More than 100 factories have suspended work due to declining orders, putting thousands of jobs at risk, a union leader said.
Ath Thorn, President of the Coalition of Cambodian Apparel Workers’ Democratic Union (CCAWDU), said on Monday that as of January 2023, about 10 percent of Cambodia’s 1,200 factories have suspended operations. In addition, three to four percent of factories have closed.
Thorn said this could put workers at risk and they will face unemployment, with it being especially difficult to find new jobs. He added that eight factories that have suspended work employed about 13,000 workers.
In addition, two factories that have closed employed about 3,000 garment workers.
Kaing Monika of Textile, Apparel, Footwear and Travel Goods Association in Cambodia, said it is unfortunate that due to the global economic situation this issue is impacting the livelihoods of many Cambodians and the operation of businesses.
“This sector depends entirely on the global market, which is not under our control,” Monika said.
He added that some of the temporary suspensions present an opportunity, both for the government, factory owners and workers, to focus on up-skilling and retraining workers.
“We can take advantage of the skills training fund managed by the Ministry of Economy. This training can help us be better prepared when the economy returns to normal,” Monika told Kiripost.
Hong Vannak, an economic researcher at the Royal Academy of Cambodia, said that the suspension and closures of factories are due to the decline of purchasing globally.
There is a decline and it has led to a reduction in production chains, Vannak said.
He added that there will be a decrease in the buying of clothes, shoes, bags and travel accessories due to the crisis of rising prices in Europe and the United States.
“When we talk about businesses, factories or other enterprises that are doing business, we see there is a risk. The biggest risk is the purchasing risk. When purchasing slows down, it leads to a decrease in production force or production processes,” Vannak said.
He added that Cambodia has partially lost the Everything But Arms initiative (EBA) and Generalised System of Preferences (GSP) from the United States, and the government has been creating policies to encourage investors into non-garment sectors.
“The way people dress, they use old clothes, they think of priority goods, such as food. This is the problem that Cambodia and other countries are facing,” Vannak said.
We are in debt
Garment worker, Tith Leang, said on Tuesday he has been suspended from work for about two weeks after there was no more work for him to do. He came to work this week but found there is even less work.
He said he is worried that when other members of his team start to be suspended, the factory may close completely.
“From our experience, when we are often suspended, sometimes it is a sign of closure, but it is hard to close some places that have been suspended for nearly a year,” Leang said.
“It is just from my observation. Mostly I believe that we are in debt, so when this sector is affected, there are thousands of people affected.”
We don’t have any skills
Chhom Sophorn, 45, who works in a factory in Sangkat Chaom Chao, Khan Pou Senchey, said on Monday that she has worked as a cleaner for more than 20 years. With her salary, she also depends on her husband.
Her factory is suspended but she is not affected, while other workers in the factory had their pay decreased due to less work.
She added that nowadays, some factories close due to a lack of work. However, when they reopen, they employ new staff rather than rehire suspended workers.
“We don't know, maybe we are old. When they [factories] reopen, they start to hire new workers. I don’t have other skills besides doing this job, which has fed me and my family for half my life,” she said.
“When we don’t have any skills and when we stop this work, we are finished and will go to the farm as normal.”
