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World Bank Document Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized THE WORLD BANK OFFICE PHNOM PENH No. 113 Norodom Boulevard Phnom Penh, Cambodia Tel: (855 23) 861 300 Fax: (855 23) 861 301 Printed in August 2014 Improving Trade Competitiveness in Cambodia: An Analysis Using a Trade and Transport Facilitation Assessment (TTFA) is a product of staff of the World Bank. The fi ndings, interpretation and conclusions expressed herein do not necessarily refl ect the views of the Board of Executive Directors of the World Bank the governments and donors they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Cover photographs are Copyright World Bank. A Trade Development Report IMPROVING TRADE COMPETITIVENESS IN CAMBODIA: AN ANALYSIS USING A TRADE AND TRANSPORT FACILITATION ASSESSMENT (TTFA) Table of Contents ACKNOWLEDGEMENT ------------------------------------------------------------------------ X ACRONYMS AND ABBREVIATIONS -------------------------------------------------------------XI EXECUTIVE SUMMARY ----------------------------------------------------------------------- 1 1. METHODOLOGY AND ORGANIZATION OF PHASE II TTFA --------------------------------------- 5 1.1 Methodology ------------------------------------------------------------------------- 6 1.2 Organization of the Survey -------------------------------------------------------------- 7 1.3 Key Concepts ------------------------------------------------------------------------ 8 2. RICE ------------------------------------------------------------------------------------- 11 2.1 Trade and markets -------------------------------------------------------------------- 12 2.2 Industrial organization ---------------------------------------------------------------- 12 2.3 Business models --------------------------------------------------------------------- 13 2.4 Supply chain structure ---------------------------------------------------------------- 13 2.5 Supply Chain Performance ------------------------------------------------------------ 15 2.6 Objectives and Strategies ------------------------------------------------------------- 16 2.7 Implementation ---------------------------------------------------------------------- 17 3. GARMENTS ------------------------------------------------------------------------------ 19 3.1 Trade ------------------------------------------------------------------------------- 20 3.2 Business Models --------------------------------------------------------------------- 22 3.3 Supply Chain Performance ----------------------------------------------------------- 23 3.4 International Competitiveness of Cambodia’s Garment Industry ----------------------------- 26 3.5 General Objective and Strategies ------------------------------------------------------ 26 3.6 Implementation --------------------------------------------------------------------- 26 4. FOOTWEAR ----------------------------------------------------------------------------- 30 4.1 Description of Trade ------------------------------------------------------------------ 31 4.2 Business Model --------------------------------------------------------------------- 32 4.3 Supply Chain Performance ----------------------------------------------------------- 33 4.4 Opportunities and Constraints --------------------------------------------------------- 34 4.5 Objectives and Strategies ------------------------------------------------------------ 34 4.6 Implementation --------------------------------------------------------------------- 35 5.SILK TRADE ------------------------------------------------------------------------------- 37 5.1 Trade and Production ---------------------------------------------------------------- 38 5.2 Potential Growth in Production -------------------------------------------------------- 39 5.3 Supply Chains ---------------------------------------------------------------------- 39 5.4 Business Models --------------------------------------------------------------------- 41 5.5 Supply Chain Performance ------------------------------------------------------------ 42 5.6 Objectives and Strategies ------------------------------------------------------------- 42 5.7 Implementation --------------------------------------------------------------------- 43 6.LOGISTICS ------------------------------------------------------------------------------- 45 6.1 Trade Finance ---------------------------------------------------------------------- 46 6.2 Road Transport --------------------------------------------------------------------- 49 6.3 Clusters and Corridors --------------------------------------------------------------- 50 ANNEX I: RICE ----------------------------------------------------------------------------- 55 Global Trade -------------------------------------------------------------------------- 56 Prices ---------------------------------------------------------------------------------- 57 Cambodia Production and Trade ---------------------------------------------------------- 58 Rice Processing ------------------------------------------------------------------------ 60 Rice Transport ------------------------------------------------------------------------- 62 Characteristics of Firms Surveyed -------------------------------------------------------- 63 Supply Chains and Cash Flow ------------------------------------------------------------ 64 ANNEX II: GARMENTS ------------------------------------------------------------------------ 71 Global Production and Trade -------------------------------------------------------------- 72 Market Segments ----------------------------------------------------------------------- 73 Value Proposition ----------------------------------------------------------------------- 76 Production of garments and textiles ------------------------------------------------------- 76 Alternative business models ------------------------------------------------------------- 78 Supply Chain Performance -------------------------------------------------------------- 78 Cambodia’s garment industry-------------------------------------------------------------- 79 Summary of fi rms surveyed ------------------------------------------------------------- 86 Flow Charts ---------------------------------------------------------------------------- 87 ANNEX III: FOOTWEAR ---------------------------------------------------------------------- 90 Global trade ---------------------------------------------------------------------------- 91 Market Segments ---------------------------------------------------------------------- 93 Value Proposition ----------------------------------------------------------------------- 94 Global Production and Employment ------------------------------------------------------- 95 Footwear Supply Chain ------------------------------------------------------------------ 95 Footwear production ------------------------------------------------------------------- 95 Cambodia’s footwear industry ------------------------------------------------------------- 97 Characteristics of Firms Surveyed -------------------------------------------------------- 98 Supply Chain -------------------------------------------------------------------------- 100 ANNEX IV: SILK --------------------------------------------------------------------------- 103 Global Production and Trade ------------------------------------------------------------ 104 Production Process -------------------------------------------------------------------- 106 Cambodia’s Silk Industry --------------------------------------------------------------- 108 Thai Silk Industry ---------------------------------------------------------------------- 112 Characteristics of Firms Surveyed -------------------------------------------------------- 114 Supply Chains and Cash Flows Models ----------------------------------------------------- 115 BIBLIOGRAPHY --------------------------------------------------------------------------- 124 Garments ----------------------------------------------------------------------------- 125 Rice -------------------------------------------------------------------------------- 126 Silk --------------------------------------------------------------------------------- 127 Other ------------------------------------------------------------------------------- 128 List of Figures Figure 1 : Cambodia is improving its logistics ---------------------------------------------------2 Figure 2 : Cambodia rice production, 2000-10 --------------------------------------------------12 Figure 3 : Rice flow ------------------------------------------------------------------------14 Figure 4 : Restructure rice supply chain -------------------------------------------------------17 Figure 5 : Cambodian garment exports -------------------------------------------------------20 Figure 6 : Number of Cambodian garment factories and direct employment ------------------------21 Figure 7 : Cambodian garment export destinations, 2010 ----------------------------------------21 Figure 8 : Allocation of responsibility for supply chain activities -----------------------------------24 Figure 9 : Cambodia’s leather footwear exports ------------------------------------------------31 Figure 10 :
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