Heavy Equipment Sales Surge

Cambodia Construction News

The booth of Kobleck in Cambodia Construction Industrial Expo 2015 in Koh Pich. KT/ Fabien Mouret

The supply of heavy construction machinery has been rising in tandem with the construction boom over the past five years, with some companies seeing a 15-20 percent annual rise in sales of new machinery every year as buyers switch from second-hand to brand new machinery, executives said.

KOBELCO Cambodia has seen sales of heavy machinery expand 15 to 20 percent annually since entering the Cambodian market four years ago, said Kittisak Sakulkoo, CEO of KOBELCO Co. Ltd., a unit of P.T.S Group (Cambodia) Co. Ltd.

KOBELCO has sold more than 300 new construction machines since 2011, Mr. Kittisak said, adding that it sold 40 units so far this year. “The Cambodian market has grown very fast in terms of using brand new construction machinery,” he said, explaining that previously construction firms here had relied on used equipment imported from Japan and Thailand. “Now they are buying new equipment,” he said.

Aryo Agung Benardi, head of marketing at United Mercury Group (UMG), agreed, saying this year the company’s sales were booming. UMG has been in Cambodia since 2010 and represents 19 brands, including Volvo. “We now have three branches besides the headquarters in Phnom Penh,” Mr. Benardi said. These are in Siem Reap, Kratie and Battambang. “In the next three years, we will expand to Sihanoukville and Mondulkiri to follow our customers,” he added.

Second-hand machinery is still popular in Cambodia for both road and building construction, said Chhin Son, general manager of Global CAM Project Development, a domestic firm that builds both roads and buildings. It recently received a contract from the government to construct an expressway from Phnom Penh to Sihanoukville. Domestic companies that focus on excavation and loading services use second-hand rather than brand new equipment, Mr. Son said.

He said construction companies that primarily use new equipment are predominantly Chinese and Korean. New machinery is, however, becoming more popular in the the agriculture industry, especially tractors and harvesting machines.

Mr. Kittisak said domestic companies should switch to new equipment because it saves money and time as companies that sell the equipment provide technical support and spare parts if the equipment breaks down or malfunctions. Second hand equipment may be cheaper to buy but it is more expensive to use because it requires more maintenance and often breaks down, he explained.

Investment in construction reached almost $3 billion in the first 11 months of this year, up 30 percent over the same period last year, a recent report from the Ministry of Land Management, Urban Planning, and Construction said. It cited political stability, social security, and annual growth of about 7 percent as the reasons for the surge in investment.

Investment in construction has averaged about $2.2 billion a year from 2011 to 2014. In 2011, about $1.2 billion was invested in construction. This rose to $2.1 billion the next year. In 2013 and 2014, investment in construction rose to about $2.7 billion and $2.5 billion respectively.


Source: http://www.khmertimeskh.com/news/18394/heavy-equipment-sales-surge/