The Cambodian government has approved 53 new garment and footwear factories, worth an estimated US$338 million, during the first half of this year, compared with 38 last year valued at $180 million, despite the increase in the number of strikes affecting the industry.
Officials and industry representatives said the increase was mainly a result of rising wages in China, as well as Cambodia’s preferential tax status in foreign markets. They said the strikes have been a concern at some points but were not defining in how the industry was developing.
Official data from the Council for the Development of Cambodia (CDC) showed the total number new factories consisted of 40 garment factories worth $239 million; two glove factories worth more than $10 million; eight shoe factories worth $60.5 million; two sock factories worth $$25 million; and one textile plant worth $2.58 million.
Kong Putheara, a spokesperson for the Ministry of Commerce told the Post yesterday that Cambodia’s garment, footwear and textile industry has enjoyed a preferential tax status in many countries around the world, including the European Union, the United States and Canada.
“We have a lot of markets for them [factory owners] to export to, and our labour costs are still low – why shouldn’t they come?” he said.
Ken Loo, secretary-general of the Garment Manufacturers’ Association of Cambodia (GMAC), pointed to rising labour costs in China as the main reason behind the growth in new factories in the Kingdom.
“We have more investors from China because the factories owners cannot find enough workers for their factories, as they face rising of labour costs and worker shortages. So they are moving from China to other countries. Cambodia is just one country they are looking at,” he said.
“As a result, we have around 50 new factories as the members of GMAC.”
Loo said the new factories were from countries including China, Taiwan and South Korea.
To contact the reporter on this story: May Kunmakara at [email protected]