PHNOM PENH – Cambodia’s heavily export-orientated garment industry continues to show signs of upturn despite ongoing challenges around social compliance in its labour force. In the first nine months of 2017, garment and footwear exports from Cambodia fetched more than US$5 billion in revenues according to data from the country’s ministry of commerce. Apparel exports were valued at US$4.9 billion, while footwear exports earned US$636 million during January-September 2017.
Fushun Cambo Fashion Company Limited has become the latest company to invest in the sector after been given the green light to invest US$2.45 million to set up a garment manufacturing factory in Bante Kol village in the southwestern Bati district of Takeo province in Cambodia. The project, which once complete will employ more than 1,000 people, has been approved by the Council for the Development of Cambodia (CDC). In October 2017, the CDC also approved four separate garment and footwear projects with a combined investment capital of nearly US$10 million, offering further evidence of the current buoyant state of the local sector.
While Cambodia has seen a sizeable surge in minimum wages during the past few years, the country continues to enjoy trading advantages via the Generalised System of Preferences (GSP) and Most Favoured Nation (MFN) status. Both GSP and MFN give duty-free access and/or lower tariffs for Cambodian goods.
The European Union is biggest market for Cambodian products, followed by the US and Japan.
Cambodia’s garment factories are generally based on cut-make-trim (CMT) model, whereby raw material, machinery and the design of the garments are imported from abroad, and the assembly of the product is outsourced to the labour-intensive factories in Cambodia and Myanmar.
The industry is dominated by foreign owned firms, mainly from the neighbouring countries such as China, Hong Kong, Singapore, Malaysia and Republic of Korea.
