Koreans plan to move base from China to Cambodia

10 Jul '10

2 min read

Apparel firm owners of South Korea, with plants in China have been planning to shift base to the Kingdom of Cambodia, to benefit from cheap labour there, informed, South Korean Chamber of Commerce President, Nam-Shik Kang.

Owing to increasing wages of labourers in China, quite a few investors from Korea are intending to relocate their manufacturing base to Cambodia, added Kang.

The reason behind the increasing wages of Chinese work force is that most of them are now moving towards the rapidly growing IT and automobile industries, wherein they can demand for increased and improved pay packages.

Hence, in order to retain workers in apparel firms, the Chinese government was agreeing with the demands for increasing wages. But apparel firms cannot survive in China with such high wage structures and therefore factory owners are now looking at shifting manufacturing base to other nations such as Cambodia, averred Kang.

The apparel industry of Cambodia is one of Kingdom's biggest exporters. In 2009, the sector was adversely affected, as exports reduced by 15.83 percent to $2.658 billion, informed Ministry of Commerce.

However, Kang's comments have come at a time, when the government decided to increase the minimum wage for apparel firm labour force in Cambodia to $61 from $50 per month.

But Oum Mean, Secretary of State from the Ministry of Labour and Vocational Training informed that, Cambodia should take utmost benefits from the new interest of Chinese production units, who are lured to the Kingdom owing to cheap labour, or else investors might run away, leaving Cambodian labourers to suffer.

As of now, about 35 South Korean apparel firms are operating in the Kingdom, informed Kang, and the apparel segment enters a period of meek growth, especially after a fall in US retail demand that had affected exports in 2009.

However, during the first five months of 2010, apparel exports of Cambodia increased to over 11 percent as against the first five months of 2009.

Fibre2Fashion News Desk - India

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