Logo of Phnom Penh Post newspaper Phnom Penh Post - Lao garment industry continues to face challenges

Lao garment industry continues to face challenges

Content image - Phnom Penh Post
Association of the Lao Garment Industry president Xaybandith Rasphone speaks of the association’s ongoing hurdles at its eighth general assembly in Vientiane last week. VIENTIANE TIMES

Lao garment industry continues to face challenges

VIENTIANE TIMES/ANN: Local clothing manufacturers are encountering ongoing hurdles to survive and thrive, according to the Association of the Lao Garment Industry.

Customers want quality products and the manufacturers hold little power to bargain as their costs rise while the prices received remain constant, the association’s president Xaybandith Rasphone pointed out at the eighth general assembly of the association in Vientiane last week.

Shortage of skilled labour is a chronic problem in the sector resulting in the reduction of garment exports, he said, adding there was little balance between labour and the orders.

However, the association will strive to expand the garment sector by cooperating with the relevant departments of the government and boosting exchanges with garment entrepreneurs in the region.

Advantageous position

The local industry is in an advantageous position in terms of investment and marketing compared to some Asean countries such as Vietnam, Cambodia and Myanmar, the association reported.

The Vietnamese government has ordered a stop to the expansion of its garment industry and shifted investment to the technology sector, while Myanmar has a problem with high electricity tariffs.

In 2015, Laos had 92 garment factories with just 78 now remaining. Seven of these are owned by Lao business people, seven are joint ventures and the remainder are owned by overseas interests.

The Japanese are large investors in the garment sector, followed by Thai nationals. Currently, a total of 50 factories are members of the association with 40 manufacturing exclusively for export and six catering to the domestic market as well as exports.

Those factories employed 26,000 people at the beginning of this year with women comprising 90 per cent of the workforce and 0.5 per cent foreigners.

Most of the foreign employees are in the administration and technical divisions, especially those from Thailand, Japan, China, the Philippines and Sri Lanka.

Laos’ garment exports hit $174.23 million in 2016, down by 7.25 per cent compared to 2014.

The main export markets are the EU, Japan, the US and Canada.

Korean, Chinese, Australian and New Zealand markets are still small despite Laos receiving trade preference as compared to China and the Asean market.

Laos is unable to compete due to a lack of raw materials within the country and the high transportation costs with no direct sea routes.

At the meeting, members of the association also selected a new board.

The ceremony was attended by Lao National Chamber of Commerce and Industry vice president Daovone Phachanthavong and Department of Industry and Handicraft director-general Manohack Rasachack.

MOST VIEWED

  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Bosba: The first Khmer woman composer from UK’s Cambridge

    Bosba Panh is just 25 years old, but she’s already accomplished some impressive milestones for herself and the Kingdom. On July 24, she graduated with a Master’s degree from the University of Cambridge as the first Khmer woman composer and Khmer music graduate ever at

  • ‘Golden’ Angkor Wat likely due to natural phenomenon: ANA

    Pictures and video clips of the Angkor Wat temple, its spires seemingly coated in gold, have been shared tens of thousands of times on social media, prompting a sense of wonder among those who have seen them. Hong Sam Ath, who took the pictures and

  • Pailin longan winery tries to break through to the big time

    Longan aren’t quite as glamorous as some fruits. They don’t have the star-power of mangos or generate the excitement of a pricey seasonal niche fruit like the pungent durian. Unlike bananas or oranges, which are known and loved everywhere, longan remains a decidedly

  • Debt restructuring over, time to tackle rising NPL ratio

    The Cambodian banking system has just completed a 26-month debt restructuring exercise where scores of loan accounts were revised, classified and provisioned as the rate of non-performing loans inched up, sparking a slight credit risk unease Implemented in April 2020, the Covid-19 debt restructuring measures came

  • Koh Slaket studio resort brings culture with style

    Davitra (Cambodia) Co Ltd’s multi-million-dollar 13ha Koh Slaket studio-cum-resort just east of the capital was inaugurated in the first phase on August 6, providing national and international tourists with a new travel option and job opportunities for locals. The man-made cultural and scenic lakefront getaway