Cambodian Textiles & Garment Industry

Transcription

1 PHNOM PENH SECURITIES PLC. No. 32, Monivong Bld, Phnom Penh, Cambodia Tel: Fax: Website: In this Paper: Executive Summary Page 01 Overview Cambodia Economy and Garment Industry Page 02 Garment in Detail Page 02 Trend Of Foreign Direct Investment Page 02 s for Cambodian Textile & Garment Products Page 03 in Garment Industries in Cambodia Page 04 Cambodia garment s position in the global competition Page 05 EXECUTIVE SUMMARY Since the Cambodia government took various measures to boost the industry competitiveness in the world markets, as well as the low cost labor, preferential market access in terms of duty and quota free access to the US and EU markets, and locational proximity to ASEAN market, Cambodia become one of the fastest growing garment exporters in the world. According to the figure from U.S. Commercial Department and National Statistic of EU showed that from 2009 to 2012, Cambodia gradually managed to increase its shares in EU and US exports from 1% to 2% and 3.5% to 4.4% respectively. Meanwhile, the textile and garment exports accounted for $4,259 million, approximately 77% of total merchandise export in 2012 (NBC annual report 2012). 05 July P a g e

2 OVERVIEW CAMBODIA ECONOMY AND GARMENT INDUSTRY Since 2004, garments, construction, agriculture, and tourism have driven Cambodia's growth. GDP climbed up gradually year-over-year, exempt 2009 had a decline due to the impact from global financial crisis. However, GDP reached $8,284 million, up 6.34% in 2012 (figure 1). In addition, According to the Ministry of Economic and Finance, the garment sector contributed with a growth of around 9.2% while the rise of agricultural production was 4.3% and construction sector 6% in The garment industry currently employs about 400,000 people, in which more than 90% are woman and accounts for about 70% to 80% of Cambodia's total exports. Indeed, Cambodia s textile exports in 2012 increased $357 million, 9% up from 2011 (NBC annual report 2012). However, Due to lack of domestic supporting industry, most garment manufacturers in Cambodia import their input materials from abroad, particularly from China, Hong Kong and Taiwan. Figure 1: Cambodia GDP ( ) Cambodia has a well growth on GDP and reached 6.34% last year; while garment sector contributed around 9.2%. 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Cambodia GDP 6.34% 6.02% 5.00% 3.71% 3.68% 3.43% 0.09% Source: Ministry Of Commerce GARMENT INDUSTRY IN DETAIL Trend of Investment in Garment Sector in Cambodia Figure below shows the total foreign director investment and investment in textile and garment sector during 2008 to The foreign direct investment wavered in 2009 due to the effects of the global economic crisis (2009: 5.3% of GDP), but recovered again in The net foreign direct investment (FDI) inflows into Cambodia surged by an estimated 75% in 2012, to $1.5 billion, in various industries as well as diversifying garment production into highervalue products and tourism into new areas. In addition, Cambodia s economic growth is forecast at 7.2% in 2013, picking up to 7.5% next year as recovery in Europe and the United States takes hold (ADB s annual economic outlook). 05 July P a g e

3 Figure 2: Inflow of FDI during 2008 to 2011 (Value in million US) FDI Inflow ( ) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Source: IMF $902 $815 $783 $539 $254 $168 $103 $ FDI Inflow Textile and Garment s for Cambodian Textiles & Garment Products The United States is the prime market for Cambodian garment products, stayed 45% of total export in 2012, and followed by European (33%), Canada (9%) and Japan market (3%) (See Figure 5). The total export to the US increased year-on-year, however, in 2012 there was a slightly decrease to about US$1.99 billion, around 3% compared to the same period in previous year. Moreover, garment export to European market had increase by 24% to US$1.45 billion in 2012 due to Everything But Arms initiative, which is the new GSP granted by European Union to LDCs (see Figure 4). Last year in addition, Canada and other markets imported Cambodian garment-product which grew year-on-year by 7% and 21% respectively. Yet, during the first three months of 2013, the product of garment export still stayed in a decline stage by 92% lower from the same period of 2012, in which USA, EU, Canada, and Japan accounted for 28%, 37%, 29%, and 48% respectively. Figure 3: Cambodia total export of Garment and textile to various markets (Value in million US) Cambodia garment exports rose to about $4 billion in U.S. and EU are the primary market with a market share of 45% and 33% respectively USA EU Canada Japan Other Source: GMAC 05 July P a g e

