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Kingdom pulls factories

Kingdom pulls factories

As much of the world grapples with the Covid-19 pandemic with global trade and economies paralysed, 77 new factories have launched operations in the Kingdom, while only six have shut down.

And in the first quarter of this year, the total number of factories registering with the Ministry of Industry, Science, Technology and Innovation has reached 1,801, a senior ministry official said.

Speaking at a news briefing in Phnom Penh on Thursday, the ministry’s secretary of state Heng Sokkong attributed the growth to the government’s “attractively open policies” and sufficient supply of raw materials.

He said while the six factories’ closure had put 6,052 workers out of jobs, the new factories are expected to create 27,909 new ones.

As of late March, he said, there were a total of 1,801 factories operating throughout the Kingdom. They accounted for 1,063,031 jobs.

“The growth brings about national pride as the rest of the world is struggling with Covid-19,” Sokkong said.

However, he said the number did not include factories that had filed for suspension of their operations due to the covid-19 pandemic.

Sokkong pointed out that Cambodia had not faced a serious shortage of raw material supplies from other counties.

“This is a golden opportunity for Cambodia. After the Covid-19 ends, there will be more orders [of garments] from Cambodia,” he said.

Garment Manufacturers Association in Cambodia (GMAC) secretary-general Ken Loo said his association registered five new members in the first quarter of this year.

“At the same time, some of our factory members have also shut down,” he said, without providing exact figures.

While garments represent the main export from Cambodia, Sokkong said the government is pushing for diversification in the sector.

Meanwhile, he said Cambodia is making efforts to expand its production line in order to create new jobs for people by avoiding exporting raw materials abroad.

“We are diversifying from maximum workforces-reliant industry to skilled workforce-reliant industries. We are urging manufacturers in Cambodia to turn themselves into smart factories,” he said.

According to the World Bank’s projection, Cambodia’s economic growth will slow significantly to 2.5 per cent this year but is likely to recover to 5.9 per cent in 2021 under the baseline scenario.

The Kingdom’s tourism sector has been hit hardest by the Covid-19 outbreak, while the garment industry is facing a significant drop in global demand due to the pandemic and the partial withdrawal of the EU’s Everything But Arms (EBA) scheme.

According to the ministry’s report, in the first quarter of last year, there were 1,099 factories producing mainly textiles, garments, wallets and shoes and 163 factories producing food, beverages and cigarettes.

There were also 36 factories involved in wood processing, 63 in paper and cloth printing, 145 in chemical, rubber and plastics production, 58 in mine extraction, 163 in steel processing, 20 in furniture manufacturing, one in electrical items and gas, and 53 in miscellaneous manufacturing.

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