The BGA Cambodia Team, led by Managing Director Bora Chhay, wrote an update to clients on Cambodia’s new road map to overhaul its textile and apparel industry. and complement the Cambodia Garment, Footwear and Travel Goods (GFT) Sector Development Strategy 2022-2027.

Context

  • Cambodia launched a new road map March 17 to revamp its textile and apparel industry, a major economic pillar that accounts for more than a third of the country’s gross domestic product. The Industrial Transformation Map for the Textile and Apparel Industry 2023-2027 aims to transform and shift more of the country’s skill-based technology resources to build a globally competitive and sustainable industry.
  • The road map will attract more investment to help implement the Cambodia Garment, Footwear and Travel Goods (GFT) Sector Development Strategy 2022-2027, which aims to make the sector environmentally sustainable, resilient and high value to drive Cambodia’s economic diversification and competitiveness.

Significance

  • The garment, footwear and travel goods industry generated 57 percent of Cambodia’s total exports last year. It was worth $12.6 billion in 2022 and increased 14.9 percent from $11 billion the previous year. Globally, Cambodia is the ninth-largest exporter of garment, footwear and travel goods, accounting for 1.3 percent in 2021.
  • The new road map for textiles and apparel includes provisions to help manufacturers meet the Ministry of Labor and Vocational Training’s new industry requirements. It outlines strategic measures; assigns responsibilities to various ministries and government organizations; and includes sections on international trade, skills and productivity, technology and sustainability and infrastructure and governance.

Implications

  • The road map seeks to upgrade Cambodia’s apparel production models, diversify raw material sourcing, broaden exports to other markets and boost skill development and productivity. It incentivizes research and development and technology adoption; promotes investment in technology and infrastructure; upholds environmental, social and governance standards; and elevates Cambodia’s place in the textile and apparel value chains.
  • Businesses should watch for new opportunities to emerge from Cambodia’s shift toward higher-value textiles and apparel. The transition from simple cut, make, trim designs to more complex products that align with consumer trends will require investments in modern technology, technology transfers and skills training. In time, Cambodia’s textile and apparel industry is expected to create more jobs, boost economic growth and improve livelihoods.

We will continue to keep you updated on developments in Cambodia as they occur. If you have any comments or questions, please contact BGA Cambodia Managing Director Bora Chhay at bchhay@bowergroupasia.com.

Best regards,

BGA Cambodia Team

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Managing Director

Bora leads BGA’s practice in Cambodia. He is a highly regarded government affairs and public policy expert who helps clients resolve business issues, navigate regulatory and legal challenges, expand operations, explore new investment opportunities and enter Cambodia’s market.  Prior to joining BGA, Bora served for five years as a fast-moving consumer goods (FMCG) corporate and regulatory affairs professional. In this role, he helped transform his company’s government relations and corporate affairs unit into a more effective business-driven group. Notwithstanding Cambodia’s difficult and highly regulated macro environment, Bora played a key role in developing and executing government relations and corporate affairs ... Read More