PHNOM PENH, Jan. 9 (Xinhua) -- Garment, the foremost pillar industry of Cambodia, has an urgency to survive its crisis in the upcoming days, amid the ongoing global financial crisis and the recession of traditional demand from the U.S. market.
LESS EXPORT IN 2008
At an annual meeting of the Association of Southeast Asian Nations' Federation of Textiles and Apparel (AFTEX) which was held here on Thursday, Cambodian Commerce Minister Cham Prasidh said that the garment industry saw a 2 percent decrease in its export in 2008 over 2007.
"This is better than my own expectation. I thought that it would have been down 5 to 7 percent," said Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia (GMAC).
Previous local reports have attributed it to the withering demand of traditional client countries.
Around 70 percent of Cambodia's garment products were sold to the United States, 4 percent to Canada and the rest mainly to European countries.
The export volume of the garment industry used to account for over 70 percent of the country's total annual export volume.
In 2007, garment export earned 2.93 billion U.S. dollars for Cambodia, according to official figures.
CRISIS AHEAD
The garment industry of the kingdom will face a 6- to 9-month-long crisis in 2009, due to lack of profitable orders, Van Sou Ieng said at the AFTEX meeting.
"I think that we will have a crisis 6 to 9 months long this year," he said.
Due to the global financial crisis, especially the U.S. economic recession, most garment factories could not secure new worthy orders and the current orders could only sustain them until March, he said.
"The crisis has propelled some buyers to give prices too low to be acceptable for the producers, so they have no choice but shut down their factories," he said.
Over 20 or even more out of the 400-strong garment factories of the kingdom have closed, leading to the unemployment of some 25,000 workers, he added.
Meanwhile, suspension of bank credit also spilled oil over the troubled water of the manufacturers, he said.
ALTERNATIVE MARKET
Japan might become the alternative market for the garment producers of Cambodia, as the demand of traditional purchasers has sharply sagged, said the chairman, adding "currently, Japanese orders are few, because their quality demand is so high that we can hardly meet it."
Fortunately, Japanese buyers have already listed some suggestions which could help Cambodia improve product quality, he said.
"Two directors, rather than one, supervise the operation of every 10 workers. This is the open sesame that they give us," he said.
The United States, as the largest buyer of Cambodian garment products, may need 2 to 3 years to cope with its economic recession, so it has become ever more urgent for Cambodian garment producers to find new markets, he added.
The garment factories of Cambodia used to employ some 300,000 people and have been the largest foreign currency contributor for the kingdom.
Garment, as a labor-intensive industry, is well-rooted in Asian countries, which still encompasses China, Vietnam and Indonesia.
LESS EXPORT IN 2008
At an annual meeting of the Association of Southeast Asian Nations' Federation of Textiles and Apparel (AFTEX) which was held here on Thursday, Cambodian Commerce Minister Cham Prasidh said that the garment industry saw a 2 percent decrease in its export in 2008 over 2007.
"This is better than my own expectation. I thought that it would have been down 5 to 7 percent," said Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia (GMAC).
Previous local reports have attributed it to the withering demand of traditional client countries.
Around 70 percent of Cambodia's garment products were sold to the United States, 4 percent to Canada and the rest mainly to European countries.
The export volume of the garment industry used to account for over 70 percent of the country's total annual export volume.
In 2007, garment export earned 2.93 billion U.S. dollars for Cambodia, according to official figures.
CRISIS AHEAD
The garment industry of the kingdom will face a 6- to 9-month-long crisis in 2009, due to lack of profitable orders, Van Sou Ieng said at the AFTEX meeting.
"I think that we will have a crisis 6 to 9 months long this year," he said.
Due to the global financial crisis, especially the U.S. economic recession, most garment factories could not secure new worthy orders and the current orders could only sustain them until March, he said.
"The crisis has propelled some buyers to give prices too low to be acceptable for the producers, so they have no choice but shut down their factories," he said.
Over 20 or even more out of the 400-strong garment factories of the kingdom have closed, leading to the unemployment of some 25,000 workers, he added.
Meanwhile, suspension of bank credit also spilled oil over the troubled water of the manufacturers, he said.
ALTERNATIVE MARKET
Japan might become the alternative market for the garment producers of Cambodia, as the demand of traditional purchasers has sharply sagged, said the chairman, adding "currently, Japanese orders are few, because their quality demand is so high that we can hardly meet it."
Fortunately, Japanese buyers have already listed some suggestions which could help Cambodia improve product quality, he said.
"Two directors, rather than one, supervise the operation of every 10 workers. This is the open sesame that they give us," he said.
The United States, as the largest buyer of Cambodian garment products, may need 2 to 3 years to cope with its economic recession, so it has become ever more urgent for Cambodian garment producers to find new markets, he added.
The garment factories of Cambodia used to employ some 300,000 people and have been the largest foreign currency contributor for the kingdom.
Garment, as a labor-intensive industry, is well-rooted in Asian countries, which still encompasses China, Vietnam and Indonesia.
5 comments:
While looking for new demand from other markets the government should also think of how to help all the existing garment factories to survive this hardship.
Not to ask them to under pay or retrench the workers but to help them in reducing all the unnecessary spends i.e. red-tape, bribery, utility, space rental.....
Helping all these to sustain would be cheaper than loosing hundreds of thousands jobs for all those workers.
Forget about focusing too much on garments which is a SUNSET industry. The government has serious lack of focus to re-engineer the long abandoned agriculture policies. Any brain out there among those so-called "think tank" institutions like hopeless SNEC, OBSESS, CDC, etc... on such real visionary and strategic agriculture direction???
I think the workers need to go on strike to demand more moneys and less working hours.
I support the khmer innocent which had stated "Not to ask them to under pay or retrench the workers but to help them in reducing all the unnecessary spends i.e. red-tape, bribery, utility, space rental....."
Garment Factories play the important role in the Cambodian Economy, they provide many employment opportunities to the rural area, they sustain the balance of economy, they are the main force of our national economy.
Because of that, we can't let them be emerge themselve,perish themselve in this circumstance.
Our government should take some actions to help the garment factory out of this crisis, to cut down or eliminate all unneccessary expense, to give grain to each factory or request the grain from other developed countries, such as japan, China,so on. Build up the inspection group to use this grain properly, against any corruption with this grain.
PUC college student
Maybe they have a chance if they can maintain good quality production.
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