What's up with Cambodia's garment industry ?
Posted: Tue Jan 10, 2017 5:30 pm
Apparel factory closures debated
Tue, 10 January 2017
Cheng Sokhorng
Questions have been raised about the health of Cambodia’s $6 billion garment sector after local media reported that over 140 garment factories shut down operations last year.
Ministry of Labour spokesman Heng Sour, the source of the figure cited in local media, stood by the number yesterday, stating that the ministry documented 141 garment factory closures in 2016, nearly double the amount recorded in 2015.
However, the figure appeared misrepresented in a local media report, which omitted ministry data that showed 149 garment factories opened during the same period, resulting in a net gain for the sector.
While Sour was unable to comment on the size of the factories included in the data set, or the number of workers employed, he insisted that fears garment manufacturers were pulling out of Cambodia en masse were unfounded...
Yang Sophorn, president of the Cambodian Alliance of Trade Unions (CATU), which represents about 10,000 workers, insisted that Cambodia remained an attractive low-cost destination for garment manufacturers despite recent wage hikes. She said the relatively high number of factory closures last year did not indicate a rise in bankruptcies or relocations to cheaper manufacturing destinations.
Instead, she said that the figures likely reflected the widespread practice in the garment sector of owners shuttering their factories whenever their tax holiday expires.
“Most factories close after five years then reopen, sometimes in the same location and other times in new location, with a new name but the same owner,” she said. “They do this because they want to avoid paying taxes to the government.”
Sophorn claims she was personally aware of eight factories in CATU’s membership pool that shut down last year only to reopen under a new name. The loophole allows factory owners to avoid taxes as well as seniority-based salary schedules and benefits...
http://www.phnompenhpost.com/business/a ... es-debated
Tue, 10 January 2017
Cheng Sokhorng
Questions have been raised about the health of Cambodia’s $6 billion garment sector after local media reported that over 140 garment factories shut down operations last year.
Ministry of Labour spokesman Heng Sour, the source of the figure cited in local media, stood by the number yesterday, stating that the ministry documented 141 garment factory closures in 2016, nearly double the amount recorded in 2015.
However, the figure appeared misrepresented in a local media report, which omitted ministry data that showed 149 garment factories opened during the same period, resulting in a net gain for the sector.
While Sour was unable to comment on the size of the factories included in the data set, or the number of workers employed, he insisted that fears garment manufacturers were pulling out of Cambodia en masse were unfounded...
Yang Sophorn, president of the Cambodian Alliance of Trade Unions (CATU), which represents about 10,000 workers, insisted that Cambodia remained an attractive low-cost destination for garment manufacturers despite recent wage hikes. She said the relatively high number of factory closures last year did not indicate a rise in bankruptcies or relocations to cheaper manufacturing destinations.
Instead, she said that the figures likely reflected the widespread practice in the garment sector of owners shuttering their factories whenever their tax holiday expires.
“Most factories close after five years then reopen, sometimes in the same location and other times in new location, with a new name but the same owner,” she said. “They do this because they want to avoid paying taxes to the government.”
Sophorn claims she was personally aware of eight factories in CATU’s membership pool that shut down last year only to reopen under a new name. The loophole allows factory owners to avoid taxes as well as seniority-based salary schedules and benefits...
http://www.phnompenhpost.com/business/a ... es-debated