Construction material imports on the increase

Admin 23/June/2022 06:10

Key Takeaway

  • Postponed projects have resumed amid the slow rise in FDI
  • Construction materials such as cement and steel have the highest imported number and volume
  • Five cement plants are currently produce roughly 10,000,000 tons each year, sufficiently supply to nearly 90% of the local demand
  • More than 30% of the entire FDIs injected into the construction and real estate sectors

 “the sector remains at risk because investors may still a wait-and-see position,” 

Importing construction material has reported an about 30 percent increase amid the slowdown of the spread of covid-19, as well as investors gaining enough confidence to resume the construction project, according to latest figure reported by National Bank of Cambodia — the country’s central bank.

In its Publication “Financial Stability Review 2021” released early this week, the central bank stated that imported construction material has increased by 27 percent after a contraction of -12 percent in 2020.

This increase is partly due to the resuming of construction projects as investors gradually gain confidence, along with the low spread of covid-19. But foreign direct investment remains relatively low, slightly increased by just 1 percent.

“the sector remains at risk because investors may still a wait-and-see position,” the report said.

About $1B of construction material was imported in 2020, and nearly half of the material is cement and steel.

There are five cement factories in Cambodia that potentially produce nearly 10 million tons of cement each year. Cambodia Cement Manufacturing Association has estimated that this supply can meet the local demand up to 90 percent, and only additional one million tons required to be imported each year.

Data from the World Bank​ highlight between 2014 and 2020, the majority of FDI flows into the construction and real estate sectors, with the volumes recorded at $5B during the period. The industry made up roughly 30 percent of the entire FDI flew to the country.

English text by Kem Sreyneth

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