US retail multinational Walmart will increase orders of Cambodian garments and footwear products in the upcoming year and will also start buying travel goods manufactured in the kingdom, according to a company statement.
The American retail giant’s positive announcement comes amid an escalating diplomatic row between Cambodia and its Western partners.
In a letter dated December 6 and addressed to Cambodia’s Minister of Labour Ith Samheng, Walmart said Cambodia is a key element in the corporation’s international supply chain.
“We are Cambodia’s leading exporter of footwear and second leading exporter of apparel. Next year, we hope to begin to export travel products,” the letter read.
“We are happy to share our experience working with other sourcing markets and to help Cambodian manufacturers increase competitiveness, productivity and efficiency.”
Representatives of Walmart visited the kingdom early last month to meet with high-ranking officials and visit local factories. During the delegation’s visit, Scott Price, the senior executive at Walmart, reiterated his commitment to increasing orders of Cambodian products, saying they were satisfied with the quality of garments, footwear and luggage products bearing the “Made in Cambodia” label.
In a statement issued yesterday, the Garment Manufacturers Association in Cambodia (GMAC) expressed its satisfaction with the US company’s commitments and policy.
“Walmart’s support improves the business and investment climate in the country and it is great for the nation’s economy,” the statement said.
“In addition, it allows us to benefit greatly from their expertise, innovation and technology, and gives us an opportunity to learn how the global apparel and footwear industry operates.”
During the annual meeting of its ministry’s cabinet, Commerce Minister Pan Sorasak said European and US buyers have already placed a high number of orders for 2018.
“We are not worried about exports in the garment and footwear industry,” Mr Sorasak said.
In its statement, GMAC said the Cambodian garment industry should be proud of its progress when it comes to labour conditions.
“Labour compliance is one of the points for consideration in the buyers’ balance score card. Walmart’s continued engagement with us means we have been performing well, or, precisely speaking, performing at an internationally-accepted standard.
“As the world is moving towards sustainable development, labour compliance is gaining more weight in buyers’ score cards.”
According to the statement, a purchaser’s score card is comprised of four elements: price, quality, delivery and labour and social compliance.
In a milestone for the local garment industry, the US government last year granted duty-free benefits to Cambodia travel goods – such as suitcases, backpacks, handbags and wallets – under the Generalised System of Preferences.
Garment and footwear exports to the US were valued at $3.7 billion during the first half of the year, up 6.9 percent compared with the same period in 2016, according to the Ministry of Labour.