A business publication in Cambodia has reported unexpected growth in the “machinery and transport equipment” sector and speculated it was as “probably bicycles”.
In 2011, 366,000 bikes were exported from Cambodia to the EU but in the first half of 2012 the country managed to almost triple its bike export to EU. Cambodia’s exports totaled close to 520,000 units in the first six months of 2012 compared to 140,000 units in the same period of 2011, according to Bikeeu.com.
The EBMA (European Bicycle Manufacturers’ Association) investigated and discovered that bicycle companies had moved their production to Cambodia from Thailand and China citing increased expenses.
Increasing expenses in China and Thailand have been attributed in part to rising wages. The minimum wage in Thailand was recently raised to 300 baht per day (US$10) and salaries in China in this business have risen to US$400 per month. By contrast, minimum wages in Cambodia are set at just US$61 per month.
Moreover, the move is estimated to save 14% on taxes. The EBA (Everything But Arms) agreement allowed country ranked among the 48 LDCs (Least Developed Countries) to export products duty-free to the EU, except arms and ammunition.
Introduced at the beginning of 2011, it ushered in a surge of 53% in export growth to European countries that year, making the EU Cambodia’s second-largest export partner after the US.