With the global economic crisis taking its toll on Cambodian garment
exports, the sector may face factory closures and mass layoffs
THOUSANDS of garment workers in Cambodia could be laid off in coming months if global markets, particularly the United States, continue to fall into deepening economic crisis, labour leaders and garment industry officials said Monday.
Chuon Momthol, president of the Cambodian Union Federation (CUF), a government-aligned union, said as many as 35 garment factories could be shuttered in November or December if dire international market conditions to not improve.
"So far, at least 20,000 workers have been laid off," he said, adding that the 35 factories facing closure employ between 1,000 and 5,000 workers each.
Van Sou Ieng, chairman of the Garment Manufacturers Association of Cambodia, said 30 factories have been closed this year.
"They closed because there were no purchase orders," he said.
"Our factories this year have only been operating at about 70 percent capacity."
He added that there was no indication that the situation for garment makers would improve in the near-term.
"Next year, the garment sector will face greater shortfalls in orders, particularly from buyers in the United States," he said.
Cambodia's nearly 500 garment factories employ about 350,000 workers nationwide, with most coming from the country's rural provinces, the CUF's Chuon Momthol said, adding that September saw the start of a critical downturn in the garment sector.
But Chea Mony, president of the Free Trade Union of Workers, said the garment sector would be unaffected by the economic slump.
"Factory closures were caused by the pullout of some investors who had been in Cambodia for 10 or 20 years but who have moved on to avoid legal conflicts over labour issues with the workers," he said.