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Exports up despite a slight drop in the number of factories

Sok Chan / Khmer Times Share:
Garment workers at a local factory. The number of factories operating in the kingdom declined in 2017. KT/Ven Rathavong

The value of Cambodian exports rose by 13 percent last year despite a decline of four percent in the number of manufacturing plants operating in the kingdom, according to the latest report from the Ministry of Industry and Handicraft.

In 2017, there were 1,522 factories registered with the ministry, a drop from 2016, when there were 1,579.

While the number of factories that came online in 2017 was larger – 150 in 2017 versus 141 in 2016 – so was the number of factories that closed – 207 last year versus only 12 in 2016.

Exports, however, rose in value, from $10.7 billion in 2017 to $9.56 billion a year earlier. Among those exports, garments and footwear accounted for $7 billion in 2017, a slight increase compare to 2016’s $6.78 billion.

Most registered factories manufactured garments or footwear (1,031 factories), followed by food, beverages and tobacco (117), metal products (108), chemicals, coal, rubber and plastic products (104), paper (44), and wood products (36).

Ministry spokesman Oum Sotha told Khmer Times that the industrial sector in Cambodia is experiencing prosperous times, and that larger factories with better quality standards and equipment are opening every year.

He said he wasn’t concerned about the drop in manufacturing plants and that the decline is simply the result of a change in investment trends, with more money now going into larger factories as opposed to smaller, subpar plants.

“Some factories have transformed their business model, becoming larger operations. The number of factories has dropped, but the performance of the sector as a whole remains intact.

“In the garment sector, some businesses lease small factories. When their contract comes to an end, the factory closes. By contrast, bigger factories continue to operate as long as they are profitable,” he said.

The labour force in the manufacture and industrial sector was composed of 982,203 people in 2017.

The garment and footwear sector alone accounted for 847,419 workers last year, over 86 percent of the entire labour force.

From January 1 to February 20, the Council for the Development of Cambodia (CDC) approved seven factory projects in the garment and footwear sector. Other approved projects include a tobacco factory, a paper mill, a fruit-processing plant, a packaging factory, as well as a cement and a zinc factory.

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