With the minimum wage again on the rise, the garments and footwear sector is facing a series of challenges that can only be surmounted by boosting productivity.
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The new minimum wage for the sector, set to come into effect in January next year, will increase the minimum salary of workers in the industry from $153 to $170.
To address productivity issues in the industry, the Cambodia Garment Training Institute (CGTI) – an initiative of the Garment Manufacturers Association in Cambodia (GMAC) – was launched in August.
Khmer Times sat down with Andrew Tey, the director of the training centre, to discuss the CGTI’s role and how it will help tackle some of the most urgent challenges facing the industry.
KT: How has the centre developed since its official inauguration in August?
Mr Tey: We started training in mid-July. We have two courses running at the moment – study I and study II – which are for managers and supervisors. Other than the actual factory workers, the managers and the supervisors are the most important part of a factory. But there is always communication issues between supervisors and workers. So these courses aim to tackle just that.
As of right now, most of our managers and supervisors have a low level of education and skills. Most of them never went to a tertiary education institution. So these courses, which will be taught by foreign experts with the help of Khmer translators, will help them develop their skills and train them in productivity. Working with managers on these kind of issues is essential to improve factory productivity.
KT: What do you envision for the centre in the near future?
Mr Tey: There is great demand from members to develop more courses for low and mid-level managers. There is a lack of local talent in this area and a lot of management positions are currently taken by expats. In time, as we develop these courses, our institution should become one of the biggest of its kind in Southeast Asia.
We’ve chosen the Textile and Fashion Industry Training Centre in Singapore, also known as TaF.tc, to be our partner in this enterprise, giving the courses and helping us build CGTI. Our vision is to develop the whole Cambodian fashion industry. We already have courses to help nurture local talent in three key areas: merchandising, product quality and product development. We are teaching designers how to create their own designs and how to market them.
So we take a more comprehensive approach, aiming to develop all the range of skills involved in the industry. We want to bring the industry forward and to change the mindset of the people when it comes to the garments and footwear sector.
KT: The industry has been present in the country for decades. Why is GMAC now concerned with productivity?
Mr Tey: The challenges facing the industry are multiplying. Just recently the minimum wage rose. When wages go up, productivity needs to rise as well.
Why have we taken a long time to tackle the productivity issue? Well, we needed to understand better the needs of the industry. In fact, this is not GMAC’s first training centre. CGTI is actually the second project of its kind in the country and came to be because we needed a bigger space where we could train more people.
A centre like CGTI will provide countless opportunities for Cambodians to develop and hone a wide range of skills. This will help us compete at a regional scale with countries like Vietnam, Myanmar or Bangladesh, helping to up standards of quality across the industry.
Keep in mind that we are also open to non-GMAC members and the general public, but they have to pay more for the courses because they are not paying the GMAC membership fee.
KT: What can CGTI due to increase the number of locals in mid-level management positions?
Mr Tey: It will definitely be a very lengthy process, but with our help an increasing number of locals will acquire the skills they need to take on these sort of positions and more and more companies will choose locals over expatriates. By coming to our centre locals will learn the best standards for their particular occupation. Our courses are very professional, despite being fairly short.
But remember that training is a long-term investment, and that it could take anywhere from two to eight years to reach that point in which locals are in greater demand than expats for management positions, depending also on how stable the country is politically.
I will tell you that, compared to five years ago, there are already a lot of companies seeking out local managers. We have a partnership with the National Career Agency that is bearing fruit. They find us talented recent graduates and we train them and put them in the factories.
KT: Based on government figures, exports for the industry are not performing particularly well. Why do you think this is?
Mr Tey: It’s not just Cambodia. It’s all over the world. The US, Europe and pretty much everyone else are undergoing recession and they are not buying. This, of course, affects Cambodia when it comes to exports, as well as everyone else.
However, Cambodian exports are still growing thanks to an expansion of the US Generalized System of Preferences (GSP) that allows Cambodia to send travel goods to the US duty free. So the luggage industry will likely continue to grow, while garments and footwear will maintain their current levels due to sluggish global economic growth.