UK Garment Manufacturer Moves Operations to Cambodia

A major garment manufacturer announced last week it is moving its product development center from the United Kingdom to Cam­bodia, a sign, according to some experts, that despite the effects of the economic crisis, the Cambo­dian garment sector continues to remain internationally competitive.

British company New Island Clothing is setting up “a high level standards product development center,” making the company one of the first to conduct the whole garment-production process—from development to the placement of orders—in Cambodia, New Island General Manager Kevin Plenty said on the sidelines of a garment sector seminar last week.

The company, which has been in Cambodia for nine years and produces up to 75,000 men’s shirts per week, had decided to set up the center here because it makes “the whole production process quicker for our customers,” as the majority of materials come from the Asean region, Mr Plenty said.

The research and development center will be fully functional in six months and employ 45 Cam­bo­dian staffers, including machinists, pattern makers and digitizers, and will be equipped with the latest garment machinery, he said.

Mr Plenty said he believed “more and more companies” would move their complete garment-production process to Cambodia, “as this is what businesses’ [customers] are demanding.”

Van Sou Ieng, president of the Garment Manufacturers Asso­ciation in Cambodia, said Sun­day that New Island’s move was part of a general but slow-moving trend in the local garment sector toward conducting all stages of production in Cambo­dia because it speeds up the production process.

GMAC’s External Affairs Mana­ger Kaing Monika said New Is­land’s strategy showed the factory’s “long-term vision and commitment in Cambodia.” He added that most Cambodian factories only do “cut, make and trim”—a production formula in which raw materials and designs are supplied and factories only really stitch the clo­thes together.

Mr Plenty, who is also a board member of GMAC, said that it had taken a considerable amount of training to start the center and added that the whole garment sector needed to raise the skills level of its workforce to develop further.

With that aim in mind, the Ministry of Labor and Vocational Training is working with GMAC to prepare a national vocational training program for the textile sector as part of the ministry’s efforts to cooperate more with the private sector to develop human resource training, ministry Direc­tor-General Loav Him said last week.

Tuomo Poutiainen, chief technical adviser for the International Labor Organization’s garment sector program Better Factories Cam­bodia, said New Island’s decision was “very positive for industry” and showed there was “enough confidence in the [Cambodian] gar­ment sector to invest even in bad times.”

“It will be one the first [companies] to seriously invest in increasing these capabilities,” he said, adding that he hoped more companies would do the same.

Mr Poutiainen also welcomed the initiative of GMAC and the Labor Ministry to set up a training center for garment workers, which he said was a “prerequisite for the industry to grow and make a step up in the value-chain.”

Chea Mony, president of the Free Trade Union, welcomed more training facilities for garment workers, but added that salaries should rise according to skill level. Trained and experienced workers are currently paid salaries as low as $70 per month, he said.

Mr Mony also said that recently closed garment factories did not provide any certification indicating the skill levels of the most experienced workers. These laid-off wor­kers, he said, would have to accept lower salaries in new jobs and might therefore be discouraged from working in the garment in­dustry again.

More than 50,000 garment wor­k­ers lost their jobs between Sep­tember 2008 and March 2009.

But Mr Plenty said he believed that the industry will see an economic turnaround within six months, and that he is not the only one within the garment industry to feel that way. New Island, he no­ted, had already started to see a recovery in orders from Europe.