Cambodia’s garment industry shows good signs as factory registrations increase

Large-scale demonstrations and bloody incidents broke out in Cambodia in January this year, which made foreign apparel investors afraid to easily add and expand investment. However, recent data shows that the number of registered garment factories in Cambodia has increased significantly. The garment industry is a pillar industry in Cambodia, and the increase in the number of registered factories is a good sign for the industry.
Hugo.com learned from a recent report by Cambodia’s “Phnom Penh Post” that data from the Cambodian Ministry of Industry and Handicrafts showed that by the end of June 2014, there were 1,200 registered garment factories in Cambodia, an increase from the previous six months. 8%. The report also revealed that as of the end of last month, the number of people employed in the garment industry had reached 733,300, while this number remained at 677,600 at the end of last year.
Mean Sophea, deputy minister of the Ministry of Industry and Handicrafts, said: “This is a good sign for the garment industry.” However, in January this year, garment workers demanded an increase in the minimum wage and launched demonstrations across the country. During the clashes, police opened fire, killing five people. The deputy minister declined to comment.
Ken Loo, secretary-general of the Cambodian Garment Manufacturing Association, said that Cambodia’s garment manufacturing industry still contains business opportunities, but the growth is only the number of registered companies. In fact, after the demonstrations in January this year, factory owners are still interested in new and expanded investments. doubt. “Our membership is indeed increasing, but the rate of increase is much slower than last year,” he added.
The Cambodia Garment Association has 500 garment and shoe factory members. Of course, there are far more garment and shoe factories in Cambodia than these, as some factories have not joined the association.
Most of the garment factories in Cambodia are purely processing. Almost all garment factories are foreign-invested. The investors are mainly from Taiwan, Japan, South Korea, Hong Kong, and mainland China. Cambodian garment factories are mainly concentrated in Phnom Penh and Sihanoukville. Most of Cambodia’s clothing and shoemaking raw materials are imported from Asian countries, with particularly large quantities imported from countries such as China, Japan and South Korea. At present, Cambodian garment factories already have technological capabilities such as washing, beading, tie-dying, and embroidery, but they do not yet have dyeing and finishing capabilities. The minimum wage in Cambodian garment enterprises is US$83/month, but the average salary is around US$110-120/month.
The wage level in Cambodia is very low, which is a huge attraction for labor-intensive industries such as clothing. In recent years, due to the rising labor costs in China, a considerable number of Hong Kong and Taiwan-funded enterprises, foreign-funded enterprises and even some mainland enterprises have transferred production to low-wage countries such as Cambodia and Vietnam. However, low wages can also cause workers’ resistance. In January this year, Cambodian garment workers held a large-scale protest that resulted in the death of five people. After this incident, orders from Cambodian garment factories declined to a certain extent.