A new bulletin on Cambodia’s garment and footwear sector issued by International Labour Organisation (ILO) has emphasised that footwear has more potential in terms of offering new opportunities for investment and production compared to garment and textiles.
Country’s footwear sector’s share in total GTF (garment, textile, footwear) export value has grown by 4.4 percentage points between 2013 and 2018, while for garment, the share went down by almost 10 percentage points. As compared to 2010, footwear’s share in Cambodia’ total exports doubled from 5.4 percent to 11.1 percent in 2018.
Majority of the footwear are exported to the EU (46%), the US (17%), and Japan (12%). Within the EU, it is the UK, Germany, and France that import the most footwear from Cambodia. The EU and the US will remain very important export destinations for Cambodia due to current tariff exemptions, and based on interviews, workers and managers in the Kingdom seem confident in the footwear sector’s future profits and orders, highlighted the ILO bulletin.
In terms of monthly wages, Cambodia’s main competitors are
Cambodia’s main competitors in footwear production in Southeast Asia are Vietnam and Indonesia which have monthly wages of US $ 171-180 and US $ 193 – 272, respectively. While Cambodia has a monthly wage of US $ 182.
Global footwear production mainly takes place in Asia – China (38%), Vietnam (9%), and the EU (7%). In Europe, major footwear production countries are Italy, Germany, and Belgium. Cambodia and Turkey have seen the strongest growth rates in terms of export value growth in 2016-17.
Collective Union of Movement of Workers president Pav Sina said that keeping the EU’s “Everything But Arms” (EBA) trade preferences would further boost the sector. “However, uncertainty surrounding EBA could impede footwear investors from investing in the Kingdom,” he added.
Image Source: https://www.straitstimes.com