In Conversation with… Christian Berger
Today, our Managing Director, Kevin Britten, is IN CONVERSATION WITH Christian Berger, one of our Consultants at Top Consulting Asia. Christian has an unparalleled track record in Cambodia’s security sector, with nearly 25 years of experience. He’s built the nation’s largest security company, co-founded Brinks Cambodia, and provides due diligence for international investors. Learn more about how Christian and Top Consulting Asia can help your business.
Duration: 31 minutes
Full transcript
KB: Hello and welcome to the latest in our series of podcasts ‘In Conversation With…’ I’m Kevin Britten and today I’m honoured to have with me a pillar of the foreign business community in Cambodia, a man who’s lived and worked in Phnom Penh for 25 years, Mr. Christian Berger. Hi Chris and thanks for joining us today.
CB: Well thank you for having me. I’m happy to be here.
KB: Great. By way of introduction Chris is an American and as a young man he served in the US Navy, graduated from Oregon State Police Academy and he’s the holder of two bachelor’s degrees.
For about 10 years Chris was a partner at MPA International in Cambodia. He successfully built the company to being the biggest security company in the country and in 2010 he brokered the sale of the company. In that same 2010 he went on to found United Studies Group which provides risk management services, business intelligence, general business services and USG still operates today. In fact, next month USG will celebrate its 20th anniversary.
Chris is a co-founder of World Bridge Secure Logistics, a cash in transit company in Cambodia and Myanmar which has now been acquired by Brinks Global Services which is a multinational security company and Chris is still involved with assignments in Thailand, Myanmar, China.
USG, coming back to that, Chris’s consulting company provides risk management services and he’s got two core service areas, risk management and investment consulting. He also represents Scafco, grain storage products which is an American company putting major agriculture, well grain which basically here means rice, rice storage products. He’s bringing those into Cambodia.
Again, Chris thanks for joining me today. Always happy to have a Cambodia market expert here on my podcast. So, we’re going to talk about the state of security. Could you tell us about the state of the security industry today in Cambodia?
CB: Sure, but before I discuss the private security industry today, I need to go back a bit and talk about how it was when I first arrived. I came here from Vietnam to Cambodia in 1999. I took over MPA security company soon after. It was actually officially February 1st, 2000. At the time Cambodia was a country just coming out of war, strife, all kinds of social problems. People had guns. It was a dangerous place and violent crime was very high. Murder, robbery, rape. It was not a pleasant place to be but the private security industry though was just starting to happen. As I continue with my conversation here, it actually started to boom for the next 10 years. I founded MPA with about 150 guards when I started. When I sold the company, it was over 3000 personnel. We were actually one of the biggest service providers in the country.
So going back, when I first started the guards that we had at the time were demobilized soldiers mostly. And they were trained. They wanted to work. They had a strong work ethic. We followed the labour law. They worked mostly eight hours a day but sometimes they got over-time. We never had a problem with recruiting people, and the business really developed. And also, when I started there was only a few private security companies. MPA was the first. Yeah so, the very first private security company in Cambodia.
Before that there was mostly soldiers or police doing this sort of work. My chairman, the vice president of the company based in Thailand and myself, we worked closely with the police to sort of develop the industry and to give them an idea of how to do the private security industry here. And it worked. As time went on, Cambodia’s economy flourished obviously. It’s still booming. And the demographics have changed when I’m talking about human resources.
So now for instance today in the security industry most of the security guards are from villages. They’re from the provinces. Many of them have never been to Phnom Penh before. And they want to work. They want to work a 12-hour shift. Because if they work an eight-hour shift, it’s not enough because they send money back home.
KB: Okay. So, they’re happy to have over-time every day.
CB: Yeah, or a 12 hour shift. Now the labour law here is a bit vague about that. It’s supposed to be eight hours. And then of course if they work an extra four that’s supposed to be over-time though. So, the government just announced recently the new minimum wage which is based on the garment sector.
