Garment Sector Hears Tentative Purchase Promises From Firms

Representatives of the some of the world’s largest garment brands expressed desire to continue sourcing from Cambodia after meeting in Phnom Penh last week with garment sector managers and union leaders, the International Labor Organization announced Monday.

Although Swedish clothing company H&M was the sole company to actually commit to increasing purchases, 28 representatives from more than a dozen garment buyers said they would recommend that their companies continue purchasing Cambodian-made garments, said Tuomo Poutiainen, ILO chief technical adviser for the Better Factories Cambodia program, which monitors labor conditions and workers rights in some 300 garment factories.

The ILO and the International Finance Corporation, the private-sector arm of the World Bank, hold the International Buyers’ Forum twice a year in Cambodia and Hong Kong to talk about industry trends and concerns.

“It was not a forum to pledge orders, but to discuss the outlook of the garment industry,” Poutiainen said by telephone.

And that outlook is positive, he said.

“Cambodia is relatively well off, and its business fundamentals are in good shape,” Poutiainen said.

“In a general sense, it looks very good for the industry. It’s remarkable that Cambodia continues to export orders at about the same level as last year,” he added.

GMAC has estimated that ex­port revenues to the US, which account for 70 percent of all garment exports, declined by 1 percent during the first half of 2008.

Buyer and garment sector representatives agreed during the two-day forum Thursday and Friday that Cambodia should increase competitiveness by improving quality and productivity of exports, though Poutiainen said tangible steps to achieve these goals were not discussed.

However, Kaing Monica, external affairs manager of the Garment Manufacturers Association in Cambodia, lamented that H&M alone committed to increasing its purchases by 15 percent in 2009.

“The rest said they believed in the [Better Factories] program…

but no one spoke clearly about commitment,” he said by telephone Monday.

“Every time we have a meeting, they say they have a commitment to increase orders,” he added. “We’ve heard their commitment, but we really want to see.”

Kaing Monica said Gap Inc, another clothing giant at the forum, had actually decreased its orders of Cambodian-made garments by 20 percent in the first nine months of 2008, while increasing purchases from Viet­nam and Bangladesh, causing lingering doubt whether the Better Factories program, which is unique to Cambodia, helps the garment industry.

“I’m not saying it’s good or bad. You can make your own judgment based on our exports,” Kaing Monica said.

Meanwhile, Hong Kong-based garment manufacturer Tack Fat Group International, parent company of the 5,600-employee factory Tack Fat (Cambodia) Ltd in Phnom Penh, filed for bankruptcy last month, Reuters reported Friday.

“I do not know this officially,” Kaing Monica said of the bankruptcy filing. “But if true, it somehow sends a big signal to all involved that correction is needed for this industry.”

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