Covid-19 brings chaos to textile industry
THE Garment Manufacturers Association in Cambodia (GMAC) on Tuesday urged factories not to suspend shipments of goods that have already been produced as well as those in production.
It said it was important for the Kingdom to maintain production and exports to sustain the industry during the Covid-19 pandemic.
The call from GMAC came after some key buyers from the US and Europe, such as H&M, Zara, Mango, Primark, Macy’s and J.C. Penney announced last week a halt to production since the pandemic has caused a decrease in global demand.
The GMAC said: “The current global pandemic of Covid19 has brought chaos to all our lives and businesses. To overcome this critical situation, GMAC appeals to all stakeholders to join hands so that we can survive together,” it said.
“To all the buyers, please don’t give up on Cambodia. We urge you to fulfil your existing contractual obligations by taking delivery of already produced goods and goods currently in production and pay under the regular terms. This will allow us to pay our workers and continue the work for them.
“To all factories, workers’ safety comes first! Please continue to stay vigilant and maintain high levels of hygiene as a preventive measure at the workplace in order to protect our workforce and help prevent the spread of the virus.
“Please ensure your workers understand and strictly follow the guidelines and regulations issued by our government.
“Together, we can surely overcome this pandemic, protect our lives and ensure the survival of our businesses.”
The GMAC also called on all Workers and Unions to have confidence in the preventive measures being implemented at the workplaces.
According to Sourcing Journal published on March 18, H&M, Zara, Mango, Primark, Macy’s and J.C. Penney are just some of the buyers which halted production, leaving vendors at a loss for next steps, and others in the supply chain at risk of losing their jobs.
According to Sourcing Journal, H&M announced on last Tuesday that it would temporarily close all its stores in the US and Germany, as well as all stores in Canada, Portugal and Belgium.
These closures followed the
retailer’s Monday announcement that all stores in Switzerland, Greece, Slovakia, Lithuania, Peru, Ukraine, the Philippines, Malaysia and Cyprus are now closed, too.
“At this point it is therefore,necessary to temporarily hold back on previously planned orders.
“Our long-term commitment to suppliers will remain intact, but in this extreme situation, we need to respond fast, together with our business partners, and make decisions that can be difficult in the short-term, but necessary in the long-term.
“We will start placing orders again as soon as the situation allows,” said their announcement as quoted in Source Journal.
GMAC secretary-general Ken Loo confirmed to The Post on Tuesday that presently, many buyers are suspending and cancelling orders and even refusing to take delivery of orders already produced or currently in production.
“In recent days, many buyers have started to enact drastic measures in response to the developments of the Covid-19 pandemic.
“These include immediate order cancellations and declining to accept delivery of orders currently in production and even those that have been produced but are yet to be shipped.
“This will severely impact the cash flow of factories as we will not be able to sell our products or receive payments or compensation for them.
“The most direct and immediate consequence is that factories will struggle to pay the wages of workers,” he said.
Currently, Cambodia has over 500 textile factories employing more than 700, 000 workers. Last year, the textile industry made up 70 per cent of the kingdoms’ total exports valued at $7.5 billion.