As Cambodia continues reaping the benefits of a production shift out of China amid the Sino-US trade war and Covid-19, Taiwan’s TST Group Holding Ltd based in Hong Kong has announced it will expand into the Kingdom with a planned investment of $20 million.
Japanese news agency NNA reported on Wednesday that TST was making the move due to Covid-19 disrupting production in China.
“We always planned to diversify and increase overseas businesses, and the Covid-19 epidemic pushed us to accelerate our efforts,” a TST spokeswoman told NNA.
TST says the move is in response to demand from clients and it will draw up a detailed investment plan in the second half of this year.
Apparel production is scheduled to be launched in the second half of 2021, president Jeff Lin was quoted by Taiwan’s Central New Agency as saying.
The company, which supplies fabrics for brands such as Adidas, Puma and Gap, plans to establish a joint venture with a Singapore-registered local partner, and hold a 51 per cent stake in it, a TST spokeswoman told NNA.
It expects Cambodian apparel production to generate fresh monthly revenues of $9.9 million through new clients, she said.
Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika said as manufacturers turn to the Kingdom, exports to the US will rise.
“We estimate that Cambodian exports to the US will increase by the end of the year because of the US’ General System of Preferences, Covid-19, and the Sino-US trade war situations.
“The US will import a large amount of clothes and travel goods from Cambodia this year. China also will import from the Kingdom,” he said.
A National Bank of Cambodia (NBC) report said the US is the biggest market for Cambodia, accounting for 29.6 per cent of the Kingdom’s total exports last year.
The NBC figures revealed that the Kingdom exported $14.63 billion worth of goods last year while it imported some $22.34 billion.