4 Figure 4: of Cambodian Textiles & Garment Products in 2012 of Garment Product, % 10% 9% 33% 45% USA EU Canada Japan Other Source: GMAC in Garment Industry in Cambodia Cambodia s policy of promoting the garment industry by offering favorable investment conditions and tax incentives has served as a catalyst in fostering the sector s development. As illustd in Figure 5 below, the number of factories increased from 247 in 2005 to 360 in The number of workers employed in the industry, this rose from some 283,906 in 2005, to 400,000 (estimate) in Figure 5: Number of Garment Factories and Workers Number of factories worker number (Value in Thousand) Source: GMAC 05 July P a g e

5 .. Industrial Report CAMBODIA GARMENT S POSITION IN THE GLOBAL COMPETITION United State and European Union were the major destination of Cambodia garment product, presented by 45% and 33% respectively. According to the statistic from the U.S. Commercial Department showed that, after global financial crisis in 2009, US have launched money easy policies to booth the economy, and as a result the Apparel retail market in U.S. performed well during The apparel imported in 2012 declined slightly only 1% (figure 6). China, Vietnam and Bengal were the major importers with a market share of 41.7%, 9.1% and 6.4% respectively. Meanwhile, Cambodia s garment product contributed 4.4% in the U.S. market ranking as No. 8 of apparel importer in Moreover, Cambodia garment product had growth gradually from 3.5% in 2009 to 4.4% last year of market share. Compared to the slightly negative growth of United States in 2011, the European debt crisis significantly affected the consumer market in Europe. In 2012 EU imports of appeared sharp decline of 11% (Figure 7), while the garment product of China declined as much as 18%. In general, the EU imports of apparel cost is lower than the U.S., so the volume of imports from Bangladesh and Cambodia have thriving, especially in Cambodia, with exports to the EU due to free Tax advantages, grew 20% in 2012, climbed from ranking No. 11 in 2011 to the No. 8 in Figure 6: & Rate of Garment Imported in U.S. ( ) Cambodia had achieved to reach No.8 as major garment importer both U.S. and EU. (Import) Rank as share in China 40.50% 11% 42.00% 20% 40.80% -6% 41.70% 1% 2 Vietnam 7.60% 6% 8% 19% 8.40% 5% 9.10% 7% 3 Bengal 6.50% -4% 6.50% 16% 6.50% -4% 6.40% -1% 8 Cambodia 3.50% -15% 3.80% 26% 4.30% 10.00% 4.40% 0% Total Import -6% 16% -4% -1% Source: U.S. Commercial Department 05 July P a g e

6 Figure 7: & Rate of Garment Imported in EU ( ) (Import) Rank as share in China 50.70% -4% 51.20% 3% 51.30% 2% 46.30% -18% 2 Bengal 13.60% 0% 14% 4% 14.60% 6% 17.20% 3% 3 Turkey 9.00% -8% 9.10% 3% 8.40% -6% 9.50% -3%. 8 Cambodia 1.00% -2% 1.00% -4% 1.40% 2.00% 2.00% 20%. Total Import -7% 2% 2% -11% Source: National Statistic of EU 05 July P a g e

7 Contact PHNOM PENH SECURITIES PLC. No. 32, Monivong Blvd, Phnom Penh, Cambodia Tel: Fax: Website: Disclaimer Copyright Phnom Penh Securities Plc. All rights reserved. The information contained herein, including any expression of opinion, is based upon sources carefully considered and believed to be reliable at the time of publication, but their accuracy and completeness are not guaranteed. Opinions, estimates, and projections expressed in this document are fair and reasonable in the circumstances prevailing at the time, but are subject to change without notice. The use of this document shall be solely risk of the users. Directors, associates, employees and affiliates of PPS accept no liability for any damage caused by using this paper. This document may not be copied, reproduced, published or redistributed by any person for any purpose without the express consent of an authorized representative of PPS. Please cite sources when quoting. 05 July P a g e