Garment exports improve in first five months of 2010

Photo by: Tracey Shelton
Commerce Ministry statistics show garment exports through May rose 11 percent over last year’s figures.

via Khmer NZ News Media

Wednesday, 09 June 2010 15:01 May Kunmakara

Commerce Ministry credits int’l recovery, internal measures

CAMBODIA’S garment and textile exports rose over 11 percent in the first five months of 2010 year on year, statistics show. Officials said the growth was spurred by a recovery in foreign purchasing power as global markets continued recovering from the financial crisis.

The Kingdom exported US$1.062 billion in garments during the period, an 11.43 increase over $953 million in exports January to May 2009, according to figures obtained from the Ministry of Commerce.

Sector growth was the result of recovering economies in foreign countries and government attempts to link suppliers with foreign buyers, MoC foreign trade director general Sok Sopheak said.

“As suppliers, we should clearly understand the needs of buyers, and must commit to fulfilling orders in a timely fashion.”

He added that internal restructuring of bureaucratic procedures helped boost month-on-month orders.

“We have made it more convenient for garment suppliers by cutting down on unnecessary procedures and paperwork,” he said. “This is the internal factor for growing exports, and the external factor is the recovery of the global economy.”

Cambodia Institute for Development Study president Kang Chandararot said several garment factories had previously gone bankrupt and withdrawn their investment, benefiting remaining investors.

“Many garment factories who survived the low demand caused by the crisis last year are now strong and competitive as the sector recovers, but those who ran away lost their chance to turn a profit.”

Garment Manufacturers’ Association in Cambodia president Ken Loo said the recovery of the global economy led to a surge in consumption.

“The first five months of this year were better than last year because of the improved global economy.”

However, he added that it is too early to predict progress to the year’s end. “Of course, it looks good,” he said. “We are recovering, but we have to wait and see whether the global economy continues recovering, because US employment levels are still not very good.”

The global impact of the Greek sovereign debt crisis also concerns him, he said.

“If economic recovery is hindered by [the Greek crisis], it will affect the global economy, not just Cambodia. We depend on international consumers to purchase our garments – if these countries don’t buy, we don’t have orders.”

Garment exports to the US increased nearly 8 percent to $643.4 million from $594.4 million, according to the statistics. Shipments to the European Union increased 10.4 percent, to $247.6 million during the first five months, from $224.3 million for the same period in 2009, and exports to other foreign markets rose 26.5 percent to $171 million from $135.2 million.

May also experienced growth in garment exports of nearly 27 percent compared with the month last year, reaching $216.4 million from $170.8 in 2009.

Kang Chandararot predicted the sector would continue to improve.

“I believe that the garment industry improves the nation’s economy as global economic conditions return to normal.”

Exploring new markets would diversify the garment industry and lead to the improvement of regional trade, he said.

“We won’t rely on only the US and EU.”

Cambodian garment and textile exports dropped 15.83 percent in 2009 to $2.658 billion, from $3.158 billion a year earlier, according to the Ministry of Commerce.