Mill sews hope for textile industry

Content image - Phnom Penh Post
Workers at a factory in the capital’s Chaom Chao commune on April 19. Heng Chivoan

The continuous entry of fibre, yarn and thread mills into the Cambodian market is set to considerably lessen the textile-related sectors’ dependence on imports of raw materials, observers have said.

Newcomer Shun Wei Fang Zhi Ke Ji Co Ltd’s proposal for a $5.2 million fibre, yarn and thread mill in eastern Kampong Speu province has received the green light for a final registration certificate, the Council for the Development of Cambodia (CDC) said in an August 11 notice, adding that the project would create 226 jobs.

 

Of note, Shun Wei Fang Zhi Ke Ji is currently not listed on the Ministry of Commerce’s business registry. And according to the CDC, the project will be located on road Pr 130 between national roads 41 and 3 in Prey Khvav village, Roka Koh commune of northern Kong Pisei district.

According to the Ministry of Economy and Finance, textile raw material imports into Cambodia reached $20.1708 billion in 2019, up by 353 per cent from $4.4512 billion in 2008, before falling by 6.11 per cent to $18.9382 billion in 2020 as Covid-19 hit.

Cambodian Footwear Association president Ly Khun Thai confirmed to The Post on August 15 that the Kingdom imports large quantities of fibres, yarns and threads from China, Vietnam and Thailand. The amounts sourced domestically by the textile sector are miniscule, he said, adding that local manufacturers of these raw materials are also relatively small-scale.

Aside from reducing imports of raw materials, the addition of more fibre, yarn and thread mills will spur the economy and create jobs and skills for Cambodians, he propounded.

Such local mills “will also make it easier for factories that need threads – there’ll be no need to spend time buying overseas, they’ll save on shipping as well as on other costs”, he said, contending that the facilities would in turn attract more investment into the Cambodian garment, footwear and travel goods sector.

“Travel goods” is a designation that includes suitcases, backpacks, handbags, wallets and similar items.

 

Hong Vanak, an economics researcher at the Royal Academy of Cambodia (RAC), underscored the value of fibres, yarns and threads as raw materials for textile-linked industries, as well as the importance of the mills that produce them, commenting that the Kingdom has historically been heavily reliant on imports from China, a top cotton grower.

He said local mills would improve the sustainability of the Cambodian garment sector, and “cut down production costs to a certain extent, which will help to better compete in the international market”.

These facilities could also curb work-related migration and could draw in investment into the cultivation of plants used to make threads, he added.

Senior economist Ky Sereyvath, director-general of the Institute of China Studies at the RAC, lauded Shun Wei Fang Zhi Ke Ji’s project as a major step for the Cambodian garment sector, believing that more producers of textile raw materials would follow “in the near future”.

“Such investment will bring more value added to the Cambodian people as well as the Cambodian economy as a whole,” he asserted.

The garment, footwear and travel goods sector is the Kingdom’s largest foreign currency earner. As of last year, the sector comprised about 1,100 factories and branches with around 750,000 workers, according to the Ministry of Labour and Vocational Training.

The General Department of Customs and Excise reported that the Kingdom exported $6.6 billion worth of garments, footwear and travel goods in the first half of 2022, up by 40 per cent from the $4.72 million recorded in the same period last year.