Logo of Phnom Penh Post newspaper Phnom Penh Post - Orders sliding in ’14: GMAC

Orders sliding in ’14: GMAC

A garment worker performs quality control checks on a jacket at a factory in Phnom Penh
A garment worker performs quality control checks on a jacket at a factory in Phnom Penh’s Por Sen Chey district earlier this year. Vireak Mai

Orders sliding in ’14: GMAC

Continued instability in the garment sector has led the Garment Manufacturers Association in Cambodia (GMAC) to forecast a bleak outlook for the rest of 2014.

According to a sample of survey results supplied to the Post, 50 per cent of GMAC’s 247 members said they did not have enough orders to fill production for the remainder of the year. About 160 factories said orders had been reduced on average by 40 per cent, and 26 per cent said they had been forced to close lines or partially suspend operations due to a lack of orders.

“Buyers don’t have confidence in stability here, in the factories’ ability to deliver the goods, because we are under the constant threat of strikes, regardless of whether the unions, or those that threaten to strike, even have the ability or the power to deliver on their threats,” GMAC secretary-general Ken Loo said on Monday.

The main buyers that have reduced orders are Wal-Mart, H&M, Levi Strauss and Adidas in addition to a number of smaller buyers, factories said.

Contacted yesterday, neither Wal-Mart, H&M nor Levi Strauss would comment directly on the status of their orders in Cambodia, but all called for stability in the industry and respect for workers’ rights.

“Predictability of supply and its converse, disruption of production, is a concern to Levi Strauss & Co. and any brand sourcing from Cambodia,” a spokesperson from Levi Strauss said via email.

“For Levi Strauss & Co., repression of worker and human rights in Cambodia is also a very serious concern.”

The GMAC survey comes as debate over the industry’s minimum wage is heating up.

On Monday, eight union leaders held a press conference threatening nationwide strikes if minimum wage discussions went down a similar path to talks last year, when they believe their demands were not seriously considered.

On December 25, a 10-day strike over the minimum wage led to the death of at least five demonstrators after security forces opened fire with live rounds on January 3.

Unions at Monday’s conference are calling for the current $100 minimum wage to be raised to $177 a month.

Loo denied the timing of the GMAC data had anything to do with Monday’s union announcement. He said he was sharing this information with unions, the government and the Labour Advisory Committee to demonstrate buyers’ reaction to industry turmoil and to support his members’ position that a $110 minimum wage rise was the maximum the sector could afford.

“Anything above this means that places will not be able to afford it and will have to close, so the higher the minimum wage the more difficult it will be for factories to continue operating in Cambodia,”
Loo said.

Dave Welsh, country director for labour rights group Solidarity Center, said yesterday he could not verify the GMAC data but that there was no doubt that orders had dropped in the second half of the year after January’s protests.

“There is a decline, but our point is that the decline is not linked to minimum wage discussions – the decline is linked to buyers’ increasing frustration over so many unresolved issues from the events in January,” he said, referring to uninvestigated deaths of protesters and current charges against union leaders.

“Further industrial unrest on the scale that we saw last year could really be devastating for the industry, but that has nothing to do with the economics of the wage demand,” he added.

MOST VIEWED

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group