Textiles expected to meet targets

Written by Chun Sophal and Hor Hab

Tuesday, 25 November 2008 Phnom Penh Post

Experts at a recent economic forum on garment exports say the $3 billion target may be met, despite the economic slowdown in the United States Photo by: TRACEY SHELTON Workers leaving a Phnom Penh garment factory. A recent panel said that garment exports may meet government targets for 2008. OFFICIALS and analysts said they remain hopeful Cambodia's garment exports will reach the targeted US$3 billion by the end of the year, despite growing concerns over possible factory closures due to the global economic slowdown. Kem Sithan, a secretary of state at the Ministry of Commerce, said Thursday the volume of exports in the first 10 months of this year topped $2.4 billion, comparable to last year's figures. His comments followed a one-day workshop, "Perspectives of the Textile and Clothing Industry and Employment in Cambodia", organised by the Cambodia Institute for Development Study (CIDS) and financed by the German NGO Friedrich Ebert Stiftung. "I think Cambodia's garment exports can reach about $3 billion in 2008, and this sector will continue to be strong next year," Kem Sithan said. Last year, garment exports were worth $2.9 billion, with 319 factories employing more than 380,000 workers, according to ministry figures. But CIDS Director Kang Chandararot questioned whether Cambodia would meet the $3 billion mark as the financial crisis continues to take a toll on the United States, the Kingdom's largest garment export market. "I have little hope that Cambodia can sustain its high garment export levels this year and next year because it is unlikely to escape the effects of the crisis in the United States," he said. I think cambodia's garment exports can reach about $3 billion in 2008. He added that he expected the sector would be able to compete with China and Vietnam, the region's principal exporters, because margins are higher in Cambodia, which would give manufacturers leeway to cut prices. He said garment exports have continued to rise, albeit at a slower pace than in previous years, with purchase orders dropping between nine and ten percent in 2008. Purchase orders to drop Cheath Khemara, a senior labour officer with the Garment Manufacturers Association of Cambodia (GMAC), said the global financial crisis and stiff competition from other countries could see purchase orders drop by as much as 30 percent in coming months. Cambodia faces a growing turf war with more than 20 garment-exporting countries - including China, Vietnam and Bangladesh - that are competing for market share by cutting costs and promoting products abroad, Cheath Khemara said. "We are really worried about our garment sector in 2009, but we hope the government will find an efficient way to deal with this situation," Cheath Khemara said. He said 30 factories have closed so far this year, and several others continue to operate below normal production levels. GMAC officials said last week that an estimated 20,000 garment workers have been laid off so far this year. GMAC called for government action to curb threats to the garment sector during last week's Government-Private Sector Forum, Cheath Khemara said.