The Garment Manufacturers Association of Cambodia on Monday expressed concern over potential raw material shortages that could affect factory output in Cambodia, as the coronavirus epidemic shows no signs of dying down in China.
Ken Loo, GMAC Secretary General, said on Monday that 60 percent of materials used in garment production were imported from China. Cambodia is heavily reliant on raw material imports given the lack of locally produced raw material or garment ancillary factories.
He added that the Chinese government had ordered the closure of some factories and wasn’t sure when those factories will be operational again. The Chinese government had also increased the number of holidays given for the Lunar New Year, extending the holiday to last Sunday, but media reports show that workers are yet to return to factories across many parts of China.
“We worry that if the suspension [of Chinese exports] continues, say till the end of February, we could encounter hardships,” he said. “And say further into March, some factories would not have supply of raw material.”
Ken Loo added that most factories in Cambodia have around three weeks of raw material inventories, with some Chinese factories now being shuttered for close to a month.
The viral outbreak has seen more than 40,000 people infected in China alone, and resulted in more than 1,000 deaths. Cambodia has so far only reported one case of the viral pneumonia, a Chinese national who flew into the country last month and has fully recovered as of Monday.
Heng Sour, a Ministry of Labor spokesperson, said that the ministry was working with factory owners and was aware that raw material stocks would last only till the second week of March.
He added that the ministry was exploring the possibility of procuring raw materials from other locations to supply Cambodia’s production chain.
“It's not just an issue for Cambodia. Nowadays, production in Asia, or even worldwide, is facing shortage of raw materials from China,” he said.
Yang Sophorn, president of workers union Cambodian Alliance of Trade Unions, also expressed concerns over the effects on workers if production were to come to a halt.
“If raw materials are the case, I think that it is the point of concern for the workforce in the garment and footwear industry,”
The garment and footwear industry in Cambodia employs around 750,000 workers in The EU is the biggest export market for the industry but that could be under threat, as the EU Commission prepares to announce the results of its year-long investigation into Cambodia’s human rights record. The economic bloc could potentially suspend the critical “Everything But Arms” trade privileges.
Till Monday afternoon more than 900 people in China have died from coronavirus. More than 40 000 people are affected from the virus which exploded in the city of Wuhan and spread to nearly 30 countries. The number of death continues to rise on a daily basis.