Cambodia garment factories close amid political uncertainty

phuketrichard · Post by **phuketrichard** » Tue Aug 23, 2016 1:32 pm

Hard times ahead;

Political uncertainty in Cambodia has forced the garment and footwear industry to look to alternative countries to meet production needs, forcing more than 70 factories to close and a sharp drop in orders, a senior official from the Garment Manufacturers Association in Cambodia (GMAC) said.
“However, it is not only the impact from outside the country, but also domestically, since investors are looking for profit with low operational costs. So if the operational costs in other countries are lower than Cambodia, they could turn to those countries. We have an issue on electricity and labor costs that we be must be alert to,” she said.

She stressed that it was too early to judge whether the industry was in trouble, as the 70 closed factories need to be compared with the 20 which have opened, which may be bigger or more important.

in contrast to GMAC’s figure of a 30% drop in buyer’s orders suggesting trouble in the garment sector, recent figures released by the ministry paint a far healthier picture. The ministry stated that total garment and footwear exports in the first quarter of this year have increased by 39% to $2 billion.

http://www.bangkokpost.com/news/asean/1 ... ncertainty
so who's lying?
70 companies, thousands of employees out of work... 20 new ones...

mammothboy2 · Post by **mammothboy2** » Tue Aug 23, 2016 2:53 pm

Labour costs are only one of the costs of production.

Almost everything needs to be imported and electricity, in particular, is expensive compared to its cost in other countries.

Kuroneko · Post by **Kuroneko** » Tue Aug 23, 2016 4:09 pm

Comment on GMAC report

However, William Conklin, country program director of the AFL-CIO’s Solidarity Center, said the competitiveness of Cambodia’s garment industry was not under immediate threat, citing a recent report from the International Labour Organization.

“It seems that’s what you’d expect [GMAC] to say, they’re trying to keep wages down,” he said.

“As everyone saw in the recent ILO report, [Cambodia’s] output is actually increasing, this despite the relatively large jump in wages this past year.”

Last month, the ILO released its first quarterly Cambodia bulletin, saying that the first quarter of the year had seen solid growth in the garment sector, despite the minimum wage increase to $128 which went into effect this January.

The ILO reported that garment and footwear exports for the first three months of 2015 totalled $1.5 billion, up 10.6 per cent relative to the same time last year, while factory openings exceeded closings by 16.

“What that bulletin shows is that in the first quarter of 2015, the industry appears to have continued to perform solidly, with exports increasing, employment growing, and a net increase in the number of factories in operation,” said the ILO’s chief technical advisor on labour standards in global supply chains Matthew Cowgill.

Cambodia Garment and Footwear Sector Bulletin Issue#2
Solid first half of 2015 for Cambodia's garment and footwear sector

The ILO’s Cambodian Garment and Footwear Sector Bulletin examines key trends in the industry, including exports, factory openings and closures, employment, and wages. The Bulletin is intended to provide a comprehensive, neutral source of information for stakeholders in the Cambodian garment and footwear sector, and to assist them in social dialogue and wage negotiations. This is the second issue of the Bulletin. http://www.ilo.org/asia/whatwedo/public ... /index.htm