KB: Yeah. And I believe it was what they say, it’s gone to $204. But of course that’s based on a 48 hour week.
CB: That’s right. And the security industry follows that. Okay. And the changes today also is that you have NSFF which is the social security. So now they have they have medical they have a retirement program so to speak. Kind of like social security back in the States.
KB: Yes, there is an NSSF pension as well.
CB: Yeah. And this is a game changer. What this means now is that people working in the security industry, they don’t want to move. They want a job that provides them their retirement. So, for the future, and they don’t want to move around. So the HR, the recruitment part of the industry is improving though some companies today aren’t really following that. Okay. And one of the other issues in the industry today that’s different than before is compliance. Yes. International companies that come here require a checklist of you know the environmental assessment impact of this or that. You know what I mean? You know, do you have a business continuity plan and can /we see it and all this stuff?
KB: So you see Cambodian security guards will moving from non-compliant to more compliant companies.
CB: Exactly. And that’s the trend we see today. And most likely that will continue. The industry today only has really one international security guard company.
KB: Right. So the rest are 100% local Cambodian companies.
CB: Well, not 100% but privately owned by individuals. You know, the partnerships with both foreigners and Cambodian citizens.
KB: Okay. So partnerships, international partnerships quite are quite usual in your industry.
CB: Yeah. I mean, I was one of them.
KB: So that’s quite a lot of changes in the years that you’ve obviously been in the industry in Cambodia. But surely technology has impacted the sector as well, particularly the man-guarding side of the business.
CB: Right. So there has always been, I guess you can say technology in our man-guarding business. There’s always been CCTV’s and cameras. Even though when I started, they used the VHS and, you know, it wasn’t very sophisticated. One of the things that we also started off with were the guard patrols. We call it a wand. What it is, every 30 minutes or every hour they need to patrol the facility or the perimeter. And they take a little like a wand with them with a chip in it and it blinks and then you can see it on the computer.
KB: So it’s like an electronic check in.
CB: Exactly. But that’s all changed now. Because today the trends are getting more sophisticated.
KB: For instance, like we can talk about AI a little bit and how that might impact the industry and how it’s starting already.
CB: You know, they have these wires that you can put on the walls, the perimeter of a facility. And that wire is sensitive and it can tell you how much weight is on it or on it or where exactly something is climbing. Is it a cat or is it a human? And then the cameras will automatically focus on that one area along with lights.
KB: Okay. So the wire is sensitive.
CB: It’s a access control device that’s being used. One of the latest technologies. Yeah. And I’ll give an example. Let’s say a warehouse, a factory, a facility, which in the past we had maybe two or three guards at let’s say at night on a night shift. Yeah. And that’s a lot of people to have. Today you only need one really if you have the right electronics security systems.
KB: One guy can do the job of three with this technology.
CB: Right. Because for instance, the facility itself would have an anti-intrusion system, which consists of motion detector cameras, the sensitivity wire going around the top of the wall. And if let’s say if a cat would jump on the wall and trigger that, the lights would come on, the cameras would notice it and an AI would notice that it’s a cat. Okay. And it can inform the guard or anybody or the management on their on their phone. If it’s not a cat and if it’s a person, it can automatically send a message to the management, the guard and even the watch commander of that private security company, right? Even or the police. This is all done remotely.
KB: It’s all done remotely by AI. Right. So this has made quite a lot of changes to the sector. More and more technology coming in.
CB: Yeah. It is in Cambodia. It’s already pouring in from, for instance, China, you have you have products like HK, HIK, Huawei and these other products. There’s a lot of European systems coming in now, Gallagher and others that are quite sophisticated and more expensive. But yeah, a lot of companies are actually investing in these. But you’ll never get rid of the guard, but you’ll just reduce the number, probably.
KB: Okay. So that’s the main purpose of this technology to improve the level of monitoring
without expanding the head count.
CB: Exactly.
