Cambodia’s textile sector shows strength

Garment factory workers

Cambodian garment factory workers on their way to work

The Cambodian garment industry is increasingly on the radar of investors as the country has introduced tax incentives and duty free access to the world’s major textile markets like the US and the UK.

Last year, China turned out to be the largest investor in the Cambodian garment sector with a total investment of $121 million followed by Taiwan with $112 million and South Korea with $70 million.

Singapore, the US, Malaysia, Japan, Thailand, Australia, England and India were some other countries that invested in Cambodian apparel sector in 2012.

The exports of garments and textiles from Cambodia grew to $ 4.61 billion in 2012, up 8 per cent over 2011, according to figures released by the Cambodian commerce ministry in January.

The garment industry is Cambodia’s largest foreign exchange earner. The sector comprises more than 300 factories, employing some 340,000 workers, of which 91 per cent are female. Big clients are, among others, Wal-Mart and H&M.

However, the sector is not trouble-free. In 2012, Cambodian apparel workers resorted to strike several times demanding higher wages. Currently, the minimum wage for a worker in the industry is $61 a month, far too low to cope with rising living expenses in Cambodia, the Free Trade Union of Workers, the country’s largest trade union, argues.

With the help of the International Labor Organisation, the local union has now agreed with the Garment Manufacturers Association of Cambodia to discuss higher salaries for the workers in the garment and footwear industries. The union demands a monthly minimum wage of $120. All relevant parties will meet on February 26 in order to decide on the minimum pay rise.

 

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Arno Maierbrugger

Business journalist

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