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Factories rise, but orders slow

Factories rise, but orders slow

SOME 20 garment factories opened in the first nine months of year, but orders have slumped following recent labour strikes, according to Garment Manufacturers Association of Cambodia Secretary General Ken Loo yesterday.

Buyers had been returning to order from the Kingdom, he said, but some were “scared” to contract Cambodian factories following the series of strikes that began in September.

The 20 new factories likely employed between 300 and 500 workers each, though employment was likely to increase as production there rose, he said.

Strikes are just one barrier among many, such as labour costs, electricity, transportation costs.

A small number of factories had also shut during the January-to-September period.
No new factories had opened during October, as potential investors were waiting to see the longer term situation following the labour strike, he said.

The labour strikes have been organised to protest a July decision by government and industry representatives to set the minimum wage for garment workers at US$61 per month. Protest leaders were demanding $93 per month.

Ken Loo said the industry had generally been improving in line with the world economy so far this year.

Ministry of Labour and Vocational Training Secretary of State Om Mean said the domestic garment industry had generally been improving during the year to date.

“Things are returning to normal,” he said. “Many factories have opened employing thousands of workers –though some have also closed.”
Om Mean downplayed the challenges caused by the recent labour unrest.

“Strikes are just one barrier among many, such as labour costs, electricity, transportations costs,” he said. “Strikes are manageable – they are not something that cannot be controlled or solved.”

Strikes within the rules were acceptable under Cambodian law, but ones that contravened the law could cause delayed production and late deliveries, he said.

Om Mean said he expected Cambodia’s garment and textile industry would get even better this year along with global economic improvement.

Nam-Shik Kang, managing director at Injae garment factory, said his plant had expanded production capacity by 50 percent this year and employed some 650 new workers.

Demand from the US was the prime driver of the factory’s increased production after launching last year, he said.

However, American garment buyers are keeping watch on the Cambodian labour situation, as the buyers are worried about potential non-deliveries caused by strikes, he added.

Garment and textile exports rose over 16 percent year on year to $2.27 billion in the first nine months of 2010, from $1.94 billion last year.

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