Kampuchea'S "Strike Storm" Suspends Confidence In Foreign Investment And Begins To Waver

< p > since December 2013, 5 major a href= "http://www.91se91.com/news/index_c.asp" > trade union organizations < /a > in Kampuchea have launched a small range of workers' strike activities, calling for a minimum monthly salary increase to $160.

Earlier this year, the strike intensified and demonstrations around the industrial park near Phnom Penh gradually evolved into violent clashes.

According to preliminary statistics, about 300 thousand of Kampuchea's clothing workers took part in the strike, and the industry suffered hundreds of millions of dollars in losses.

Although the strike has subsided and factory production has been resumed, this incident has made investors who want to or have pferred some of their capacity to Kampuchea begin to re-examine and measure the safety, productivity and profits of the investment area.

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< p > < strong > production and investment are hindered < /strong > < /p >

< p > as the general manager of Ningbo Dongfang Hongye import and Export Co. Ltd., Xu Jianchang spoke frankly about the impact of the strike on factory production. "Kampuchea's strike lasted more than ten days, causing our delivery date to be postponed for seven or eight days.

Although foreign businessmen are aware of this situation, the adverse effects can only be borne by our manufacturing enterprises.

Dongfang Hongye is located in Phnom Penh, Kampuchea. Its production scale accounts for 1/5 of the company's total production scale and employs approximately 800~1000 people.

During the workers' strike and demonstration, the normal production of the factory was forced to stop, which resulted in some orders being delayed and even disrupted subsequent logistics plans.

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< p > an industry pointed out that if the production line is cut down according to the usual situation of garment factories, the loss per day is 700~1000 dollars, while the general factories generally have 10 product lines.

A series of losses caused by strikes such as delayed delivery and impaired corporate reputation are even more difficult to estimate and make up for.

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< p > besides the impact of production, the tense labor relations in Kampuchea have adversely affected the attractiveness of the country's investment.

At the beginning of this year, a chief executive of a cotton spinning enterprise who had just returned from Kampuchea inspecting said: "in the capital Phnom Penh, the strike and demonstration of the workers are very intense. Even if this incident is calmed down, it is hard to ensure that such a situation will not happen again."

This situation worries many entrepreneurs who want to invest in factories in Cambodia.

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< p > clothing industry is a pillar industry in Kampuchea. Foreign investment also provides more employment opportunities for local garment industry and promotes its domestic economic development.

The strike has caused great harm to Kampuchea's economy. Foreign investors have also been struck by the confidence and trust of the government in maintaining stability and maintaining law and order.

KongAthit, chairman of the Kampuchea Garment Manufacturers Association, said that because of the strike, 5~7 foreign businesses postponed their visit to Kampuchea earlier this year.

According to preliminary estimates, the strike caused about $200 million in losses to the industry, and about $70 million in investment was postponed.

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< p > < strong > < a > href= > http://www.91se91.com/news/index_c.asp > cost advantage < /a > less stable production < /strong > /p >

< p > over the past few years, due to the generally rising cost of manufacturing in China, most garment brands began to pfer manufacturing plants to Southeast Asian countries such as Kampuchea and Bangladesh.

Although the clothing export of these countries has been increased, due to the imbalance of economic development, these countries have exposed problems such as backward infrastructure and hidden dangers in production safety.

At the end of 2012, Bangladesh continued to fire and collapsed buildings. The most serious one caused more than 1000 deaths. Up to now, nearly 200 people have been missing.

To improve the working environment and the treatment of workers, European and American apparel retailers have no choice but to express their willingness to raise their wages and improve their treatment. H&M and WAL-MART are willing to set up alliances to take relevant measures, which is a drag on the improvement of garment industry workers.

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< p > in order to take the lead in changing wages and salaries, in February 1, 2014, the minimum monthly salary and compulsory welfare policy in Kampuchea were put into effect.

According to this policy, the monthly wage of garment factories to workers can not be less than 100 US dollars, the monthly housing or pportation allowance should not be less than 7 US dollars, and the attendance award per month should not be less than 10 US dollars.

There is no doubt that this has aggravated the business burden of local enterprises and foreign garment enterprises.

What worries most entrepreneurs or entrepreneurs who want to invest is not just the rise in labor costs. The clothing workers' strike that has lasted nearly two weeks has caused losses to factory operators, but at the same time, let people reexamine Kampuchea's investment advantages again.

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< p > when it comes to the advantages and disadvantages of investing in Kampuchea, Xu Jianchang said that initially investing in Kampuchea was mainly optimistic about its tariff preferences for exporting to the European Union and other markets, but the efficiency of Kampuchea's labor force was relatively low and its unit capacity was only 1/2 in China.

"In addition to low efficiency, Kampuchea's labor costs continue to rise. Our enterprises can only alleviate the pressure by raising the prices of final products.

But more importantly, frequent strikes will hamper the normal production of factories, thereby affecting the credibility of enterprises' scheduled delivery. "

Xu Jianchang said.

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< p > < strong > < a > href= > http://www.91se91.com/news/index_c.asp > investment > /a > focus on comprehensive factors < /strong > /p >

< p > it is precisely considering that the efficiency of workers is a key factor for enterprises to make profits. In the new year, besides continuing to pay attention to the production situation in Kampuchea, Xu Jianchang also plans to set up factories in Burma, because the labor efficiency of the country is higher than that of Kampuchea.

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< p > in the process of enterprise's foreign investment, many industry experts suggest that enterprises should follow the "customized" line, that is, to find the investment location suitable for their own development, and to conduct a comprehensive assessment of the intention to invest.

As an operator of cluster investment and trade development platform, Dai Yuee, general manager of Sihanouk port Special Economic Zone Co., Ltd., is deeply impressed by this: "there are many factors that concern enterprises in the process of overseas investment, and the most important factor that should attract the attention of enterprises is the factors that have a significant impact on the profitability of enterprises.

For textile and garment enterprises, strikes will not only delay the production of enterprises, but also affect the subsequent orders of enterprises. "

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< p > according to Dai Yuee, the West Hong Kong Special Administrative Region is far from the political center, and the labor relations in the park are relatively stable.

During the strike in Phnom Penh, the production of the park was not affected and maintained normal operation.

This year, in order to provide convenience for enterprises in the park, the West Hong Kong Special Administrative Region also plans to launch "nanny" service.

"For example, factories that enter factories may lack workers like electricians and other technical workers.

Our park will strengthen staffing in this area, and businesses can solve problems quickly if they make a phone call.

Dai Yuee said that although these are minor tasks, an enterprise needs to consider the obstacles and challenges that may be encountered in the production and production in order to achieve the best interests in the pfer.

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