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

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa

  • Kampot tourism quay ‘90% done’

    Construction on Kampot International Tourism Port – a 4ha quay in Teuk Chhou district about 6km west of Kampot town – has fallen off track, reaching 90 per cent completion, according to a senior Ministry of Tourism official last week. The project is now planned to be finished

  • Demining rat ‘hero’ Magawa dead at 8

    A landmine-hunting rat that was awarded a gold medal for heroism for clearing ordnance from the Cambodian countryside has died, his charity said on January 11. Magawa, a giant African pouched rat originally from Tanzania, helped clear mines from about 225,000sqm of land – the equivalent of 42