Some 57 garment factories in Laos produce clothing for exports, 28 factories produce clothes for exporters and the domestic market, and the remaining 31 factories produce parts of clothing.
These factories create 27,000 jobs for local people, with 90 per cent of jobs going to women. These factories have FDIand the FDI has come mainly from Thailand. This is 60 to 80 per cent. The remaining is from France, Hong Kong, Italy, Taiwan. Now the new investment is coming in and it is mainly from Japan. Japan has set up four new factories. Japan is shifting investment away from China. The investment has gone into machinery, merchandising. These factories are mainly into men’s wear and women’s wear.
The EU is the main clothing export market for Laos, while Japanese investors are interested in moving their clothing production base from China to Laos.
In 2016, Laos’ garment exports to the EU fell ten per cent; to Japan fell five per cent; to the US fell 21 per cent decline; and to Canada fell 56 per cent.
However Laos’ garment exports to other countries increased 64 per cent.
Shortage of workers is a chronic problem in the sector, resulting in a reduction of garment exports.