[PHNOM PENH POST]
While approved investments for large-scale projects in Cambodia saw
exponential growth in 2011, smaller, less capital-intensive businesses
are sprouting up quickly in the Kingdom’s capital.
The vast majority of Cambodian businesses are small- to medium-sized
enterprises, or SMEs, according to the Federation of Associations for
Small and Medium Enterprises of Cambodia. FASMEC estimates the SME
numbers at about 500,000.
The enterprises have become a driving
force in the economy by employing 1.4 million Cambodians, or more than
12 per cent of the labour force, FASMEC President Te Taing Por said last
week.
Yet competition among Cambodia’s entrepreneurs is fierce
and capital from banks often hard to secure, which edges some businesses
out of the market, officials at the federation have said.
Many SMEs are far from earning a sufficient cash flow, FASMEC executive director Lun Yeng said.
Some
individuals at the hearts of the businesses said innovation, especially
the introduction of previously unavailable products, has brought
enormous success into the sector.
The key, according to Legend
Cinema marketing executive Koy Socheat, is offering something that
people want but don’t have, which he says was easy in an economy still
in its developing stages. The theatre, which opened last July, became
Cambodia’s first cinema to offer screenings of fully-licensed,
digitalized Hollywood movies.
“When we first opened, expats and
foreigners were coming up to us and saying, ‘I have been waiting more
than 10 years for something like this to finally come here’,” he said.
Special
efforts are devoted to securing 3D titles, which Koy Socheat says are
in high demand. “They don’t care about which movie it is, or what’s
going on, or which actors are in it, they only care about wearing those
3D glasses.”
With plans to expand to six new locations in Phnom
Penh this year, it’s likely Legend Cinema will exceed the
100-staff-or-fewer limit that classifies it as an SME, an outline
provided by FASMEC officials.
Other Phnom Penh SMEs making only a
tiny fraction of the theatre, however, still consider themselves
successful. Money was never the main goal of her business, co-owner of
Mozart Music Centre Malika Ok said.
“If we thought only of
profit, we couldn’t teach music in Cambodia,” she said, adding that the
centre’s low prices would encourage more students to pick up
instruments.
Even with financial obstacles, Mozart could open
another centre within two years if the number of students continues to
expand, Malika Ok said.
“Both word-of-mouth and our annual
performances with the Institut Français du Cambodge have made us
increasingly popular,” Mozart founder and primary music instructor Hang
Rithyravuth explained.
The number of SMEs sprouting up in
Cambodia is also growing, says Te Taing Por, who attributes the increase
to recent “political stability and the growth in GDP for Cambodians,
which provides more buying power in the market”.
Business
registration statistics at the Ministry of Commerce suggest the
development is parallel with the national economc growth, totalling a
6.9 per cent increase in 2011.
Although Te Taing Por said the
government could adopt more measures to assist the enterprises, he added
that last week’s government issuing of a new prakas aimed at speeding
up and simplifying Cambodia’s business registration process was a step
in the right direction.
The prakas is expected to transform a
tedious three-step licensing process for new businesses into a “one-stop
shop,” as Lun Yeng put it, and would encourage the further development
of small businesses.
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