The Garment Manufacturers Association in Cambodia (GMAC) has stated approximately 60 percent of its factories have been severely affected by cancelled orders of ready-made garment exports, due to the COVID-19 pandemic.
Ken Loo, secretary-general of GMAC told Khmer Times that the majority of buyers of Cambodian garments and textiles have already cancelled their orders. However, the association could not put a specific monetary value on what the cancellations will cost.
“A large majority of buyers have cancelled orders with our factories, however, we have not been able to determine a specific dollar value, as of yet. We do know that the bulk of these cancelled orders have come from both the US and EU markets, which represent 28 percent and 46 percent of our export market respectively,” Ken said.
“If we do a calculation on these two figures we reach 74 percent, out of the approximate 750,000 workforce in the garment sector – this equates to around 500,000 workers that have been impacted by these cancellations,” Ken added.
In 2019, Cambodian garments, footwear and travel goods exports were valued at $9.35 billion, representing a year-on-year increase of 11 percent, according to a report from the Ministry of Industry and Handicraft.
Speaking about the issue, Prime Minister Hun Sen said that around 100 factories had already applied for temporary suspension assistance for their workforce. This included a request to the Government to subsidise $40 of their garment workers’ minimum wage of $190 per month. While factory owners were originally requested to pay 40 percent of their workers minimum wage, this has now been reduced to $30.
“The Government had previously requested factory owners to pay 40 percent of their workers minimum wage ($76). However, due to issues with owners unable to pay this amount we have now asked them to pay $30. This will mean suspended workers can continue to earn $70 per month over the next 6 months,” Mr Hun Sen said.
“We also no longer require workers to participate in any training sessions as all educational institutions have been ordered closed,” Mr Hun Sen added.
In response, Ken Loo welcomed the move, saying, “Right now. we all have to join together, we cannot blame or ask for full responsibility from employers. Everyone from the government, employers, buyers and workers need to tighten their belts.”
Ken added that there are 1,069 garment factories registered with the Ministry of Industry and Handicraft and he believes there will be more factories that apply for suspension over the coming months.