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Garment sector under threat of losing US market
05
Aug '08
Garment sector of Cambodia is threatened by a slowdown which is most likely to hit the country if productivity of the manufacturing enterprises does not increase from the present levels.

In an exclusive interview with Fibre2fashion, Mr Cheat Khemara, Senior Labor Officer for the Garment Manufacturers Association of Cambodia (GMAC) stated, “In the first quarter of 2008, garment exports recorded a marginal increase of 5 percent to touch US $684 million against $654 million in the corresponding period last year and $604 million registered in the same period of 2006. However, what is arousing concern is that even though exports to Canada and EU remained steady, those to the US market have dropped significantly.”

The garment sector is already in a sluggish mode and to add to it, rising cost of operations is playing havoc in the industry. There are fears that if measures are not taken to check this worsening situation, a large number of factory owners both domestic and foreign would move to other favourable places leading to large scale unemployment.

Additionally, Mr Cheat also asserted that the Ministry of Labor would soon implement the workmen compensation charge of 0.8 percent on every worker's wage as contribution to the National Social Security Fund.

This implies that, factory owners will have to pay an additional $0.8 per worker to the Government, thereby adding on to the existing cost of the garment factory operators. This apart, high electricity costs, low productivity and recurrent strikes have forced some 326 factories operating in Cambodia to close down last year, rendering around 360,000 workers jobless.

Even the Cambodian Chamber of Commerce has warned that if the apparel sector fails to pick up pace, it could collapse due to loss of business to competing countries like China and Vietnam.

Fibre2fashion News Desk - India


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