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Productivity boost becomes a compulsion for garment and footwear sectors

According to a Singaporean research firm the Cambodian garment and footwear industries need to boost productivity and cut down costs if they are to remain competitive in international markets. Cambodian factory owners should now endeavor to ramp up efficiency at their facilities, with the public sector doing its part in improving logistics infrastructure and reducing the cost of electricity, before the latest wage increase comes into effect according to a report from ASEAN+3 Macroeconomic Research Office (AMRO).

The report further says a new minimum wage for the garment sector will kick in January next year, increasing the minimum salary for workers in the industry from $153 to $170. The new directive makes the minimum wage in the kingdom higher than those of other countries with large garment industries, such as Bangladesh and Myanmar. Kaing Monika, Deputy Secretary-General, Garment Manufacturers Association in Cambodia (GMAC), applauded the report for its accuracy and said they’ve been working for a long time to bolster productivity in the sector.

At present, Cambodia has 520 garment factories and 52 footwear factories which are members of GMAC. According to official data from the General Department of Customs and Excise (GDCE), garment and footwear exports which account for 78 per cent of total exports that increased by 7.2 per cent 2016, reaching $7.3 billion. AMRO forecasts economic growth will remain robust throughout 2017 and 2018, with inflation reaching 3.3 per cent in 2017, up from 3 per cent in 2016, driven by the surging price of crude oil.