KB: Okay. Right. Well, moving along to another part of this sector, most of our listeners probably don’t know the industry term ‘Cash in transit’. Can you talk a bit about that side of the business, where you see ‘Cash in transit’ going and maybe the impact of technological changes like mobile money. Surely this means that more people are paying for things on QR codes, for example, and fewer people are actually using cash.
CB: Well, as one of the owners of Brinks, Cambodia, I don’t want to admit that. I think cash is king and I like cash. But just to give you a brief introduction on cash in transit and how it began in Cambodia.
Well, it began with me. It was 2004. I was running an MPA. And at the time, there were many payroll heists and some of them ended up in fact, I got a story about that.
KB: People were doing payrolls in cache?
CB: Oh, just it was unbelievable. They would go to a bank. They would have a driver and their friends, you know, a cousin with a gun. It wasn’t very professional.
KB: Hard for a young Cambodian today to imagine being paid in cash. Your salary being, payroll being done in cash.
CB: Well, very hard. But we were a long way from there. Well, everything we are. Everything was done in cache back then. I got a letter from the director of the National Police at the time, His Excellency, Hok Lundy sent me a letter and said, you know, we think we need this business. And strangely enough, at the time I was thinking about this, I didn’t know much about it. But I, along with my colleagues, and it was a steep learning curve, but we ended up starting the company in 2004 and brought over the first armoured cars from Thailand. We set up the business and we got customers right away. I’m sure, you know. I will say that I remember distinctly getting an inquiry from a garment factory who wanted a quote. And I gave him the quote. I think I can’t remember what it was. Maybe $100 or something. To take his payroll, maybe $300,000 to his factory. And he decided it was too expensive. Sadly, a month later, he was shot dead. Yeah, he was robbed. So he was held up. He was held up. He was probably an inside job. And that’s just the way things were back then. It was more, as I said earlier, there was more violent crime back then. A lot of people had guns. The Cambodia of today is completely different.
But just to get back to a cash in transit and where we are today. I set up a cash in transit company after we sold MPa with my partner, the World Bridge Group. And we built that business and then we sold it to Brinks. Well, it’s a joint venture really. Brinks is the majority shareholder. And today it’s called Brinks Cambodia. The business is flourishing. It’s doing well. We have a lot of banks and financial institutions in Cambodia.
KB: Sure. Because you’re a logistics company. In a way, you move things around.
CB: We’re secure logistics.
KB: Secure logistics. Right. Meaning you service different banks, ATMs, for example.
CB: Right. We also service gold mines, and jewellery shows and fairs. And Brinks has brought the international standard to that, the Brinks Global Services. And we’re insured globally. And it’s really worked out well. And today we’re building a new facility. And you mentioned technology. Well, today we’re building that new facility where we can service and import ATM machines, cash deposit machines. And for instance, retailers can either leave or buy one of our Brinks boxes. It’s a cash deposit machine that automatically shows it for the cash they put in. It’s automatically shown in their bank account.
KB: Okay. Although the cash itself doesn’t have to leave the store.
CB: Exactly. That’s right. Okay.
KB: So you then presumably come along and empty that box at some point.
CB: Yes. And handle that cash in transit. All cash. So basically, it’s cash, jewelry, gold. We handle anything of value. We even did a shipment of SIM cards one time. Yeah.
KB: Anything with value? Art?
CB: Sure. Okay. We were involved in much of that. So today, Brinks, the name Brinks, is a big one of cash and transit globally. Yes. And I think in Cambodia, of course, it’s now well known. It wasn’t before. Yeah. So I think we really made a difference here.
KB: Yeah. So far, so good. Right. Great. So this is fascinating. But I’d like to move on to the other side of your work. At USG, you work in risk management. Can you talk about what that means, practically speaking, and what kind of companies use your services?
