A senior official at the Council for the Development of Cambodia (CDC) urged local investors to consider investing in sustainable timber wood to supply wood for the furniture-making sector which has a “huge growth potential”.
Chea Vuthy, deputy secretary-general of the CDC, spoke at a public forum recently that the furniture industry is expanding, as reflected by exports of approximately $700 million a year.
But the industry needs to climb the value chain as 95 per cent of raw materials are imported, he said, noting that the imported wood, which is processed in Cambodia, is not extracted from natural forests but from timber wood plantations.
“This is an opportunity for local businesses to invest in the timber wood industry to supply the furniture sector rather than import wood. You can see that we import 95 per cent because we don’t have the raw material to supply the sector.
“In addition, the US and EU don’t purchase or use wood from natural forests.
“If the processed furniture product has a combination of natural and sustainable wood, they will place orders [but we don’t have them] which is why we have to import all the raw material from other parts of the world,” added Vuthy.
Royal Academy of Cambodia (RAC) economist Hong Vanak told The Post that global economic uncertainties have had a profound impact on international trade.
The uncertainty has dragged down Cambodia’s export potential in all sectors but agriculture, he said, pointing out that consumers are holding off on non-essential goods purchase until the economy and household finance improve.
That being said, Vanak shared that trade and manufacturing are poised for a rebound in the near future.
He attributed this to the government’s increased focus on infrastructure development over the past three to four years.
Free trade agreements with China, South Korea as well as the Regional Comprehensive Economic Partnership (RCEP) would help attract more investors to Cambodia, he added.
According to the General Department of Customs and Excise, Cambodia exports of furniture, lighting signs and prefabricated buildings in 2022 rose 8.7 per cent to $948.3 million from 2021.
The amount represented a 39.7-fold increase from $23.9 million in 2015. It contributed 4.2 per cent to the total value of outbound merchandise trade of $22.5 billion last year.