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Logo of Phnom Penh Post newspaper Phnom Penh Post - Three garment factory shutdowns this year

Three garment factory shutdowns this year

THREE more garment factories closed in 2010 after their owners filed for bankruptcy, the president of the Free Trade Union of Workers of the Kingdom of Cambodia said Tuesday.

More than 3,000 workers lost their jobs after the factories, which were all located in Phnom Penh and owned by Korean and Taiwanese investors, shut their doors in mid-February, Free Trade Union (FTU) president Chea Mony told the Post.

He said that since 2006, more than 70,000 workers had lost their jobs, adding: “Most of the former workers have taken up new jobs at night clubs or karaoke parlors or have gone to work abroad.”

Cheat Khemara, coordinator of a garment manufacturer association, said that the sector is at a standstill after having been shaken by the economic crisis.

He believes that the recent closures resulted from bankruptcy.

“They [the owners] signed a six-month contract. During this period, they faced a lot of difficulties because there were no orders, they had to spend too much on productivity and workers were de-motivated by their low salaries,” he said.

Most owners whose factories closed have gone to invest in Vietnam and Bangladesh instead, he added.

Despite some signs of a limited recovery in the sector, which according the Asian Development Bank saw US garment imports contract by 16.3 percent last year as consumption cooled, factories continue to close and some believe problems are still evident within the industry.

Ath Thun, president of the Coalition of Cambodian Apparel Workers Democratic Unions, said: “Many are working in the garment sector illegally. Investors employ them because they are willing to accept low payment, which is good for their short-term contracts.

“This results in poor work quality and consequently poor production quality, which leads to the loss of buyers.”

Um Mean, secretary of state of the Ministry of Labor Affairs and Vocational Training, said Tuesday he had not yet received reports about the situation of garment factories in Cambodia.

He stated that 122 factories had closed down and 53,057 workers have lost jobs since the beginning of 2009 to March 2010. A total of 67 factories had been re-opened and absorbed 19,772 workers back into work, he added.

The official said that as the global crisis cooled, the sector was likely to recover.

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