamins, and Sleek Baby for laundry detergent.
“Cambodia market actually comes at number four of our operating countries and it is a very significant market for our company and very positively responsive from the consumers out there to our products, especially ellips brand has dominated the market…even during the pandemic the situation is not bad and as of now it is growing as the economy is strong,” she said, adding Kino has been operating in Cambodia since 2018 under supportive trade policies for foreign companies released by the government without barriers, for example, the tax is not very high for imported goods.
Dian said Kino sale in Cambodia is expected to grow by 21 percent in 2022 compared to last year. “We are expecting as a part of a partnership that we are going through for another business line, after the meeting that other brands of our products will be distributed and the business will be expanded in Cambodia and grow together,” she said.
Bun Chankosal, Managing Director of DK Enterprise Co Ltd, was one of the Cambodian delegates in the trade mission to Indonesia told Khmer Times after dinner with the Indonesian Ambassador to Cambodia that he has been interested to communicate more with manufacturers of processed food such as confectionery products like cake and candy at the trade exhibition.
Chankosal said he has visited Indonesia twice. Two years after completing the first trade mission in 2013, he reached a business partnership agreement for distributorship with an Indonesian firm to import cookies, biscuits, and chocolates for the Cambodian market. He is confident of a similar outcome to his visit.
He said the quality of Indonesian products is acceptable, while the experience of doing business with Indonesians has provided him with high trust and reliability to move forward with his business development plan. The products have suitable features for the Cambodian market.
“It is because my product customer targets are mostly youth who always need new things. So we have to update our product features to respond to the market demand like that the new products that they provide new features such as new tastes and flavour for cookies and biscuits,” Chankosal said.
Khuon Emrith, the Managing Partner of CR Cosmetics Co Ltd, who joined the trade mission to Indonesia for the first time, told Khmer Times he is interested in doing business with a few manufacturers in importing and distributing food and cosmetics in the Cambodia market because Indonesian food and other products suit Cambodian people’s requirements. At present, similar items are imported from Thailand and Vietnam.
“I want to change the flavor of foods for my customers to get new ones in addition to what they are receiving from neighbouring countries. But I need to check further the quality, smell, packaging and other stuff with my team to see whether they can compete with the other products that are available in our market or not first. So, I will communicate with the manufacturers further when I return,” Emrith said.
- Tags: Cambodia Indonesia trade, Indonesia