Logo of Phnom Penh Post newspaper Phnom Penh Post - Phnom Penh garment factory plans to close

Phnom Penh garment factory plans to close

Union rep Soth Chet addresses protesting workers outside Phnom Penh's Global Apparels Limited garment factory in February. Photo supplied
Union rep Soth Chet addresses protesting workers outside Phnom Penh's Global Apparels Limited garment factory in February. Photo supplied

Phnom Penh garment factory plans to close

Malaysian-owned Global Apparels Limited, a garment factory in Phnom Penh, announced that the factory would close by October of this year, a company staff member confirmed yesterday.

This followed a formal announcement issued on May 30 that cited a lack of orders – causing the company to operate at a loss – was the primary reason for the closure.

The staff member, who declined to be named as he is not allowed to speak to the press, said the factory had faced losses for the last 12 months and that orders had dried up.

“If [the company] continued to operate, [it would] have no ability to pay for the worker’s wages. So the company decided to close the factory,” he said.

Another reason, according to him, was that the factory was facing tense regional competition that had higher levels of productivity at lower costs.

“The competition is very fierce, especially the competition with Vietnam and Bangladesh,” he said. “Regarding the productivity, if we compare our productivity to other countries, we are lower than them.”

According to the announcement, if the factory continued to operate past October, it lacked the financial resources to pay the worker’s short-term and long-term contracts.

However, Suth Cheth, an official from Collective Union of Movement of Workers, said he did not fully believe the company’s claims.

He said that many companies that close down do so to avoid fulfilling back pay and tax obligations, and simply move to new locations.

“The company might have a new name or want to change its location. Although that is not the easy way,” he said.

The staff worker said that the company was trying to work with the trade unions to find a solution to wages and seniority pay.

According to him, the factory currently employs around 2,000 workers and primarily exports to US, Europe and Japan.

MOST VIEWED

  • Mysterious century-old structure found at bottom of Angkor pond

    The Apsara National Authority (ANA) has discovered a mysterious 1,000-year-old structure of a wooden building at the bottom of a pond after the Angkor Wat temple’s conservation team completed restoring its northern cave. The deputy director at ANA’s Angkor International Research and Documentation

  • Cellcard announces Cambodia’s first use of 5G to help Kingdom during Covid-19

    Cellcard on Friday announced Cambodia’s first use of 5G for a telemedicine service at four locations across Phnom Penh to help the Kingdom’s most critically ill during the Covid-19 outbreak. Cellcard, which is the only 100 per cent Cambodian-owned and "Proudly Khmer" mobile network

  • Former CNRP activist nabbed for offering online English classes

    Authorities detained a high school teacher in Kampong Chhnang province on Thursday after he was caught conducting online classes despite the fact that schools had been ordered to close temporarily to prevent Covid-19 infections. Keo Thai teaches at Boribo High School in Kampong Chhnang and

  • Health ministry warns against using virus-testing machines

    The Ministry of Health has threatened legal action against anyone who publicised their test results after using COVID-19 rapid testing machines. The ministry said such machines were not even approved or recognised for use by the World Health Organisation (WHO). It said test the results

  • National Assembly approves two coal-fired power plants

    The National Assembly (NA) unanimously approved draft laws paving the way for the construction of two coal-fired power plants worth $1.665 billion to supply 100 per cent of electricity required in the Kingdom by 2025. An NA member said at the session that the plants will be located

  • The good and bad of credit growth

    In the last 10 years, the property and construction sectors have propelled Cambodia’s economy. But rising borrowings threaten to dampen its future unless something is done soon They say all good things must come to an end, perhaps not “the” end. A slowdown in real