Recycle firm Renet Japan's profits in Cambodia surging, buoyed by used-car sales
TOKYO, NNA - Japanese recycle firm ReNet Japan Group Inc. aims to expand its business in Cambodia where its profits are surging on the strength of used-car sales.
ReNet Japan’s operating profit from the business in the nine months to June 2019 soared 8.1 times year on year to 396 million yen ($3.7 million), according to the company’s earnings report released last week.
Used-car sales contributed to the solid performance as the Nagoya-based firm has sought to supply “safe and high quality” used cars to seize on the rapid motorization in Cambodia, the report said. The company will endeavor to further expand its business in the Southeast Asian country by launching car leasing services and strengthening its talent placement services.
ReNet Japan’s business in Cambodia chalked up operating revenue worth 3.52 billion yen in the nine months to June 2019, 6.1 times year on year, accounting for more than 50 percent of the group’s overall operating revenue which amounted to 6.58 billion yen in the period, up 93.4 percent year on year, according to the report.
Used-car sales accounted for 90 percent of ReNet’s operating revenue in Cambodia. This segment has been handled by ReNet Japan (Cambodia) Co., a subsidiary established in February last year, which has been marketing used cars, trucks and agricultural machinery. It sold 689 units in the nine months, up 2.4 times year on year, with the sales value amounting to $2.37 billion, up 3.7 times.
ReNet Japan has drawn on its reuse business know-how to supply used agricultural machinery and equipment from Japan to Cambodia, as part of its cooperation with the “Sustainable Development Goals” (SDGs) project pursued by the Japan International Cooperation Agency (JICA) in line with the United Nations global agenda.
The project has led to ReNet Japan’s used-car business in Cambodia where it conducts vehicle inspections based on Japanese standards and only selects excellent used cars for sale, the report said. It has been establishing systems to locate the positions of cars by using the Internet of Things (IoT) and retrieve vehicles from users who have difficulty in paying back loans so that the vehicles can be resold. These services with their innovative methods have “won confidence from the middle and wealthy classes” in Cambodia where used cars account for about 90 percent of the motor vehicle market, the report said.
ReNet Japan is starting up car-leasing services in Cambodia in the July-September quarter, in a joint venture with SBI Holdings Inc., which is engaged in internet financial services, by acquiring a local leasing firm, ELIN Leasing Plc., the company said in a briefing.
The leasing firm, renamed Mobility Finance Cambodia Plc. is to handle cars, motorcycles, motorized tricycles and agricultural machinery, ReNet Japan said. The leasing firm is 51 percent owned by ReNet Japan and 49 percent by SBI Holdings.
In the talent placement segment, ReNet Japan set up a consolidated subsidiary, Metrey HR Co., in January last year. In collaboration with the National Polytechnic Institute of Cambodia, ReNet Japan has been providing Japanese language and other lessons. It also plans to build a boarding training center on a plot adjacent to the institute to supply talent to Japan at an annual rate of 1,000. The center is due to open next spring following construction starting this autumn, according to the company.