1) How does the Cambodia Footwear Association work to promote the interests of factories in Cambodia?
Every month, the CFA holds one to two regular seminars with the MOL, the GDT, Customs, the CDC, MOC, MOE, and other departments to discuss the latest regulations or inquiries from our members.
We also cooperate with associate members to promote their services which include consultancies, logistics services, and construction services. We have promoted Chip Mong Ecocycle, Huawei services with solar developers, and OJI Packaging services for package solutions. In addition, we connect international footwear buyers to our members.
Internally, three times per year, the CFA holds networking events for members to build relationships with factories in addition to occasional gatherings. If members have any inquiries and would like to learn from other factories, the CFA can coordinate and invite relative parties/factories to joint meetings.
We regularly visit our members’ factories to observe their current conditions and operational challenges.
2) Exports are on the rise, what has contributed to this trend and how can the industry sustain this momentum?
Each country has their own industry association, like the CFA, and we all play a role in assisting investors and buyers to develop their business. During the first half of this year, we were in good condition with exports growing 33% compared to the previous year. Due to Covid, some buyers have started diversifying production to different countries.
Cambodia is an ideal location, not far from China, and connected by land to Vietnam and Thailand. This has helped Cambodia’s position as an exporter. There were some western buyers that approached the CFA to help source manufacturing. Once China relaxes its quarantine policy, we expect much more buyers and investors to investigate the environment here in Cambodia.
3) What are the biggest threats to the industry?
Manpower and labour costs represent threats. Given the US’s Generalized System of Preferences, there are much more manufacturing and industries joining and expanding production. With a population of only 1.7 million in Cambodia, there is a limitation on manpower. Meanwhile, labour costs are also one of the key points when comparing to neighbouring countries.
The main export market is western countries and the current global economic condition is also one of our concerns. Per our internal survey, over 70% of factories have downward-trending order forecasts, with an average drop of 35% in Q2-Q4, 2022.
4) Which countries import the most footwear from Cambodia? Which countries could start to import more in the next five years?
Before 2019, it was the EU that imported the most. Now it is the US followed by the EU, the United Kingdom, and Japan.
5) How are sustainability initiatives changing the landscape of the footwear industry?
Most factories can comply with buyer requirements to upgrade their facilities and improve working environments.
From the CFA’s standpoint, we are also glad to promote good practices that can improve the environment in Cambodia, such as Chip Mong Ecocycle and the ISC (Institute of Sustainable Communities).
