The number of companies registering to become members of the Garment Manufacturing Association in Cambodia (GMAC) doubled last year, with more investment in value-added products.
GMAC said the number of new members reached 120 last year, compared with 60 newcomers in 2011.
GMAC operations manager Ly Tek Heng told the Post low labour costs, access to key markets and duty-free exports were driving growth in Cambodia’s garment sector, but illegal strikes and a shortage of skilled workers were challenging the industry.
“Most of the newcomers are from China, Taiwan and Hong Kong, where wages have been rising,” Heng said. “More of them are tending to focus on higher-value-added products that require more expertise.”
On average, each new company invested about US$1.5 million, which amounts to about $180 million spread among the 120 newcomers.
GMAC now counts 470 garment and footwear factories as members. They employ about 450,000 workers, 80 per cent of whom are women.
Hiroshi Suzuki, chief economist at the Business Research Institute for Cambodia, told the Post earlier this month many companies, especially in labour-intensive indust-ries, were looking for good investment candidates, and Cambodia was on their list.
“Labour-intensive industries in China would like to relocate to good candidate countries because of the drastic increase in wages in China compared with those in other countries, including Cambodia.”
From this month, every Thai worker will be entitled to a 300 baht ($10) daily minimum wage. Monthly wages in Vietnam have risen to as much as 2.4 million dong ($113).
The minimum wage for a Cambodian worker in a garment factory is $61 a month. Although more incentives are being provided to workers, the minimum wage, plus incentives, brings the workers’ minimum income to $83 a month.
Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, said an increase in members proved Cambodia’s attractiveness as a low-cost labour location was outweighing fears of worker unrest.
He said although the number of strikes had increased from 39 in 2011 to 61 last year, this had not seriously affected the country’s image, as workers protested only to earn a better salary and better living conditions.
“Genuine investors who truly respect the rights of workers will not be afraid to put money into Cambodia,” Thorn said.
Heng said more and more Cambodian workers could work as team supervisors, which was a sign of the industry’s development, but many still lacked the understanding to seize job opportunities for a better salary.
“Until now, we have not had Cambodian workers who are experts in fashion design or pattern-making,” he said.