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High import bills hits RMG sector
Mar '10
Recently, reports have followed from the Ministry of Commerce that, during 2009, Cambodia imported raw materials worth US $1.5 billion, totalling to around 500,000 tonnes, to be used in garment manufacturing.

According to the analysts, owing to scarce availability of raw material locally, which adversely affected the competitiveness, they were required to import raw material in bulk.

Ok Boung, a State Secretary at the Commerce Ministry, stated that as at present, while their garment sector is prospering, at the same time, raw material supply is scarce and thus such imports will have to be continued in future too.

As per the Ministry reports, 415,620 tonnes of fabrics and yarn have been imported from countries like China, Taiwan, Japan and South Korea. Also the government data reveals that, 243 of the factories registered in Cambodia, exported garments worth $2.38 billion during 2009.

Cheat Khemara, an officer of the Garment Manufacturers Association of Cambodia (GMAC), opined that due to import of huge quantity of raw material, Cambodia is losing its cost competitiveness.

He also informed that, at present though such raw material imports have been made tax-free by the government, but still they are incurring higher cost for the same, because they spend considerably towards the transportation costs.

He further said that, they expect of the government to attract and enhance investments in cotton and fabric production in Cambodian factories, thus facilitating production of economical products to compete with those of the neighbouring countries.

Factories manufacturing cloth and thread did exist in Cambodia in 1960, but the sector failed to recoup the effects of the civil war.

Chhen Kimlong, Professor of Economics at Cambodian University, stated that even if Cambodia plans to manufacture these raw materials within the country, lack of technology and expertise are the hindrances which may not allow the production cost to go below the present costs of imports.

Fibre2fashion News Desk - India

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