Eclat Textile Co has a plant in Cambodia which manufactures sportswear and knitted garments. FACEBOOK
Taiwan-based Eclat Textile Co, a sportswear supplier to Nike Inc and Lululemon Athletica Inc, is slated to invest in more facilities in Southeast Asia, as the company plans to “move beyond Vietnam” amid the global trade war, according to the firm’s chairman and CEO Hung Cheng-hai.
The company expects to invest $80 million in 120 production lines in the region.
In an interview with Bloomberg News, Hung said that judging from the global situation, the most important thing now is diversification.
“Clients also want us to diversify risks and don’t want production bases to be in one country. Now 50 per cent of our garments are made in Vietnam, so we are not diversified enough,” said Hung.
Centre for Policy Studies director Chan Sophal told The Post on Tuesday that Eclat plans to expand to Cambodia because it has good geography, lower wages and respect for labour rights.
“Cambodia has some positive points – we have good labour practices which are monitored by the International Labour Organisation’s Better Factories Cambodia project. We have political and economic stability,” said Sophal.
When asked if removal of the EU’s Everything But Arms (EBA) agreement would be a concern, Sophal said it would not be a concern for big companies like Eclat.
“For EBA, I would like to say that big companies not only export to the EU market, they also export to the US,” he said.
Eclat left China in 2016 as conditions weren’t ideal for manufacturing, opting instead for Vietnam. As Sino-US trade tensions continue to rise, Eclat again finds itself at risk and must migrate from Vietnam, said Hung.
The company is planning to set up multiple, smaller regional manufacturing hubs and will not consider adding plants or expanding in Vietnam in the next three years, Hung told Bloomberg.
Eclat currently has a plant in Cambodia which manufactures sportswear and knitted garments.
The company’s board will decide specific locations later this year, said Hung.
US President Donald Trump last month criticised Vietnam for benefiting from the trade war, calling it “the single worst abuser of everybody” on trade and then slapping higher import duties on steel.
The Cambodia Development Council (CDC) has approved 102 investment projects during the first six months of this year. None of the companies has confirmed whether or not they moved from China.
CDC secretary-general Sok Chenda Sophea earlier this month said the Kingdom is wide open to all investors, not only Chinese nationals.
