Prospects for the Textile and Garment Industry in Cambodia

Prospects for the Textile and Garment Industry in Cambodia

Cambodia’s garment industry has evolved from nowhere in the mid-1990s to become the country’s
most important manufacturing sector. This meteoric rise has been aided by more settled political and
social conditions following the horrors of the Khmer Rouge regime and by the adoption of an open
market economy.
In particular, the government has provided strong encouragement for foreign investors through a
series of generous incentives, while exports have benefited from preferential access to the all-important
markets of the USA and the EU.
As a result, garment manufacturing now accounts for around 14% of the country’s GDP and for 82%
of exports, as well as employing 45% of its manufacturing workforce.
This momentum appears set to continue, although there are a number of serious impediments to
overcome. The sector is uncomfortably dependent on imported raw materials for its production. Also,
the country’s infrastructure requires huge investment in power generation and transport.
There is a need also for the sector to utilise more high-tech manufacturing equipment rather than
depending on low cost labour as a means of retaining international competitiveness. The industry
would benefit too if more value adding processes such as design and marketing came under domestic
control.
On balance, though, the dynamism and vibrancy which have characterised the garment industry’s
recent development look set to continue.

SUMMARY
DEVELOPMENT OF THE TEXTILE AND GARMENT INDUSTRY IN CAMBODIA
IMPORTANCE OF THE TEXTILE AND GARMENT INDUSTRY TO THE CAMBODIAN
ECONOMY
CAMBODIA: COUNTRY BACKGROUND
Geography
Political structure
Economic performance
CAMBODIA: INFRASTRUCTURE
Energy
Transport
Foreign trade zones
CAMBODIA: HUMAN RESOURCES
STRUCTURE OF THE GARMENT INDUSTRY IN CAMBODIA
Industry growth
Quotas
Location
Ownership
PRODUCTION TRENDS AND PRODUCTS MANUFACTURED BY THE CAMBODIAN
GARMENT INDUSTRY
Products
Brands
CAMBODIAN TEXTILE AND GARMENT EXPORTS AND IMPORTS
Exports
Imports
PRODUCTION TECHNOLOGY AND MACHINERY IN THE CAMBODIAN GARMENT
INDUSTRY
FOREIGN INVESTMENT IN THE CAMBODIAN TEXTILE AND GARMENT INDUSTRY
CAMBODIAN GOVERNMENT POLICIES AND INVESTMENT INCENTIVES
Government policies
Investment incentives STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS
Strengths
Weaknesses
Opportunities
Threats
FUTURE PROSPECTS
List of tables
Table 1: Cambodia: number of clothing factories and employees, 1995-2006
Table 2: Cambodia: share of textiles and clothing in total GDP, 2000-06
Table 3: Cambodia: political and economic profile, 2007
Table 4: Cambodia: economic indicators, 2005-07
Table 5: Cambodia: clothing exports by value and by volume, 1995-2006
Table 6: Cambodia: clothing exports by leading destination, by value, 2003-06
Table 7: Cambodia: clothing exports by leading destination, by volume, 2005 and 2006
Table 8: Cambodia: textile imports by value, 2000-06
Table 9: Cambodia: investment in the clothing industry, 2000-06