Cambodia’s multi-billion-dollar garment industry is at risk of chain disruption from the deadly coronavirus, its strongman premier said Monday, as the outbreak cripples Southeast Asia’s key industries, bringing border trade to a trickle.
Labor Ministry spokesman Heng Sour told reporters (Reuters) about 10 factories with about 3,000 workers have already notified the government that they will partially suspend operations.
“From predictions as well as an actual survey about the impact of coronavirus, we know that in March nearly 200 factories will face a lack of raw materials and it will affect about 110,000 workers,” Heng Sour said.
The death toll from the virus, which emerged from Wuhan in central China, has reached over 3,000 worldwide — the bulk of the fatalities in the mainland.
Beijing issued unprecedented lockdowns for cities and provinces most affected, bringing to a shuddering halt the so-called “Factory of the World” — key to a global supply chain.
The coronavirus has “shaken the global economy”, said Cambodia’s strongman premier Hun Sen Monday.
Cambodia is already feeling the sting with its $7 billion dollar garment sector reliant on China for 60 percent of its raw materials.
Last week, the labour ministry announced 10 factories had downsized their production lines, leaving 3,000 workers out of work.
But the full impact of the coronavirus is expected to hit in March, when nearly 200 factories are expected to run out of their reserve inventory of materials.
This could spell doom for 160,000 workers and employees — more than 20 percent of the sector’s 700,000-strong workforce.
Hun Sen said he had asked China to send materials urgently in order to avoid suspending workers.
A labour ministry official told AFP Monday the country is expected to receive “some” by the end of March, though it would not meet its full demand.
Garment worker Pann Sokchea, who toils in Phnom Penh’s manufacturing district, fears cuts to her crucial overtime pay.
“Factories no longer have cloth coming in, so workers are concerned about their jobs,” she told AFP.
Neighbouring Vietnam also stands to lose as much as $2 billion dollars if China-sourced materials are delayed for another fortnight, Le Tien Truong, director general of garment corporation Vinatex, told state-run media.
Like Cambodia, the country’s industry is reliant on China for 60 percent of fabrics to fuel its clothing production lines according to the Vietnam Textile and Apparel Association (VITAS).
So far, its garment exports dropped 1.7 percent to $4.5 billion dollars in the first two months of this year.
But exporters of finished products to China are also feeling the heat as container trucks slow to a crawl at the border.
In northern Lang Son, rows of trucks wait hours — or even days — to bring their goods through the main international crossing.
A shortage of Chinese labour means unloading operations, previously completed in just over an hour, can now take an entire day.
Meanwhile, fruits and vegetables languish in over-heated trucks as drivers dressed in protective suits periodically check their freshness.
“I’ve been here for four days,” driver Le Thanh Duy, who was transporting dragonfruit, told AFP.