The Cambodian Footwear Chamber of Commerce issued a notice on the 4th saying that due to the impact of the new coronavirus epidemic, buyers in the European and American markets have successively canceled orders in large numbers, causing the Cambodian footwear industry to face huge challenges.
Cambodia’s shoe industry “cold winter”
According to the notice, according to a survey of chamber of commerce members on March 30, among the approximately 127,000 workers employed in the industry in April, approximately 57% of the 72,000 workers were able to go to work normally, and 25% Workers are facing work stoppages, and 12% of workers are facing total work stoppages. Another 6% of factories are unable to confirm whether the order status can be smoothly arranged for production.
Data map
The situation was even more dire in May. Only 11% of workers could go to work normally, and most About 60% of factories are unable to confirm the status of orders, and orders from June to the following months are even more unclear, which will seriously impact the overall employment population and industrial economy.
It said that here, the Cambodian Footwear Chamber of Commerce only appeals to the buyers on behalf of its members. The payment period for the confirmed order has been shortened, and the completed order can be paid to the factory as soon as possible. , so that the factory can have enough funds to tide over this crisis.
The Cambodian Shoe Industry Chamber of Commerce hopes to get assistance from the Cambodian government. During the material shortage period in January and February, the factory still has orders. The government calls on the factory to subsidize workers during the shutdown due to material problems. The base salary is 40%. But in this moment of crisis, the factory is facing no orders, no income and capital flow to continue to subsidize workers for a long time. Continued subsidies will put the factory into a greater crisis.
“We plead with the government to provide financial assistance, subsidize workers and factories at the same time, or grant special loans to enterprises so that they can have capital flow to maintain operations.”
The notice stated that if the situation does not improve and orders are unclear, the factory will face a long-term shutdown or even be closed and unable to operate. We thank all employees for understanding the current difficulties, and we hope that the government can lead the entire industry and workers to tide over the crisis together.
91 garment factories plan to apply for suspension
On April 2, the Ministry of Labor pointed out to reporters that due to export market demand A total of 91 factories have applied to suspend operations so far, affecting 61,500 workers.
Monica Jiang, deputy secretariat of the Garment Manufacturers Association of Cambodia (GMAC), said that foreign markets are facing difficulties due to the impact of the new coronavirus pneumonia epidemic. At the same time, about 70% of Cambodia’s clothing products exported to the EU and US markets are also affected.
He said that most factories in Cambodia have applied to suspend operations because buyers from the European Union, the United States and Canada are also affected by the new crown pneumonia epidemic.
“Buyers told us to suspend the supply of products and keep the produced products in factories. Garment factories in Myanmar, Bangladesh, Vietnam, Indonesia, and Laos are also facing the same problem.”
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He said that if we evaluate the market share of exports, the EU accounts for about 46% of total exports, the United States about 28%, and Canada about 8%. The total has exceeded 70%. Therefore, we are also greatly affected, and some factories will apply for shutdown in April.
Cambodia’s garment industry has been severely affected
Recently, Cambodia’s garment industry has been severely affected, causing many clothing brands to violate contracts and cancel previously placed orders, and reduce the forecast quantity of materials, causing garment factories and auxiliary material suppliers to face order cancellation dilemmas and semi-finished product cost issues. What’s even worse is that some buyers refuse to accept goods that have already been produced, and goods that are being produced also ask to stop production. This means that the factory immediately has no income. There is no ability to pay workers. Therefore, Cambodian garment manufacturers will call on buyers to receive the goods and pay in accordance with the contract.
The Garment Manufacturers Association of Cambodia (GMAC) stated in an open letter to all Cambodian textile buyers that the new coronavirus Covid 19 has brought chaos to our lives and businesses. Therefore, GMAC calls on all buyers of textiles from Cambodia to work together to tide over the difficulties together.
“All parties in the global apparel supply chain are feeling the heavy burden caused by COVID-19. However, factories are operating on slim margins compared to our customers (buyers) , are much less capable of bearing this burden. The burden of survival faced by our workers is huge and important. We call on companies to abide by the terms of the procurement contract and fulfill your obligations by picking up the goods on time and ensuring that production of goods and goods currently being produced. This will allow us to continue to provide jobs for our 750,000 workers and give us the ability to continue paying workers to ensure the livelihoods of millions of Cambodians.”
“We ask all buyers to assume corporate and social responsibility towards your suppliers and all workers in our factories. Let us work together and believe that we can overcome this crisis together. epidemic, and protect the livelihoods of workers and their families and ensure the survival of businesses.”</p
