What Is The Cause Of The Difficulties In The Textile And Garment Factories Of Southeast Asia?

With the rise of China's manpower and prices, many enterprises have chosen to invest and build factories in Southeast Asia.

Nowadays, Kampuchea and Vietnam in Southeast Asia have become the "foundries" of many international brands. Clothing, shoemaking and other labor-intensive industries have become their main industries. For example, clothing manufacturing is one of the pillar industries in Kampuchea.

But over the past few years, many factories have been struggling and even collapsed in Southeast Asia.

Why is that?

1, the cost of building factories in Southeast Asia is soaring.

According to statistics, there were 34 new factories in Kampuchea in 2016, but more than 70 factories closed down.

In 2017, 15 new businesses were opened, and 54 were closed down.

The owner of the bankrupt factory told the truth that he did not make money, even if he invested in factories in Kampuchea, and related taxes and related tax concessions.

However, the wages of workers in Southeast Asia have been rising. This year, the minimum wage in Kampuchea has risen to $170. The quality of local workers is generally not high, and the production efficiency is not high. It is necessary to increase investment in management and training.

A factory operator in Vietnam said that the production efficiency of domestic factories was about 2.5 times that of overseas factories, which almost completely eliminated the labor cost advantage of individual workers.

In the context of rising wages, labor productivity has not improved significantly, and some small and medium-sized enterprises which are not competitive will be eliminated.

In fact, the manufacturing advantages of the Kampuchea plant are not much larger than that of China.

What really makes the enterprises feel real is Kampuchea's export preferences to some countries.

2, the supply chain of Southeast Asia is incomplete.

Labor-intensive industries are located at the bottom of the industrial chain and rely on the meager profits generated by orders.

In addition to the cost of labor and the cost of logistics and raw materials, enterprises will also be affected by the low level of production in Southeast Asia. A lot of raw materials will be pported from China, which will also increase the input costs of enterprises.

The manufacturing sector is closely linked. Factories are built in Southeast Asia. They lack materials and spare parts, but also go back to domestic procurement.

According to data from the Ministry of Commerce of Kampuchea, the export volume of clothing and textile materials in Kampuchea increased by 17.5% from January to March this year, amounting to 1 billion 340 million US dollars.

At the same time, Kampuchea spent 753 million dollars on it.

Imports of raw materials increased by 18.3%.

The cost of raw materials is high.

Imperfect infrastructure is also an important factor that restricts the development of many local enterprises, and this effect is continuous.

Transportation infrastructure is backward, pportation is inconvenient, lack of industrial support, and local hydropower infrastructure remain to be perfected, all of which pose a great threat to many small and medium enterprises with low compressive capacity.

3, workers' rights protection activities are frequent, affecting the normal production of factories.

In Southeast Asian countries, workers are highly aware of their rights and frequent strikes.

Last year, Kampuchea workers kept asking for a rise in wages, which resulted in a series of mass protests. These phenomena prevented the major brands from placing orders. Because of the decline or even shortage of orders, many local factories were forced to stop production or even go bankrupt.

At that time, half of the 247 member enterprises of the Kampuchea clothing production association were unable to get enough orders, and in the next few months, they were faced with underemployment and production equipment would be idle.

4, the problem of corruption.

In Southeast Asian countries such as Kampuchea and Vietnam, corruption has always been a major problem that restricts economic development.

The corruption of the government system will affect every aspect of the social life.

It also has a great impact on the development of enterprises.

In the year when our manufacturing industry was strong, there were many enterprising workers leaving the state-owned enterprises and starting their own businesses.

In fact, China is the largest emerging country in the world.

Chinese workers are hardworking, hardworking and willing to do business. They can not simply weigh the market with their wages, but also consider all aspects.