CB: Well, okay. So risk management is basically, well, it’s mitigating risk. So what does that mean? Well, companies and individuals that want to invest in, well, say Cambodia, because I’ve also done jobs outside of Cambodia. But if they’re interested in doing a joint venture or just 100% wholly owned or coming into the market, there’s different things that they can do. For instance, my job is basically background checks. I can check on a company, make sure it’s there. I check physically the company, the address, the licensing and everything. And are they who they say they are? I can even investigate their customers. Right. And very importantly, discrete interviews with individuals in that sector or people that know the principal of maybe this particular company.
KB: Yeah. So this is due diligence?
CB: This is due diligence. This is this is risk management. It’s a broad, the term risk management is rather broad that there’s many different subdivisions of that. But I focus mostly on the commercial side. Okay. For instance, also some companies that need to be compliant will ask me to do a physical security assessment of a building or a property. That’s another side of it. You’ve probably heard of the private investigator doing, you know, spying on some guys or somebody’s spouse. I don’t do that. I’m not involved in that. Sure. I’m simply providing information on a company or an individual that somebody wants for commercial reasons.
KB: Right. So what you’re saying is risk management is very often, for you, a part of investment advisory work. What kind of investment projects have you worked on?
CB: I’ve worked on many. And well, they’re mostly confidential. I don’t want to I don’t want to name names. But over the years, I’ve worked on several. And well, banks, hotels, resorts, these sort of things. You know, I can talk about one of the banks that was interested in investing in Cambodia and joining a local partner. And I did most of the groundwork on, for instance, just checking that this local partner is who they say they are, you know, what they have. I mean, I don’t go in too far. I don’t get bank statements or this sort of thing. But I can get licenses and other documents.
KB: Right.
CB: Discrete interviews, inquiries, just a lot of background checking. This is very important. And the foreign bank did eventually come to Cambodia and enter the market. Okay. And I did the same with a resort. It was in Sihanoukville. And some foreigners, they wanted to invest in a resort with a local partner. And I did the work on that and it turned out successful. They were happy with the partner and everything else.
Other parts of my job and risk management, I’ve been involved in counterfeiting.
KB: I think you mean anti-counterfeiting.
CB: Exactly. Right.
KB: What kind of products have you worked on anti-counterfeiting for?
CB: Okay. Well, I’ll give you, for instance, the International Federation of Spirit producers hired me to check on two brands in particular, Johnny Walker, whiskey brands, black and red, and also Chivas Regal. And I brought the police into this. The police at the time, it’s a long time ago. The police at the time were very interested in this because they were major consumers of these products. So they were very interested to know if they were counterfeit or not. And yes, we eventually found out that they were being counterfeited in Vietnam and smuggled across the border to Cambodia. And I was a part of that and also set up the training part with the police to help them do their job better. Yeah. Another job I did is, I don’t know if I should name company names, but I’ll go ahead, a pharmaceutical product. Pharmaceutical products. Right. So pharmaceutical counterfeiting is actually a very serious issue. It is. But at the time, and again, this goes several years back. Pfizer came up with their, I guess it was a fairly new product back then, Viagra. Perhaps you’ve heard of it. They were concerned about counterfeiting here in Cambodia. And I think the active ingredient of that product was being used. So the product itself, the counterfeit product was actually working. Oh, okay. But they made the pills the same as Pfizer, actually they counterfeited everything to make it look like Pfizer, to get a better price. Sure. I went to every pharmacy to buy Viagra. I got all the samples and I sent them off to Bangkok for analysis. Right.
KB: So through analysis, they could tell whether it was the real product or a counterfeit.
CB: Exactly. Yeah. Okay. Yeah. So, you know, this is just some examples. Today, risk management is still very important, especially for foreign companies that want to enter the market.
KB: Sure. They should always do their due diligence. Yes. I mean, your activity seems to be mostly investment related. So you have a lot of insight into the investment, to the inbound international investment situation. How do you see that right now? And where do you think that that’s going to go in the next few years?
