Cambodia to temporarily close 200 textile factories as supply chains dry up due to virus

The Cambodian government has warned that about 200 garment and textile factories in the country will likely be forced to temporarily suspend operations or at least slow production from next month onwards as raw material had stopped arriving from China owing to the coronavirus outbreak.

“From predictions as well as an actual survey about the impact of coronavirus, we know that in March nearly 200 factories will face a lack of raw materials and this will affect about 110,000 workers,” labour ministry spokesman Heng Sour told Reuters.

He noted that about ten factories with over 3,000 workers have already notified the government that they will partially suspend operations.

The move comes as the Cambodian garment industry is already under pressure after the European Union ended a preferential trade programme over the bleak human rights situation in the country earlier in February. This will result in a loss of about 20 per cent of the trade preferences Cambodia enjoyed with the European bloc, equating about €1 billion of exports.

Government offer relief for factories and workers

Cambodian Prime Minister Hun Sen has promised tax breaks to garment factories hit by supply chain disruptions and higher tariffs after the EU withdrew the trade preferences. He also said the government would help companies pay 60 per cent of lost wages to workers if production is halted. Hun Sen also asked Chinese producers to freight critical raw materials by plane to ease the shortages.

The garment industry is Cambodia’s largest employer, generating $7 billion for the economy each year, according to official data. The EU contributes around 77 per cent to this figure.

The Cambodian government has warned that about 200 garment and textile factories in the country will likely be forced to temporarily suspend operations or at least slow production from next month onwards as raw material had stopped arriving from China owing to the coronavirus outbreak. “From predictions as well as an actual survey about the impact of coronavirus, we know that in March nearly 200 factories will face a lack of raw materials and this will affect about 110,000 workers,” labour ministry spokesman Heng Sour told Reuters. He noted that about ten factories with over 3,000 workers have already notified...

The Cambodian government has warned that about 200 garment and textile factories in the country will likely be forced to temporarily suspend operations or at least slow production from next month onwards as raw material had stopped arriving from China owing to the coronavirus outbreak.

“From predictions as well as an actual survey about the impact of coronavirus, we know that in March nearly 200 factories will face a lack of raw materials and this will affect about 110,000 workers,” labour ministry spokesman Heng Sour told Reuters.

He noted that about ten factories with over 3,000 workers have already notified the government that they will partially suspend operations.

The move comes as the Cambodian garment industry is already under pressure after the European Union ended a preferential trade programme over the bleak human rights situation in the country earlier in February. This will result in a loss of about 20 per cent of the trade preferences Cambodia enjoyed with the European bloc, equating about €1 billion of exports.

Government offer relief for factories and workers

Cambodian Prime Minister Hun Sen has promised tax breaks to garment factories hit by supply chain disruptions and higher tariffs after the EU withdrew the trade preferences. He also said the government would help companies pay 60 per cent of lost wages to workers if production is halted. Hun Sen also asked Chinese producers to freight critical raw materials by plane to ease the shortages.

The garment industry is Cambodia’s largest employer, generating $7 billion for the economy each year, according to official data. The EU contributes around 77 per cent to this figure.

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