Logo of Phnom Penh Post newspaper Phnom Penh Post - Swifter footwear sales help push garment growth

Swifter footwear sales help push garment growth

A truck leaves a footwear factory in Kampong Cham province in 2014.
A truck leaves a footwear factory in Kampong Cham province in 2014. Vireak Mai

Swifter footwear sales help push garment growth

Cambodia's garment sector – a key driver of the economy – exhibited modest growth last year, with total exports topping $6.3 billion in 2015, up from $5.8 billion one year earlier, according to an industry report released yesterday.

In its third bulletin on the Kingdom’s garment sector, the International Labour Organisation (ILO) said the footwear segment far outpaced the sector’s modest 6.5 per cent export growth last year, with footwear exports increasing by 21.8 per cent to $538 million in 2015.

The report also showed a slowdown in new factory openings, with just 75 new garment factories opening in 2015, and two closing shop, compared to a net 98 new factories in 2014.

Matthew Cowgill, chief technical adviser for the ILO’s regional office for Asia and the Pacific, said the drop in new factory openings could be attributed to the government’s push to diversify investment flows to other sectors of the economy.

“There are signs that this investment is increasingly diversified, with investment flowing to sectors beyond the garment and footwear sector,” he said. “I would note that the net increase of 73 garment and footwear factories over the year remains quite strong.”

The report cites figures from the Cambodian Investment Board, which reported that of the 124 new approved investments, 72 were in the garment and footwear sector, reflecting a 17 per cent drop in terms of value.

Despite an increase in exports, Cambodian garment exporters saw a continuing decline in the prices paid by buyers, especially in the US and Japanese markets, the report said.

Cowgill added that the ILO had not studied the causes for these drops in price to “conclusively state the reasons for price trends in various markets”.

“Many factors on both the demand and supply side of the garment and footwear market can affect prices,” he explained.

Ken Loo, spokesman for industry body Garment Manufacturers Association in Cambodia (GMAC), said that a decline in prices paid by buyers has been going on for 30 years and was not a new trend.

“The main reason for the loss is the increase in labour costs with little or no increase in productivity,” he said.

On the issue of new garment factory openings, Loo said he was unsure of the ILO’s source, but that GMAC had seen an equal number of closures and new factories last year – 85 members in total – but that was including both the garment and footwear sectors, as well as their subcontractors.

This quarter’s report also contained a review on the tripartite minimum wage determination process used in the Kingdom, which Cowgill said was more an “explanation of the process, rather than a judgment about whether the minimum wage is set at the ideal level”.

“The ILO does not take a view about the appropriateness of the level of the minimum wage,” he added.

MOST VIEWED

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Preah Vihear court drops charges against villagers

    The Preah Vihear Provincial Court has dropped all charges against eight ethnic Kuoy villagers who were in a land dispute with the Hengfu Group Sugar Industry Co Ltd since 2014. Wednesday’s decision was made by the judge who tried the case on June 10. The eight

  • Gov’t to boost Siem Reap tourism

    The Ministry of Tourism released the results of an inter-ministerial committee meeting concerning Siem Reap province’s Tourism Development Master Plan for 2020-2035 on Wednesday, revealing the government’s plan to improve the overall tourist landscape there. The meeting was attended by Minister of Tourism

  • Residents ordered to remove structures on Phnom Penh’s canal

    Phnom Penh municipal governor Khuong Sreng has ordered authorities to act against the perpetrators who built houses along the Luo 5 canal in Meanchey district. The municipal administration plans to create a committee to solve the matter. The order was given on Wednesday while Sreng led

  • ‘On the offensive’: Cambodia to load up on loans to stimulate economy

    As the dust settles on the economy, Cambodia comes to grips with what needs to be done to turn the economy around, starting with a big shopping list for credit ‘We are going on the offensive,” Vongsey Vissoth, Ministry of Economy and Finance permanent secretary

  • Eighty replacement peacekeepers set for Mali mission despite Covid

    Eighty Cambodian blue helmet soldiers who completed the peacekeeping mission under the UN umbrella in Mali will return to Cambodia on Friday, said the Centre for Peacekeeping Forces spokeswoman Kosal Malida. “To protect their families and communities from the Covid-19 pandemic, the 80 are required to

  • Government set to make up for cancelled April holiday

    The government is set to make up for a five-day Khmer New Year holiday late this month or early next month. The holiday was earlier cancelled due to the onset of Covid-19. The announcement is expected on Friday as the government is studying a range

  • Families told to register for cash handouts

    The government has called on poor families to apply to commune authorities for evaluation to receive financial support during the Covid-19 crisis. A $300 million budget has been planned for implementation within a year. Ministry of Economy and Finance secretary of state Vongsey Visoth said this