Interview with Erkan Bilal, Group Managing Director of AZ Group
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1. Can you tell us a little about yourself? When did you move to Cambodia and what is it like doing business here?
In 2019 I moved to Cambodia/PP together with my family and I haven't regretted it yet! I am a German citizen, with more than 30+ years of C-level professional experience in global markets and I am grateful that I have been able to visit more than 36 countries in my professional life and work directly with more than 25 different cultures and people on diversified projects.
I have always been interested in understanding the big picture in business and the interaction between economy, business, financial services, investments in sustainable technologies, law and M&A and more.
I completed my university studies simultaneously, studying Economy and Business in France and Engineering in Germany/ Karlsruhe University.
These experiences and my encounters with interesting people, companies, institutes and technologies within a multicultural environment shape me personally.
Doing business here in Cambodia and the SEA region may be a bit unfamiliar for many Europeans and Germans, but nothing new for me because I find my way around different cultures very well and I enjoy making contributions to the life of people in the Kingdom of Cambodia.
I'm glad I was called to Cambodia four years ago!
2. AZ Group recently signed an MoU to promote robotics and future technology with TKK Corporation. What role do you see robotics playing in Cambodia in the short-and long-term future and how is AZ helping to shape this future?
AZ Group recently signed an MoU to promote robotics and future technology with our partner TKK.
The goal of our AZ Group is to transform the manufacturing sector of Cambodia into an international comprehensive environment through the implementation of modern technologies and solutions.
Our approach is to help to change the face of the industrial and service sector with robotics solutions, cutting-edge technologies, and sustainable industrial solutions that can be used in all types of industrial production and logistics, service sectors, hospitals, shopping malls, and more for Cambodia.
3. AZ Group also champions sustainable investments. Could you share with us your philosophy behind sustainable investments?
Thank you Brian, according to my leadership capacity at AZ Group, my own philosophy based on sustainable investments is to promote SMEs, entrepreneurship, and sustainable investments in cutting-edge technologies, and green technology solutions. We can achieve this by implementing smart regulations and making Cambodia attractive for foreign Investors. This, in turn, will boost Cambodian trade (Export & Import) and support steady economic growth.
At AZ Group, we are strategically invested in various sectors including Fintech, banking, clean energy, EV, E-bikes, PV, logistics, Smart City projects, real estate, construction, machinery distribution, land development, healthcare, agriculture, aviation, ecotourism, and more.
I do strongly believe that private Investments are the KEY to economic growth and prosperity.
To simplify the interaction of all endogenous and exogenous factors, sustainable investments bring the positive effects of:
- Job Creation
- New Technologies and knowledge
- Economic Growth
- Increased Productivity
4. You have a long history working in the automotive industry and Banking Sector in Europe and Southeast Asia. How do you see the automotive industry evolving in Cambodia?
In fact, I also bring deep industry sector knowledge from the automotive industry (OEM manufacturer and dealerships), EV, and last but not least automotive mergers & acquisitions at Mercedes Benz in Stuttgart. I also have experience in financial services in Europe, the Middle East, and APAC/Southeast Asia.
The automotive industry in Cambodia is developing differently than in neighboring regions. The automotive market in Cambodia (registered vehicles per year) ranges between 70,000-100,000 units p.a. and 80% of the vehicles sold come from so-called gray importers, which are subject to lower import duties in the Kingdom. Then it comes as no surprise that the exclusive automotive brand dealerships (20% of the automotive market) are struggling to sell new cars due to the high import taxes (up to 138% for the combat engine).
In addition, the automotive industry is in a rapid technology transition trend towards clean energy/EV.
In Cambodia, we are currently polluting the air in the cities and provinces with around > 6-7 million vehicles on the roads (most of them are motorcycles) because these mostly very old vehicles emit toxic carbon.
Cambodia will not get around EV/Clean Energy. A rethinking of renawble energy by the respective authorities has already begun. State incentives for EV/Clean Energy and new infrastructure investments in charging stations are absolutely necessary in order to achieve de-carbonization goals. Above all, these actions will especially generate sustainable revenues & profit for the state and create new jobs within our region.
This is a key to success with renewable energy, health and prosperity.
5. Covid-19 and other geopolitical factors have certainly negatively affected economies worldwide, including in SE Asia. As economies in the region attempt to recover, where do you see the most opportunity for investors?
Despite ongoing negatively affected economies worldwide due to Covid-19, most opportunities for investors I see within emerging markets, especially in South East Asia (Cambodia, Indonesia, and other such regions).
GDP growth between 7-9% was reachable in Cambodia before the Covid-19 pandemic and for 2023 > 6%+ GDP is predicted by the Cambodian Government.
Cambodia currency is fixed to USD and we are a low-cost country with a population of ca. 17 million, 50% of which are under 25 years young.
In which other regions do you find similar growth rates (GDP in %) and positive framework conditions?
In SEA markets the best conditions for investors exist in different sectors of logistics, sustainable projects, smart cities, transportation, automotive/EV, PV, supply chains, financial services (leasing), agriculture, education, healthcare, and eco-tourism to name just a few. It is precisely in these areas that I put all my energy and knowledge into my role at AZ Group and within my additional tasks at the German Business Council/EuroCham to make my contribution to support the Kingdom of Cambodia, the Cambodian people, and the economy.
I am very confident about the coming years.
Thank you.
Wishing to EuroCham members, to all friends and partners a Merry Christmas & a healthy and successful start into the New Year 2023!
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