GMAC calls for expansion

The Phnom Penh Post
http://www.phnompenhpost.com/

Written by Chun Sophal and Hor Hab
Thursday, 28 May 2009

Manufacturers group urges rise in orders, production

THE Garment Manufacturers Association of Cambodia (GMAC) has encouraged factories and buyers to increase production and purchase orders for Cambodian garment products to save one of the country's leading export earners from the effects of the economic downturn.

After a garment industry forum Wednesday morning, GMAC President Van Sou Ieng told reporters that the total global purchase orders made by clothing giants Gap, Nike, Adidas, Levi's, Puma and H&M were about US$143 billion per year, but that they only ordered about $2.9 billion in garments from Cambodia last year.

"I want [Cambodian] factories to increase their production by 50 percent and buyers to increase their purchase orders [with Cambodia] to 5 or 10 percent a year [of total global orders] because Cambodia has good labour compliance," he said.

He said that GMAC was negotiating with buyers, but said purchase orders in the first four months of 2009 had only reached 70 percent of the orders made in the same period last year.

"I want producers and buyers to directly cooperate with each other without any intermediary agencies so they can see the real situation in Cambodia," he said.

On Wednesday, more than 20 representatives from export-oriented garment factories met with eight purchasing companies to discuss strategies to help Cambodia become a more attractive destination for garment production.

Industry insiders said the Kingdom's relatively good working conditions could be a boon for the sector while expressing caution in the shorter term.

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We don't want to let our efforts ...turn into a short- lived success story
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"Labour compliance in Cambodia is good, and it can be one of the criteria - including price, quality and design - that will motivate buyers to increase their purchase orders," Kanwarpreet Singh, chief representative of Puls Trading Far East Limited, which represents a number of leading brands in Cambodia, said Wednesday. "We will maintain our purchase orders from last year because we know the market well," he added.

Roger Tan, managing director of Thaipore Garment Manufacturers Co Ltd, agreed that working conditions in Cambodian factories were very good, and expressed hope that buyers would consider this and increase their purchase orders. Although he was optimistic for the future, Tan said it was too early to know what would happen.

Minister of Commerce Cham Prasidh said during Wednesday's forum that Cambodia was the first country to implement a labour-linked trade policy, and that it has gained recognition across the world for its high levels of compliance with labour law established by the International Labour Organisation (ILO). But he said such compliance could not be pursued indefinitely if orders continued to fall.

"If as a result of supporting ILO labour practices [there are] less purchase orders and less business for Cambodian exporters, then our government may have to revisit this policy," he said. "We don't want to let our efforts over the past 10 years to enhance corporate social responsibility in Cambodia turn into a short-lived success story."

According to GMAC, Cambodia currently has 280 export-oriented garment factories employing more than 310,000 workers.