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Garment sector has high percentage of import content
19
Mar '09
The Cambodian textile and garment industry achieved an export turnover of US $2.6 billion in 2008, the sector with the highest export earnings and amounting to nearly 70 percent of overall exports from the country. But this has come at a very high cost.

The sector has spent a massive $1 billion on import of raw materials to fulfill the requirements of the industry in 2008, which has increased the overall costs of the sector, but the saving grace has been the FTA's with the European Union and the US.

In normal circumstances, in the absence of the FTA's, the Cambodian garment industry would have lost the cost competitiveness, vis-à-vis other countries of the Asian sub-continent, with a majority of these imports having originated from China.

Raw materials of Chinese origin accounted for 66 percent of all imports by the garment industry, with the rest accounted for by Taiwan and South Korea. A major amount of the bill is spent on the import of fabrics to manufacture garments.

Experts say that the local policies are not conducive to attracting investments from overseas investors, who also consider the fact that the garment sector is strike prone considering the high number of strikes in the garment industry in the last two years.

They add by saying that if the government was to promote policies conducive to investments in the sector, raw material at lower costs would be available to the garment exporters as well as stem the flow of valuable foreign exchange from the country.

Fibre2fashion News Desk - India

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