CB: Well, investment into Cambodia today, we’re talking about post COVID here is still dominated by China. Chinese investment is the largest now by far. But the problem that we have in Cambodia today is we have basically a real estate collapse, almost sure. Property development today is not a good business to be in. They overbuilt. There’s too many condos and too many offices. Yeah. So the investment in this sector is lacking. But the Chinese still play a major role. And I believe they’re going to increase that role. Other countries, Asian countries in the region, are also big investors Vietnam, Singapore, and Thailand in particular. There’s new players coming in as well, India.
KB: So if property is one of the darkest spots for investors, what are the bright spots?
CB: Agriculture and processing. And I’m talking about upstream and downstream. So integrated agricultural projects like a rice mill on a rice farm. Integrated means everything. There are huge opportunities here in Cambodia. Agriculture and processing is definitely a bright spot. I mean, I’ve seen actually I’m a member of the Cambodian Rice Federation because as you mentioned, I’m also involved with SCAFCO and silos. How I got to that business is because of due diligence. And that’s another story. But I don’t want to spread myself then. But agriculture is definitely a bright spot.
Light manufacturing is still good. I’ll give you an example. In China, the diamond polishing business, your Laurelton Diamonds, they shut down in China because of cost and other issues. And they were going to move to Vietnam where they already have a factory. But they were convinced, I think some of the guys that Brinks maybe convinced them to come here to Cambodia. And it turned out to be the best decision they ever made. Today, of course, Tiffany now bought the Laurelton company. And the diamond polishing manufacturing facility here today is their biggest. It’s a modern facility. It employs thousands of people. And it’s a great success story. The reason why I brought that up is because of course, Brinks, we’re the vendor.
KB: So, so basically, you’re saying the adding value, not just agricultural products, other products like diamonds, for example.
CB: You see, that’s where the investment opportunities lie right now. Right. Well, the labour here is obviously cheap. The diamonds fly in from Belgium and they’re polished here and then go back. But, you know, there’s other opportunities. You know, a lot of bicycles here are assembled, assembly here. Ford and other companies have come here to assemble their vehicles even.
I think this is where we are today. What I see now, I see opportunities in like a coconut plantation integrated. Cashew nuts is good. The rubber industry, bananas. It’s all, there’s a lot of opportunity here. I would like to see more companies take advantage of it. Obviously, the Chinese are.
KB: So, as an American, where are the, what’s the landscape for US-based US investment in Cambodia?
CB: Okay. Well, I’m glad you asked. I’m a member of AMCHAM and, you know, my, my, wife has a, as an import-expert company importing American products. And of course, I’m, I’m providing American services, Brinks and other, and other products here. But, you know, they’re very focused on large American companies. The Fortune of 500. Sure. You never see the small, medium-sized American companies actually coming out internationally and setting up here.
KB: It’s your major companies, the real investments.
CB: But I think there’s many opportunities here for these medium-sized enterprises. Because what’s happening now is the supply chain in Asia, China is winding down. And the countries that are benefiting from that are Vietnam, Indonesia, and the Philippines even. Cambodia could easily benefit from that. So. You know, cheap labor, light manufacturing. The Americans should, should definitely look into that. Now, there’s large American agricultural companies here. Some of them, I believe, have invested in cassava up north in the country. But again, there’s so much opportunity for, for agricultural processing. Yeah. I would, I would definitely advise American companies would look into that. And recently, one has, especially in the, for the rice industry.
KB: Okay. Well, I hope all of you found that interesting and insightful. I’d like to thank Chris for joining me today. I want to add that Chris and I work together through top consulting. So if any of you want to contact Chris, you can use the contact page on our website, which is Top Consulting Asia. That’s: www.top-consulting.asia. And you can contact Chris or myself through that website. If you want to know more about security, due diligence, risk mitigation.
Chris, thanks for sharing your insights with us today.
CB: Well, again, thank you for having me. It’s always a pleasure for me to discuss the industry and talk about it from, from the very beginning until today. And I’m, you know, I feel honoured to have played a part in this industry and to watch it grow. And yeah, thank you very much.
KB: You’re welcome. And thanks to all of you for listening today. And well, I look forward to you joining us next time. Thank you.