Japanese motor maker Nidec is to close its only factory in Cambodia and shift the work to Thailand, blaming continued disruption along the two countries’ border.
Nidec Die-casting (Cambodia) will stop production at its plant in Poipet, Banteay Meanchey province, on 22 October, according to reports in Japan and Cambodia.
The factory employs 724 people. It makes die-cast components for precision motors, including parts for the small motors used in hard disk drives.
Until now, those parts have been trucked across the border to Nidec’s other operations in Thailand.
The company concluded that production in Poipet could not continue because there was no clear prospect of normal cross-border transport resuming, the reports said.
Nidec is arranging replacement production and does not expect the closure to have a significant effect on its financial results.
The work will move to an existing site in Thailand, Nikkei Asia reported. Nidec lists two Thai die-casting factories, at Borwin and Pinthong, both of which make components for precision motors.
The company has not said which site will take on the Cambodian work.
A supply chain built on the border
Nidec set up its Cambodian subsidiary in March 2012 under a “Thailand Plus One” model, in which labour-intensive work is moved to lower-cost sites near Thailand while staying linked to Thai factories, warehouses and ports.
Poipet suited that model. It sits directly across the border from Aranyaprathet in Thailand’s Sa Kaeo province, about 230km (143 miles) from Bangkok, and Laem Chabang port can normally be reached in about three and a half hours.
A March 2025 report by the Japan External Trade Organization found that most foreign manufacturers in Poipet had built their supply chains around Thailand rather than Cambodia’s main port at Sihanoukville, which is much further away.
That advantage disappeared after armed clashes on the border in 2025 led to restrictions and the prolonged closure of land crossings.
Cambodia’s Ministry of Labour and Vocational Training said goods from factories in Banteay Meanchey used to reach Thai plants within one or two hours. Companies later had to ship by sea, sometimes via a third country, or fly urgent orders.
In some cases transport costs rose “dozens of times”, ministry spokesman Sun Mesa said. He blamed the Poipet factory closures on higher logistics costs and falling orders since the border was shut.
Cambodian officials have said Thailand alone was responsible for closing the border. Thai authorities say the restrictions remain necessary because ceasefire terms and security agreements have not been fully observed.
Workers promised pay and retraining
Cambodia’s labour ministry first confirmed the closure in August. It said Nidec had agreed to pay all outstanding wages, compensation and other benefits required under Cambodian law.
The ministry said it would monitor the process until the factory shut and help workers register for new jobs through the National Employment Agency. Free vocational training is being offered to those who want to switch industries.
Nidec is the third large factory in Banteay Meanchey to close or announce a shutdown this year.
Chinese-owned ML Intimate Apparel (Cambodia), with 683 workers, closed in April. Thai-owned Hi-Tech Apparel (Cambodia), with 2,532 workers, ceased operations at the end of August. Together, the three closures affect almost 4,000 people.
Labour rights groups have warned the impact will spread beyond the factories, as lost wages hit landlords, food sellers, transport operators and other businesses that rely on workers in Poipet.
Unlike the two garment factories, the Nidec plant was part of a cross-border Japanese manufacturing network rather than a stand-alone operation. Its viability rested on fast, predictable access to Thailand, the same advantage that first drew the investment to Poipet.
Nidec is not pulling out of South East Asia. It still lists several manufacturing bases in Thailand, along with operations in Vietnam, the Philippines, Malaysia and elsewhere in the region.
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Sources
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