Sihanoukville In The Spotlight

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Although overshadowed by Phnom Penh, interest in doing business in Sihanoukville was further piqued after the Cambodian government defined the city as a ‘multi-purpose Special Economic Zone model’ as part of the Industrial Sector Policy for 2015 to 2025. A new Provincial Governor, City Governor, Chief of Police, Chief of Immigration and Director for the Department of Environment were also recently installed, signifying a concerted effort to further legitimise the city as an attractive business hub.

We caught up with Douglas McColl, Vice President of Sihanoukville Tourism Association and former owner of the city’s Coolabah Hotel, and asked him about doing business in the place that he describes as “the younger brother of Phnom Penh and Siem Reap.”

Sihanoukville’s commercial and tourism industries “have both expanded enormously,” confirms McColl. “Domestic and international tourists have both tripled in the last five years (from 469,000 in 2009 to 1.3m in 2014, according to the Ministry of Tourism). The recent emergence of the stunning offshore islands and Otres as a tourism destination drives part of that growth, alongside the rapid increase in casinos, start up of flights and increased cruise ships also driving traffic to Sihanoukville.”

McColl highlights the potential that Sihanoukville has as a highly attractive destination. He believes that “Cambodia’s only deep water port, six Special Economic Zones, the potential for oil and gas, legal gambling, strong tourism on the mainland, the exploding island development opportunities plus the related service and ancillary industries all offer opportunities for any budget.”

Already, the buzz is building. “This expansion is driving land value and rental cost appreciation, especially where development is spilling over into new areas. Look at the excellent new three or four-star hotels in Otres 2 over the last two or three years, and the related doubling of land values,” he reports.

Increased transport options are driving people towards the town. “The Sihanoukville airport has had a longer gestation period than an elephant. However, there are signs now of progress with more to come. There are scheduled flights to Siem Reap and Phnom Penh with Kunming in China, Singapore and other destinations in discussion. The rapid number of Chinese backed casinos will also likely lead to an increase in charter flights to support the industry, although most will be underpinned by online gaming,” says McColl.

A new road linking Phnom Penh to Sihanoukville alongside National Road 4 is “also part of the Cambodian Road Development Masterplan,” according to McColl. “This will make a big difference in terms of speed and safety for trade and tourism.”

Although the “electricity and city water issues of three years ago are now very much a thing of the past (apart from the last couple of months, which has seen a remission),” waste remains an issue. “For liquid and solid waste, Sihanoukville is a victim of its own success,” says McColl. “Growth has far outstripped the waste water infrastructure, combined with Cintri’s renowned service levels for solid waste. Fortunately, the Sihanoukville Provincial authorities are well aware of the sewage issue and allegedly in the process of looking at options and seeking tenders. I think their success or failure in dealing with sewage will likely have a major impact either way on the development in Sihanoukville,” he says.

It’s good news for those outside of the hospitality industry. “The expansion of Sihanoukville’s deep-water port and the boom of the Special Economic Zones (SEZs) makes it Cambodia’s commercial gateway to local and international trade,” explains McColl.

McColl advises interested business owners to come and live in Sihanoukville for at least three months before deciding anything. “Spend that time speaking to as many people as possible from all walks of life in order to get as clear as picture as possible of what the real opportunities might be,” he says. “Set it up correctly from the start, even if it costs a little bit more initially, as it will save you money and stress in the long run, and give you something strong to build on. Whilst it’s a relaxed beach resort, you still need to work just as hard and put just as much skin in the game as anywhere else. Perseverance and passion count. If you do your homework first then the opportunities are endless and the potential is excellent.”