Started as Cambodia’s leading logistics company since 1992, WorldBridge Group has expanded its businesses to potential sectors including construction, real estate, finance, food and beverage, and e-commerce., For this reason Worldbridge has drawn attention from businessmen into Cambodia.
We asked Oknha Sear Rithy, the Chairman, about their business development and some factors that foreign companies should keep in mind to conduct business in Cambodia. (Interviewed at: September, 2017)
Oknha Sear Rithy: Chairman of WorldBridge.
Competitiveness should be motivated by strengthening the regulatory framework
Could you tell us about any changes in this industry within the last several years?
Recently, this industry has changed dramatically. We can say that the transport and logistic sector is growing rapidly and developing steadily. I think this is thanks to the economic growth of Cambodia, the increase in trade activity and the success of the infrastructure business, and these are some of the trends of economic growth in Cambodia.
We can also see the government’s efforts. In Cambodia’s Industrial Development Policy (IDP) 2015 to 2025, government is working on strengthening the transportation industry as one of the four strategies of the government. They have also announced the development of National Road 4.
When talking about ports, the ports ranging from 30 to 70 meters has increased, resulting to an increase in cargo line in Cambodia. These are the main changes in this industry.
A challenge we have is that Cambodia doesn’t have enough human resource. This is a big problem in the logistics industry too, limited human resources, skills and human capacity.
Another challenge is that the logistics cost compared to the neighboring countries in the region remains relatively expensive.
What do you think is required for the development of the logistics industry?
I think there are four keys to develop this industry.
First, we need to improve the competitiveness not only of our industry whereby it is necessary, motivated by strengthening the regulatory framework to allow for more dynamic business activities.
Secondly, we must further improve the quality of services and aim for standardization in the industry. Updated know-hows and technologies to encouraged and modernize the industry practice to the next level.
Thirdly, the improvement of work force is a must. More vocational training focused on logistics skills should be encouraged to fill the gap, currently faced by the industry.
Lastly, there must be a closer collaboration between the government and private sectors. I think that there are many problems that cannot be solved by private companies, and we think that the government’s efforts are required.
These are the four keys to moving our industry to the next level.
Business development based on logistics
Your company is developing in various businesses. Could you tell us the purpose and aims of each business, such as starting a Special Economic Zone, infrastructure improvement, and heavy-duty truck business?
Expansion of these businesses are based on my vision. My vision is to be a number one diverse solution provider and pioneer in Cambodia. I would like to contribute to the development of this country. Like our vision, you can see that many of our businesses are pioneering in Cambodia.
In addition, all the businesses our company develops are related to the logistics industry which is our main business. We believe that the construction of SEZ could contribute to the value chain and supply chain in the country. I started KERRY Worldbridge SEZ as the free trade zone and special economic zone, which is a part of our mission to contribute to our country joining the regional and global value chain.
Although many people don’t understand this well, it is different from Phnom Penh Special Economic Zone (PPSEZ). PPSEZ is more focused on attracting factories, but Kerry Worldbridge SEZ is open to all businesses, there are many factories, but there are also businesses in logistics and distribution too. We are the first SEZ to have the Customs Bonded Warehouse integrated, which adds more value to our customers.
For our property projects, it is based on a new concept. The projects are also different from others and have full facilities including office units, shopping malls and commercial facilities.
We also run a premium food and beverage business and we provide our services to all five stars hotel in Cambodia. When the middle class grows in a country and they start spending money on food, they will be interested in high quality food and beverages. This is one of the reasons why we entered this sector, so we can help the society to grow.
We also have a Japanese furniture factory. This is because we want to bring Japanese standards to the Cambodian market. In conclusion, all my businesses leverage logistics as a backbone in some way.
Create a role model so Cambodia can grow
What kind of roles do you want to take in this industry?
My role is to help drive and shape this industry so that it becomes more competitive and efficient. If I don’t take the lead, Cambodian logistics industry will never be able to challenge our counterparts in the region. Therefore, I need to create a role model.
Logistics is the key factor to drive the business and economic growth in this country, that is why I am expanding businesses in many sectors so we can create a new strategy in this industry. As part of our initiative, we are planning to create a new multi-model-logistics business within this year.
Setting the vision in the beginning is very important
You are conducting various businesses in many industries other than logistics. Could you tell us if there are any important points to conduct business in Cambodia?
Cambodia is a third world country and most of the people run their business within the family, and most of the business people here do not understand what corporate governance or transparency is. Therefore, it is necessary to set a vision. To lead the market here, besides the logistics industry, we have our own vision for all the businesses we are involved in. Vision is very important, because this is what drives you to the future direction of the business. We must create a working environment for the staffs. Therefore, we create a vision of the business first.
After creating a solid vision, we will look for partnership. If we don’t have a solid vision, we cannot look for partners. This is another reason why I look for partners who have skills to support the business. For an example, I am no expert in the property business. Therefore, I have partnership with a leading Singaporean company who understands the property business very well. I have a partnership with a Hong Kong company in the food and beverage business, because they are also a food supplier and have ample knowledge of the sector. In any case, we must set up the vision first.
If you want partners to join you, you must have proper cooperate governance in your company to begin with, this could be proper accounting systems, the foundation of a company, human resources and the actual structure of the organization so potential partners will not hesitate. If all is in order, potential partners will think “You are ready to do business”. Of course, when our company looks for an overseas market, we will also look at how to structure the company.
What do you expect from Japanese company?
I have been working with Japanese business people for a long time, and I think they are very cautious people. They study well to start a business. They may take a few years to study and to come to a decision, but when they decide on something, it usually means they are strongly committed to it.
I will always support Japanese businesses working here, I am discussing several business opportunities with Japanese companies now.
- Description of Business : Hotel