Due to rising labor costs in the past few years, many domestic bosses set up granulation plants in Cambodia. However, in recent years, the phenomenon of factory closures in Cambodia has become more and more serious. According to statistics, a total of 54 factories closed down in 2017; a total of 35 factories closed down in 2018; so far, more than 70 factories have closed down in Cambodia this year, which has doubled compared with last year.
So, a best factory construction site that was once sought after globally, Why are factories now either closing down or fleeing?
The Ministry of Environment has begun to strictly control the import of waste
Cambodian Prime Minister Hun Sen It was stated at a cabinet meeting that Cambodia is not a dumping ground for foreign waste and will never allow the import of any kind of waste or other recyclables. A spokesman for the Cambodian Ministry of Environment pointed out that the Cambodian government opposes the import of garbage for recycling and reuse. The government has established a special committee to investigate how the above-mentioned containers entered Cambodia. He stressed that any individuals and companies involved in importing waste will be punished by law.
We all know that the reason for choosing Cambodia for granulation is its low cost of raw materials. Once the channels for importing waste materials are blocked, all investments will be in vain. !
The salary increase is so high that the boss wants to work!
There are several main reasons. First, the labor cost of factories has increased. At first, the reason why international companies chose to open factories in Cambodia was because they valued Cambodia’s cheap labor force. However, Now the salary has been increased to the point where the boss wants to work.
From 1997 to 2017, Cambodia’s minimum wage increased from US$40 to US$153 in 20 years, and rose to US$170 in 2018, which is significantly higher than other garment and shoe manufacturers. Competing export countries, such as Bangladesh, US$67, India, US$77-143, Myanmar, US$79, and Pakistan, US$134.
This year, the Cambodian Ministry of Labor promulgated new standards, and workers’ basic salary increased to US$182. With employee benefits, they can receive US$480 per month. If you make a preliminary calculation of this salary standard, you will find that it is basically the same as the salary of Chinese workers, and even the income of a Chinese college student when he first steps out of school.
In addition, starting from 2019, the factory needs to pay wages twice a month, in the second and fourth weeks of each month. This is very important for the factory. There is considerable pressure, because cash flow has a great impact on enterprises, and this regulation in Cambodia has intensified the cost expenditure of factories.
In addition, increasing wages without increasing productivity is also a problem, which means that work efficiency is very low. Under normal circumstances, the productivity of factories in Vietnam and Indonesia is about 80% of that of China, and the productivity of Cambodian garment factories is only 60% of that of China. This is why some Chinese companies feel that it is better to move their factories back to China.
Strike or faint at the slightest disagreement
What’s interesting is The productivity of workers in Southeast Asia is low, but their awareness of rights protection is particularly high. Although most strikes are caused by the escape of communist bosses, there are also frequent strikes demanding salary increases or benefits, and even factory relocations can trigger general strikes. .
The garment factory is one of the economic pillars of Cambodia. For this reason, Prime Minister Hun Sen once said when meeting with workers that we should not kill the goose to obtain the eggs. If the demands are too excessive, the factory will withdraw from Cambodia. , that’s like a chicken flying egg.
Cambodian workers may faint when they disagree with each other. Sometimes it is indeed caused by poor physical fitness, but some of the reasons for fainting are very funny, such as: being hit by a car The sound of exploding tires frightens you, you are fainted by chicken feces, you are fainted by the smell of gasoline, or after one worker faints, a large number of workers also fainted, etc. It is really a big world, and there are all kinds of surprises.
The country with the most public holidays in the world
In addition to human factors such as employees demanding salary increases, low production efficiency, strikes, etc., there is another ridiculous reason why investors cannot stand Cambodia: Cambodia is the country with the most recognized holidays in the world, with 28 public holidays. Days, almost a whole month. Take October this year as an example. October 8th to 10th is the Day of the Dead, October 15th is the Memorial Day for the Founding Fathers, October 23rd is the Paris Peace Agreement Memorial Day, October 29th is the King’s Accession Day, and then Including Sundays, it seems like a whole month of busy vacations. This is a good thing for workers, but it makes the boss cry without tears. </p
