AGAMA And The Cambodian Investment Scene



Foreign investment plays an essential role in Cambodia’s small but growing economy. According to the Asian Development Bank, Foreign Direct Investment (FDI) was worth over $4 billion to the Cambodian economy in 2014—in a country with a GDP of around $15 billion, that accounts for almost a third of the entire economy. Attracting and increasing this foreign investment is critical not only to Cambodia’s ongoing development, but also to setting the speed at which Cambodia is able to continue developing.

Thierry Tea, Managing Partner at AGAMA Investments, believes that Cambodia has much to offer both foreign and local investors. A French-born Cambodian, Tea worked as Southeast Asia Regional Sales Manager for Airbus Helicopters before becoming President and CEO of Airbus Helicopters in the Philippines for five years, then Head of Airbus Group in the Philippines. He went on to found PhilJets Aero Services, his aviation solutions company, handling aircraft management, brokerage and private aircraft chartering in the Philippines, before deciding to turn his focus to his parents’ home country, Cambodia.

“My objective was to come to Cambodia—which is where my parents were born—so I set up a boutique investment consulting company in Phnom Penh last year.” says Tea. “In Cambodia, my wife and I, we feel a sense of home. It’s not easy; it’s a very challenging market. Cambodia is very fast-paced in terms of development and there is a lot of competition. Everything you do, you will have strong competition—very fast-thinking competition—so you have to re-invent yourself and be proactive all the time.”

“We decided to invest in some projects first, by ourselves, in order to get to know the local market before bringing in other people—we needed to be credible and experienced,” he explains. “We invested in a vanilla plantation, a mango plantation, and started exploring distribution of golden south sea pearls. For the Jewelmer Joaillerie pearls, we are now at the stage where we are committing to opening a retail shop in Phnom Penh.”

Tea sees agriculture, retail and real estate as three interesting areas for investment in Cambodia. “For our investments, we believe in contributing by either bringing in foreign funds by exporting Cambodia-made products, or keeping the spending in Cambodia instead of in neighbouring countries. We’ve started in agriculture and retail because we have identified that there are some exciting opportunities in some niche segments.” He notes, however, that any success in a particular niche will be quickly noticed by potential competitors. “Look at real estate—a lot of groups are now doing condos because they have seen it can be successful. In F&B, a lot of groups have gone into bubble tea or cafés. So if you do something that is successful you have to be very strong financially and forward-thinking to keep up, unless you go into a completely original niche.”

“I think that for the luxury market right now, many of the spenders still go abroad—fly to Singapore or elsewhere—to make a luxury purchase. In maybe three or four more years the luxury market will become more viable here as it becomes more consolidated with a greater concentration of local offerings. Right now if people have the money they will shop in Singapore, Bangkok or Hong Kong, but I believe this will change for sure, as it is a natural evolution of consumer behaviour and trends in an emerging economy.”

In order to make high-level investment in Cambodia more attractive, Tea has several thoughts on positive steps that could be taken.

“Cambodia is quite a free economy, however, I think something that could help, which the Ministry of Commerce and the Government has started a bit, is more planning across sectors. When investors are looking at a country they are interested in the long-term, so a free economy is good, however, let’s look at retailers or hotels for example—obviously they would like to know if they put their store or establishment here today that next month there’s not going to be something ugly appearing next door to ruin their investment. So there needs to be planning and the planning needs to be transparent in order to make informed investments. If there could be development within zones that would be quite useful, with synergies that will help the image of the country as a whole.”

Tea also identifies improved infrastructure and education as keys to driving increased investment. Mass public transit, flyovers, skyways and green areas, are all things that need to be in the planning stages now, to avoid intractable congestion issues in the future that could discourage potential investors. “If you look at the Philippines, they have had potential for many years, but it is only in the last few years when the government has started to really invest heavily in infrastructure that we have seen the country booming and foreign investment pouring in,” Tea explains. “So the challenge for Cambodia over the next 10 to 20 years will be urban development and education.”

Tea is optimistic that these challenges will not prove impossible in Cambodia, and that those who are willing to be patient will see strong returns. “Like in any country, you need to have a good business plan and a solid analysis of the market,” he says. “You need to have a long-term commitment. If you are only here for the short term it will be difficult to see any returns.”


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