June 10, 2011

Garment exports surge as end markets rebound


Cambodia's garment exports surged 45 percent through April on resurgent Western markets and new demand from Asia, officials said yesterday.

Total garment deliveries between January and April reached US$1.2 billion, up from $846 billion in the same period of 2010, according to Ministry of Commerce statistics.

Industry insiders credited a rebound in the world’s economies and a pickup in orders from both overseas and regional markets for the move.

“Our exports should continue to improve now that we’re seeing a recovery from the global financial crisis,” said Cheat Khemara, a senior officer at the Garment Manufacturers Association of Cambodia (GMAC).

“At the same time, the rising demand in new markets in Asia also contributed to the surge,” he said, referring to Japan, China and South Korea.

Cheat Khemara said the garment industry sought out different markets in the region to compensate for slowdowns in the US and European Union, though those markets had since shown increasing signs of strength.

GMAC predicted the industry would grow about 20 percent by the end of the year.

Still, recent exports still have not increased enough to meet global demand, said Kong Putheara, a Director at the Commerce Ministry’s statistics department.

That demand has remained relatively stable because Cambodia makes lower-end garments, which have escaped much of the financial crisis, he said.

“Although some European countries have struggled, our supply is just for ordinary people so the demand still there,” he said.

Minister of Commerce Cham Prasidh last month offered similar sentiments, saying low-end garment products felt little impact during the slowdown.

“We are producing lower-end goods. That means that even if you aren’t wealthy in the US, you can still buy a T-shirt from Cambodia,” he said.

“That’s why we survive. Maybe if we serviced the higher-end market we would suffer more,” he added.

Total exports to the US rose 25 percent in the first four months of 2011, climbing to $654 million from $522 million in the same period last year.

Meanwhile, the EU’s market saw a surge of 78 percent in Cambodian imports to $247 million, up from $139 million the year before.

While exports may be higher, Cheat Khemara claimed growth in profits has remained elusive.

“Now, everything is getting more expensive, like petrol and especially raw materials to supply the industry, but our selling price is the same. So the profit the industry makes is hurt by these expenses,” he said.

Cheat Khemara also said improved regulations have stabilised the sector and helped the industry grow.

At the end of 2010, Cambodia had 273 garment factories, employing a total of 319,000 workers, according to Commerce Ministry data.

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