Cambodia’s textile imports reach US$1 billion
Last year, Cambodia’s garment industry imported $1 billion in raw materials, and the Cambodian Garment Manufacturers Association called for greater use of local products to reduce costs and increase exports to Western markets.
Van Sou Ieng, president of the Cambodian Garment Manufacturers Association, said: “Compared to other countries in the region, Cambodia imports most of the raw materials for the garment sector. Importing too many raw materials reduces our competitiveness and Tax revenue.” Kaing Monika, the association’s external affairs manager, said: “66% of clothing companies import raw materials from China, and the rest from Taiwan and South Korea. This increases the price of Cambodian products and affects Cambodia’s country of origin. status. At our meeting to discuss trade, some countries that import clothing from Cambodia asked Cambodia to import raw materials from ASEAN countries in exchange for favorable taxes.” In 2007, Cambodia spent US$800 million importing fabrics, of which imports from China reached 5.31 One hundred million U.S. dollars.
The EU has given Cambodia a preferential trade status for products manufactured using fabrics imported from ASEAN, so fabric imports from China are at a disadvantage. If Cambodia is allowed to import fabrics from China, this means that the trade deal will not help Cambodia, only help China.
High start-up costs are a barrier to new investment, and government assistance for new projects should serve as a catalyst. The Cambodian Garment Manufacturers Association would like to see more local fabric production, but the government has not supported us in attracting investment. I don’t think local production of fabrics will happen anytime soon as it costs up to $15 million to set up a fabric factory and investors have to be pretty confident. If we can produce fabrics locally, we can make huge profits without having to import fabrics from other countries.
Mao Thora, a secretary at the Cambodian Ministry of Commerce, said that imported raw materials account for only a small proportion of the cost of locally produced clothing. “I think our imports are still very low compared to our exports of US$2.6 billion. We are trying to persuade investors from China and South Korea to build factories in Cambodia and produce them. At the same time, Cambodia needs to improve the quality of local clothing. This means producing high-quality fabrics.”
Cambodia has a fabric factory in Kampong Cham Province, which was established by Chinese investors, but it only produces medical fabrics.
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