Exports of garments and footwear products will grow by five percent this year, with similar growth rates expected for the next five years, a representative of the Garment Manufacturers Association in Cambodia (GMAC) said yesterday.
Ken Loo, the secretary-general of GMAC, said garment exports will be expanding at a rate of five percent by the end of the year, adding that he expects similar growth in coming years if certain issues hindering the industry are addressed.
Issues now hampering the sector are high production costs, low productivity and access to a limited number of markets, Mr Loo said.
“If we take care of these issues, the industry will continue to grow,” he said.
“When the minimum wage is raised to $170 in January, more factories will encounter difficulties if things don’t change. We hope there is a change in productivity, a reduction in the cost of doing business and new governmental policies to help investors,” he added.
Exports in the sector already increased six percent during the first nine months of the year, compared with the same period in 2016, Mr Loo said.
According to Kao Kosal, the director-general for trade support service at the Ministry of Commerce, Cambodia’s total export volume reached $9 billion from January to September this year.
Eighty percent of that trade consisted of garments or footwear.
Mr Kosal, speaking during the Cambodia Textile Summit, said the government is working on getting access to more markets for locally manufactured garments, as well as negotiating more favourable trade deals with the European Union and the US.
Twenty-five new garment factories have begun operations since the beginning of the year, but 53 have closed, alleging high costs as the reason for discontinuing operations, according to GMAC’s figures.
Exports of garments and footwear products rose 7.2 percent last year, reaching $7.3 billion.