According to a report generated by the Commerce Ministry of Cambodia, out of the 982 garment factories that were registered with the Ministry, 130 have closed down in 2015.
Despite the fact that more factories have shut than opened, Ho Sivyong, Director, Import and Export Department at the Ministry is still optimistic about the increase in production next year, owing to commitments made by global apparel brands to source more products from Cambodian garment factories.
According to Sivyong, strikes for higher minimum wages were a major roadblock for new investments this year, which is leading to shift in production to Myanmar, as it too enjoys duty- and quota-free access to the European market.
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Cambodia not being a part of the Trans-Pacific Partnership (TPP) is another reason that is making apparel manufacturers shift their base to countries like Vietnam and Malaysia, who are a part of the TPP. Also, a few African nations and Myanmar are attracting investments due to low wages in these regions. A representative of the Garment Manufacturers Association in Cambodia (GMAC) also informed that a few apparel and footwear companies have shut down production in Cambodia as they lost confidence in investing here due to continuous demonstrations by workers.
The representative further added that the Cambodian Government officials should work harder to explain the labour laws of the country to the workers at apparel manufacturing units properly to avoid further damage to industrial relations, ensure stability of production and gain the confidence of investors as well as the global buyers who source their products from Cambodia.
