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Kingdom’s factory registrations on the rise in 2017

A worker operates machinery at a precast plant in Phnom Penh’s Russey Keo district in 2015.
A worker operates machinery at a precast plant in Phnom Penh’s Russey Keo district in 2015. Hong Menea

Kingdom’s factory registrations on the rise in 2017

More than 115 new factories were registered during the first nine months of the year, an increase of 7.5 percent compared to the same period last year, creating over 50,000 jobs, according to data from the Ministry of Industry and Handicraft.

The garment sector saw the greatest increase in capacity, with 63 new factories being created, though it saw six shutter operations. An additional 16 processed metal factories and 15 rubber- and plastic-processing plants were created as well. As of the end of September, total factories in Cambodia numbered at 1,692, providing a total of 972,900 jobs.

According to Hort Pheng, director of the Industrial Affairs Department at the Ministry of Industry and Handicrafts, the increasing number of factories in Cambodia is representative of a stable political environment which has assured investors of the safety of their investments.

“Because our politics are stable, we offer investors a secure and safe environment,” he said, although he declined to address the political uncertainties that have plagued Cambodia for the past several months. “If businessmen did not profit from entering the Cambodian market, the numbers of factories would not continue to grow.”

Kaing Monika, secretary-general of Garment Manufacturers Association in Cambodia (GMAC), said that while GMAC membership had not greatly increased, the value of exports had grown at a significant rate of about 7 percent since last year.

“We have noticed that the industry has grown since we have provided better investment incentives and have increased our administrative capabilities,” he said. “But now the industry is seeing some challenges, since the minimum salaries for garment workers have increased.”

“Labour productivity and production efficiency must increase as well now,” he said.

Ngoun Meng Tech, director-general of the Cambodia Chamber of Commerce, said that recent growth in the number of factories is a result of positive investment decisions.

“The growth in factory development is reflective of actions the government has taken in the past, and is not reflective of any new government policies,” he said. “The garment sector is still Cambodia’s leading industry because there is a chance of making a profit here, and it is quick and easy to establish a factory.”

“However,” Meng Tech added, “it is also fast and easy to give up production as well, if investors see a reason to leave Cambodia.”

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