Logo of Phnom Penh Post newspaper Phnom Penh Post - Prime minister says garment sector will survive market crisis

Prime minister says garment sector will survive market crisis

Prime minister says garment sector will survive market crisis

Factories should target low-end market, PM says, but figures suggest

the industry faces a slowdown as demand for exports shrinks 

THE garment sector will not be seriously impacted by the global financial crisis, Prime Minister Hun Sen said Wednesday at a summit of trade leaders from the world's poorest countries held in Siem Reap.

"Expensive clothes are rarely produced in our poor countries, but they are produced in other countries. So we may focus on cheaper garments," Hun Sen said, adding that garments made in Cambodia will continue to sell if they are marketed properly.

"At this point, I think that there has been no serious impact on the garment sector," he added.

The prime minister's comments come despite industry figures that suggest a general sector slowdown and expected lay-offs in coming months.

At least 20,000 workers have been laid off this year, say officials with the Garment Manufacturers Association of Cambodia, adding that 35 factories employing up to 5,000 workers each were facing closure.

GMAC chairman Van Sou Ieng said earlier this week that 30 factories have already been closed this year.

"They closed because there were no purchase orders," he said.

Clothing demand has fallen sharply in the US as economic woes force consumers to cut back on nonessential purchases.

According to the Ministry of Commerce, garment exports plummeted 46 percent in the fourth quarter of 2007, capping off a dismal year.

Export growth for all of 2007 stood at only 2.4 percent, representing US$2.9 billion.

Hun Sen said that Cambodia's export garment market is  worth approximately $3.6 billion a year.

According to data from the US Department of Commerce, Cambodia garment exports to the US, the Kingdom's biggest textile market, totalled $1.8 billion in the first nine months of 2008, slightly down from the same period the previous year.

The sector is Cambodia's largest source of export income, providing 80 percent of its foreign exchange and employing more than 300,000 people.

ADDITIONAL REPORTING BY HOR HAB

MOST VIEWED

  • Kingdom may hire Turkish power ship

    Cambodia is considering negotiating with Turkey to hire a 200MW-capacity power ship to meet electricity demands as the country faces an ongoing electrical shortage, according to the prime minister. Speaking to garment workers in Pursat province on Wednesday, Prime Minister Hun Sen said Electricite du

  • ‘Kingdom lacks up to 400MW in available electricity’

    Prime Minister Hun Sen has called on the general public, hoteliers and businesspeople with generators to use them as back-up as the Electricity Authority of Cambodia cannot generate enough electricity to meet needs due to low water levels in power station reservoirs. On Saturday evening

  • EDC tackles power shortfall

    Electrcite Du Cambodge (EDC) on Monday issued a statement updating the public on its efforts to tackle insufficient electricity supplies during the ongoing dry season. Reductions in electricity prices have resulted in a steady increase in consumers in the Kingdom, while local and international investors

  • Woman who scaled Cambodia’s three highest peaks eyes Everest

    One of the very few Cambodian women to have successfully reached the Kingdom’s three highest peaks is now eyeing Malaysia’s tallest mountain, Mount Kinabalu, and potentially even the world’s tallest straddling Nepal and China, Mount Everest. While in many Western countries it