Logo of Phnom Penh Post newspaper Phnom Penh Post - More capital for factories

More capital for factories

More capital for factories

biz factories
Workers protest outside the H&L Apparel (Cambodia) Co factory in Phnom Penh’s Por Sen Chey district in 2012. Photograph: Pha Lina/Phnom Penh Post

Workers protest outside the H&L Apparel (Cambodia) Co factory in Phnom Penh’s Por Sen Chey district in 2012. Photograph: Pha Lina/Phnom Penh Post

The government approved 103 factories with a combined investment of $660 million last year — a big increase from the previous year’s 52 factories valued at $230 million, according to data from the Council for the Development of Cambodia.

Industry representatives and economists said the sharp rise was a result of minimum wage increases in some other countries in the region.

Companies were relocating manufacturing to Cambodia, with its low labour costs and export incentives, they said.

According to Council for the Development of Cambodia data, 82 garment factories with a capital investment of $499 million were approved, as were 13 shoe factories with $116 million investment, two sock factories supported with $25 million, four textile manufacturers with $9 million and two glove factories with $10 million invested.

In 2011, investments in 45 garment factories were worth $205 million, and $25 million was invested in seven shoe factories.

Ken Loo, secretary-general of the Garment Manufacturers Association of Cambodia (GMAC), said higher minimum wages in other countries would force manufacturers to move to the Kingdom.

“We got [most of the companies] from China because it increased the minimum wage. [Factories] move here because we have low labour costs and more market access — these are the main things,” Loo said.

But he predicted there were many more factory owners wanting to enter the country.

“If we didn’t have so many strikes, the number would be much higher,” he said.
Hiroshi Suzuki, head of the Business Research Institute for Cambodia, agreed.

“The drastic increase of labour costs in neighbouring countries such as China, Thailand and Vietnam is to the advantage of Cambodia, where labour costs have also seen a slight increase. The investment in labour-intensive industry in Cambodia will continue to increase,” he said.

Cambodia’s garment workers, and some unions, have demanded an increase in the minimum wage from the present $61 a month. Many meetings between GMAC, unions and government officials have failed to reach a consensus.   

On March 11, unions and GMAC failed to reach agreement on a minimum wage.

Unions are demanding the minimum wage be increased from $61 to $100.

Cambodia Federation of Unions president Rong Chhun said the recent demands by garment workers would not affect the industry.

“I don’t think the workers’ demands are affecting investors. They consider the high unofficial expenses, not workers’ demands,” Chhun said.

He said that, for a factory with 4,000 workers, manufacturers had “unofficial expenses” of around $80,000 a month to pay to officials.

Chhun said he would try to reach a deal on the $100 minimum wage this month.

“I hope that everything will be finished by this month. If not, we will have a big strike,” he said.

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At

  • Chinese firms unveil preliminary results on metro, monorail for capital

    Minister of Public Works and Transport Sun Chanthol and representatives from China Road and Bridge Corp (CRBC) and its parent company, the state-owned China Communications Construction Co Ltd (CCCC), met on June 24 for talks on results of the firms’ preliminary study on a potential metro