Garment orders climb 10 percent in first half

via Khmer NZ

Tuesday, 27 July 2010 15:00 May Kunmakara

GARMENT exports from the Kingdom climbed more than 10 percent to more than US$1.3 billion in the first half of 2010 compared to the same period last year, according to Ministry of Commerce figures.

However, industry officials cautioned that continued growth in the sector required low labour costs.

The Kingdom stood to benefit from garment factories fleeing China’s higher worker wages, provided Cambodian pay stayed steady, said Garment Manufacturers Association in Cambodia secretary general Ken Loo yesterday.

“We can draw more investors if we continue with very low labour costs,” he said. “But a higher minimum wage will impact manufacturers. If unions and workers demand more and more, factories won’t come here.”

The Labour Advisory Committee increased the monthly minimum wage to $61 from $50 earlier this month.

In general, Cambodia was well-positioned to build on gains in the sector seen so far this year, Ken Loo said.

According to the MoC statistics, the Kingdom exported $1.33 billion in the first half of the year, up 10.29 percent from the $1.21 billion exported a year earlier.

Shipments to the United States increased 7.19 percent to $792.5 million to the end of June , according to the MoC statistics.

Europe received 7.31 percent more exports from Cambodia, to $320 million for the first half of the year, while shipments to other foreign markets increased 8.61 percent during the same period to $183.6 million.

International Trade Department Director General Sok Sophea also cautioned against increasing the minimum wage too quickly.

“If Chinese investors think our labour costs are higher than others, then they won’t come to Cambodia,” he said.

He said that garment industry growth so far this year came as international consumption continued to recover and through efforts of the government to promote products from the industry.

“The sector grows with a surge in orders from buyers in each country,” Sok Sopheak said.

Ken Loo agreed that the recovering global economy was the prime driver behind increased shipments of exports. However, he said that exports had yet to recover to pre-crisis levels.

“We still have not refilled the loss in orders that we suffered in 2009.”