Britain garment manufacturer moves operations to Cambodia

PHNOM PENH, May 11 (Xinhua) -- A major garment manufacturer will move its product development center from the United Kingdom to Cambodia, a sign, according to some experts, that despite the effects of the economic crisis, the Cambodian garment sector continues to remain internationally competitive, local media reported on Monday.

Britain company New Island Clothing is setting up "a high level standards product development center," making the company one of the first to conduct the whole garment-production process -- from development to the placement of orders -- in Cambodia, New Island General Manager Kevin Plenty was quoted by the Cambodia Daily as saying.

The company, which has been in Cambodia for nine years and produces up to 75,000 men's shirts per week, had decided to set up the center here because it makes "the whole production process quicker for our customers," as the majority of materials come from the ASEAN region, said Plenty.

Kaing Monika, external affairs manager of the Garment Manufacturers Association in Cambodia (GMAC) said New Island's strategy showed the factory's "long-term vision and commitment in Cambodia," adding that most Cambodian factories only do "cut, make and trim" -- a production formula in which raw materials and designs are supplied and factories only really stitch the clothes together.

Tuomo Poutiainen, chief technical adviser for the International Labor Organization's garment sector program Better Factories Cambodia, said New Island's decision was "very positive for industry" and showed there was "enough confidence in the Cambodian garment sector to invest even in bad times."

Hundreds of factories have constituted the backbone of the garment sector of Cambodia, which used to generate above 70 percent of its total annual export volumes.

However, due to the global financial crisis and rising labor disputes, at least 60 garment factories have been closed and more than 50,000 garment workers lost their jobs since late 2008 and the sector's export volumes have also seen an obvious slide in the first quarter of this year.

But Plenty said he believed that the industry will see an economic turnaround within six months, and that he is not the only one within the garment industry to feel that way.

Cambodia : Garment sector competes & thrives

August 6, 2007
World Bank

Wearing a dark-blue uniform, with red trim, and standing next to a huge ironing machine in a garment factory in Phnom Penh, 20-years-old, Son Sean, smiles and responds: “My family has better living conditions now,” she pauses and continues while pushing a collar into the machine, “From my earnings, my mother has been able to build a 5 by 7 meter brick house with a tiled roof, and my 15 year-old sister has been able to continue her schooling.”

Son Sean is one of many garment workers who come from the poor Cambodian province of Svay Rieng, located about 120 km east of Phnom Penh. She earns on average about US$70 per month, depending on how much overtime she gets, and each month, Sean sends US$50 to US$90 cash home to support her 50-year old widowed mother and her younger sister, who studies in the fifth grade.

Sean’s co-worker, Vong Pak, 39, smiles proudly when asked whether she supports members of her family with her earnings. “From my salary I support my 68-year-old mother, my four children and I pay for my children’s schooling,” she says while sewing a shirt. Pak is the breadwinner of the family. Three of her four children, who are 14, 12, 7, and 3 years old, are in school now.

Both Sean and Pak work at the New Island Clothing garment factory (NIC), along with more than 800 other workers. NIC is one of 290 garment factories in Cambodia which exports goods to the United States and Europe. NIC operates in six countries: Cambodia, Indonesia, Sri Lanka, Vietnam, Lithuania and Mauritius.

The company produces men's and ladies’ formal and casual shirts, supplying these to Marks & Spencers, as well as to premium overseas customers. New Island is a winner of Cambodia’s First Corporate Citizenship Awards which were sponsored by the World Bank Group’s private sector financing arm, the International Finance Corporation (IFC) in 2005.

Cambodia’s garment industry is the country’s main industry and its leading export revenue earner. In 2006, exports totaled US$2.5 billion and the sector employed 330,000 mostly poorer rural women, who in turn support extended families. In total, an estimated 1.7 million people depend on the garment industry directly or indirectly.

According to the report Export Diversification and Value Addition for Human Development which was published by the Economic Institute of Cambodia in June 2007, garment industry workers earn an average of US$73 per month, 29 percent of which comes from overtime work.

Representing almost 80 percent of Cambodia’s total exports, the sector is crucial to Cambodia’s economy. However, increasing global competition makes the industry vulnerable, and so a variety of approaches are needed to help the industry sustain itself.