The garment industry in Cambodia should diversify its offerings, including gradually switching to producing garments of mid-range prices, and venturing into retail, said Q-Port Investments (Cambodia) Co Ltd director Lin Zhi Qiang.
A subsidiary of Hong Kong-based E-Port Enterprise (HK) Co Ltd, Q-Port Investments owns and manufactures the E-Port garments brand.
Setting its production base in Cambodia through Q-Port Investments, E-Port Enterprise has been mainly producing and exporting denim series products to Europe, the US, Japan and Canada.
Q-Port Investments operates two garment factories and one pattern washing facility, which serves denim production factories in Cambodia. The monthly garment production capacity of Q-Port Investments is approximately 350,000 pieces.
Lin established the company’s first factory in Cambodia back in 2002. Since then, Q-Port Investments has created many job opportunities for locals, once hiring around 2,800 workers. It currently employs 1,300 workers.
He stressed that the garment industry has made a significant contribution to the Kingdom’s economic growth and has been a pillar of the country’s economy in the post-war era.
However, increasing labour costs and competition from other emerging garment exporting countries have pushed Q-Port Investments to transfer some of its production lines to other countries such as Bangladesh.
“Labour costs in Cambodia have increased gradually over the years, rising from $45 to $190 this year. The EU’s decision to partially remove the Kingdom’s Everything But Arms (EBA) trade preference status has also affected garment manufacturers.
“Adding to the huge impacts stirred up by the coronavirus pandemic, our total orders from clients had dropped 40 per cent.
“Looking at market demand by country or region, our orders from the US, Europe and Canada had dropped 50 per cent, 30 per cent and 50 per cent, respectively,” Lin said.
However, he said Q-Port Investments is seeing orders returning to 80 per cent of last year’s volume and remains confident of his company’s business volume recovery.
He also noted that Cam-bodia’s garment industry has been producing lower to mid-range garments for a long time.
“It is time the industry focused on mid-range garments or even higher range products. The reason being that higher quality products reward manufacturers with a higher profit margin.
“In my opinion, workers in Cambodia are ready to take on the challenge of producing higher-end products,” Lin said.
Lin has also initiated plans for Q-Port Investments to venture into retail, by renovating and transforming part of the company’s factory space into a shopping destination called the E-Port Center.
The retail centre’s main attraction will be its international branded garment offerings. Other spaces will be rented out to co-working space operators, food and beverage outlets and retailers of cultural item.
With a young population and growing middle class community, the retail industry in Cambodia has much untapped potential to tap, Lin said.