Fourth quarter Cambodian garment exports plummet 46 percent official

garment workers in one of the many garment factories in Phnom Penh.

PHNOM PENH (AFP) — Cambodian garment exports plummeted 46 percent in the fourth quarter of 2007, capping off a dismal year in one of the impoverished country's key sectors, industry officials say, warning of future factory closures and job cuts.
An economic downturn in the United States, which buys 70 percent of all Cambodian textiles, and continuing domestic labour disputes contributed to the plunge, said Van Sou Ieng, chairman of the Garment Manufacturers' Association of Cambodia (GMAC).
Until last year, the sector had enjoyed annual growth of up to 20 percent, he added.
But export growth for all of 2007 stood at only 2.4 percent, representing 2.9 billion dollars, Van Sou Ieng told AFP, adding that the outlook for 2008 "surely was not good."
"Definitely some factories will close, some people will lose their jobs," he said.
Cambodia's garment industry is the impoverished country's largest source of income, providing 80 percent of its foreign exchange earnings and employing an estimated 350,000 people.
Despite heavy competition within the region, namely from China and Vietnam, Cambodia has won over buyers in the US and Europe with its labour-friendly image.
This should help it maintain some market presence, said Tuomo Poutiainen, the chief technical advisor with the International Labour Organisation's Better Factories Cambodia programme, which monitors workplace conditions.
"Cambodia will most probably remain a good sourcing destination at least for the established brands," he said.
But the end of US restrictions against Chinese textile exports in 2009, as well as greater productivity and cheaper utilities in Vietnam are still likely to erode Cambodia's position, industry officials warn.
Deteriorating labour relations are also weakening the sector, Van Sou Ieng said.
"The immediate solution is improving industrial relations."
"If we can convince our colleagues from the unions to cooperate and be more serious and productive, we might be able to maintain some permanence," he added.
Industry officials said an estimated 1,100 separate unions are operating in Cambodia's 300 garment factories, with some manufacturers having to deal with as many as seven workers' groups at one time.
"It is impossible to manage," Van Sou Ieng said, adding that frequent illegal strikes have cut heavily into productivity and driven away foreign buyers.
"It is a serious black mark on the industry," he said.
Labour leaders have disputed factory owners' claims, saying they are greatly exaggerating the number of strikes and that workers are simply lobbying for fair wages.
Minimum wage for garment workers hovers around 50 dollars per month.
"The message that the whole of the garment sector is hearing is that there needs to be a common way forward that sensibly represents the interest of all," said the ILO's Poutiainen.
"Global competition is brutal and any discouraging news from Cambodia in terms of labour unrest may affect negatively the levels of orders," he added.
In the wake of last year's slaying of a third union leader, several international clothing manufacturers said a resolution to labour-related violence was crucial to their continued presence in Cambodia.