Cambodia diversifying into non-garment industry

Cambodia has been diversifying into the industrial sector from garment manufacturing to non-garment manufacturing, using skilled labour and technology in the production chains.

The garment manufacturing industry still has a large domain in the Kingdom’s industrial sector, but non-garment manufacturing has been booming rapidly in recent years, said Hem Vanndy, Minister of Industry, Science, Technology and Innovation.

In recent years, Cambodia has diversified, upgrading simple garment products to value-added garment products and famous brand outfits and attracting a number of skilled labour manufacturing factories like electronic components and vehicle assembly factories, Vanndy said during a press meet on Friday.

“This is a good sign, reflecting that we do not depend on the garment sector solely, but we have non-garment manufacturing factories such as manufacturing of furniture, electronic devices and others,” the minister added.

Cambodia exported $11.12 billion worth of garment, footwear and travel products to international markets in 2023, a decrease of 12 percent from $12.68 billion in the year before, according to a General Department of Customs and Excise report.

The decrease in Cambodia’s exports of garment, footwear and travel goods in 2023 was said mainly due to a slowdown in the economy in the main markets such as the US, Europe and the UK, according to the Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC, former GMAC).

The sector currently consists of roughly 1,300 factories and branches, employing nearly 900,000 workers, mostly female, according to TAFTAC.

However, the exports of non-garment manufacturing products, including electrical machinery and equipment, rose by 56 percent to $3,131 million last year, from $1,998 recorded in 2022, read the report.

According to the Industry Ministry, some 2,000 industrial factories registered at the ministry with a total investment capital of nearly $18 billion as of January of this year.

The registered factories employ more than 1 million local people.

The ministry has been boosted for scaling up local raw materials and finished products to supply industrial production chains, contributing to reducing raw material imports, Vandy said.

“Supplying raw materials from local sources will not only reduce dependence on imports but also generate value-added price to products, particularly attracting investors who wish to invest in Cambodia and use sources of raw materials for their production from local sources,” he said.

Source: Khmer Times