A recent string of disasters rocking Bangladesh’s garment industry has highlighted its factories’ shocking safety record, and stoked optimism that giant fashion brands will flock to move their orders to countries like Cambodia.
But Cambodia’s garment industry has not experienced any major deluge of business so far, industry insiders said, and some even believe this may remain so for the long term, as Bangladesh tries to refurbish it image.
“So far, there have been no positive effects on Cambodia,” said the Garment Manufacturers Association in Cambodia’s (GMAC) chairman, Van Sou Ieng. “There is just an increase in short-term orders to replace the non-delivery from Bangladesh [due to the recent disasters], but our factories have no capacity to take these up.”
Fashion labels usually place orders with factories three to four months before production begins, said GMAC’s secretary-general Ken Loo. Most factories here would have “committed the capacity to their buyers a long time ago”. It is also “too early to tell” how Cambodia will be affected, he added.
Bangladesh faced its worst-ever industrial disaster last month, when the collapse of Rana Plaza, which houses five garment factories that churned out clothing for major Western retailers, killed more than 1,100 people. Soon after, a fire in another garment factory building killed eight people.
Previously, retailers like Walt Disney concerned about Bangladesh’s safety standards have backed away from the country, the world’s second-largest exporter of garment.
With this latest garment crisis, expectations were raised that others would follow suit. But, for some retailers, it is “operationally very difficult to pull out of Bangladesh,” said David Welsh, Cambodia’s country director for the American Center for International Labor Solidarity.
For example, PVH, the parent company of Tommy Hilfiger, has 38 per cent of its manufacturing operations in Bangladesh. “It is not like they can decide to pull out tomorrow,” he said.
Retailers will only begin relocating their manufacturing en masse if Bangladesh’s situation does not improve, he added.
Similarly, Van believes Bangladesh’s crisis may not have any long-term effect on Cambodia. Bangladesh has lower production costs and “any fashion label will continue to buy from it despite all the problems.”