Global Apparels Limited, a Malaysian-owned readymade garment (RMG) factory in Phnom Penh, Cambodia, has announced its formal closure, following lack of orders and a year of losses faced by the company.
The factory, which would close down completely by October 2016, would not be able to pay its workers if it continues to operate beyond that, as it has a dearth of orders and fierce regional competition that has higher levels of output. Productivity issues have been the foremost concern for a lot of factories in Cambodia, as strong competitor countries like Vietnam and Bangladesh are showcasing higher productivity at lower costs.
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However, an official from the Collective Union of Movement of Workers believes otherwise, and claims that bankruptcy is an excuse which the company is putting up to avoid fulfilling back pay and tax obligations, and simply move to a new location. “The company might have a new name or want to change its location. Although that is not the easy way,” he added.
Global Apparels (Cambodia) was incorporated in October 2003, built on a land of 80,000 sq. ft. The company, which manufactures knits and woven apparels, has monthly production capacity is 600,000 pieces. It currently employs approximately 2,000 employees and exports to US, Europe, and Japan primarily (as per company’s website).
