Yamaha plant delayed

Photo by: Tracey Shelton
The manufacture of Cambodia-produced Yamaha motorcycles has been delayed due to the economic crisis

Written by Nguon Sovan
Thursday, 25 June 2009

Further setbacks following the economic crisis means the new plant at PPSEZ won’t be built until late 2010

AJOINT venture between Yamaha, Toyota and Kong Nuon Import and Export has delayed construction of a motorcycle manufacturing plant at Phnom Penh Special Economic Zone (PPSEZ) on the outskirts of the capital because the financial crisis has reduced domestic consumer demand for motorcycles, the Cambodian investor said Wednesday.

"We put off building the factory in March due to the economic slowdown, but we will try and start construction by the end of this year," said Kong Nuon, chairman of the Yamaha Motor Cambodia Co (YMKH), adding that Yamaha motorcycle sales have dropped by half since the real estate in downturn.

In September, Yamaha Motor Co, Toyota Tsusho Corp and Kong Nuon Import and Export announced a joint venture investment to build a complete knock-down manufacturing plant to assemble Yamaha motorbikes on a 94,890-square-metre lot at PPSEZ.

The US$11.5 million venture is 70 percent owned by Yamaha Motors, with Toyota taking a 20 percent stake and Kong Nuon Import retaining 10 percent.

In the original master plan, the company was scheduled to begin operations at the factory in October assembling motorcycles from premanufactured parts, with the aim of eventually moving towards in-house production. The company hoped to produce about 30,000 motorcycles in the first year.

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They [Yamaha] have to decide when is the right time to start construction.
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"But due to the crisis, operation [of the factory] may begin in late 2010," said Kong Nuon.
Hiroshi Uematsu, managing director of the PPSEZ, said Tuesday that it would take about six months to build the Yamaha plant and another two months to bring the factory online.

"They [Yamaha] have to decide when is the right time to start construction," he said.
Matoba Michifumi, managing director of Yamaha Motor Cambodia Co, told the Post in April that Yamaha's sales outlook did not look good for the rest of 2009.

"Prior to the crisis, we estimated that motorcycle demand was around 140,000 a year, but now we have re-estimated the number to be 100,000 a year, mainly due to the real estate crisis," he said.

Kong Nuon said that the motorcycle market was good until the real estate boom went bust, and that it could take some time to reach pre-crisis sales numbers.

"Now, real estate is in a slump, and it's likely that a recovery will be difficult," he said.