Garment Sector Slow to Adopt New Technologies

A Tajima sales representative adjusts settings on one of the Japanese firm’s mass embroidery machines at Cambodia’s biggest annual textile industry event (KT Photo: Cecelia Marshall).

By Cecelia Marshall for The Khmer Times

PHNOM PENH (Khmer Times) – Industrial machine producers offering new technologies for Cambodia’s $5.5 billion garment and footwear industry received a lukewarm reception at last weekend’s major industry event. 

The 4th Annual Cambodia International Textile & Garment Industry Exhibition brought together 260 exhibitors from 21 countries, who displayed some of the latest and most advanced textile factory machinery. But factory owners and their representatives attending the annual trade fair showed cautious interest in the new machinery and technologies on offer, citing concerns over cost-efficiency and the Kingdom’s undeveloped infrastructure.

“I’ve only seen two or three interested buyers,” said Soe Moe, general manager of Gerber Technology, an American producer of commercial bulk automated cutting machines and apparel design software.

He was optimistic though, playing down the low foot traffic and at the fair, pointing out that Gerber already has machines in 60 local factories and is a recognized premium brand.

“As garment factories in Cambodia grow and increase production, demand (is growing) for automation,” he said.

Mr. Moe was demonstrating the Paragon Cutting System, the latest model of software-driven bulk cutters. The room-sized machine is capable of cutting layers of fabric up to 10 inches thick into perfectly-sized garment pieces suitable for machine or hand sewing. While the price tag on the machine, which can run up to $150,000 according to the model, is as formidable as its size, he said factories stand to recover costs in saved time and labor.

According to Mr. Moe, the automated bulk cutter can replace 10 factory laborers while increasing productivity by up to 30 percent. It also requires only one technician to operate, compared to four workers needed to manually design and mark patterns.

Companies like Bowker, a Hong Kong-based garment firm, claim the fully automated machine helped to reduce labor costs at its factory in Vietnam by 70 percent. Mr. Moe emphasizes that the bulk cutter is not only faster, its onboard processors are more accurate than human hands, reducing material costs.

“It completely erases human error from the process,” he told the Khmer Times.

Innovation Brings Value 

Cambodia’s garment and footwear industry accounts for 80 percent of total exports and was worth $5.5 billion last year. The sector comprises nearly 1,000 factories and employs about 500,000 workers, according to industry sources.

For factories, output information and data is critical to maintaining production levels and exports. Many new models on display at this years fair include an onboard computer that processes workflow and responds to issues such as fabric jams and misaligned patterns. Reports indicated the total cutting time versus idle time between jobs, and total units cut.

INA International Technology, a Singaporean enterprise that produces a computerized garment hanger system, hoped to convince local factory owners of the value of onboard processors. The company was exhibiting its EH6R-C, a hanger system that passes textile pieces from one part of the factory to the other.

The machine relies on intuitive software that allocates products into specific categories and compiles inventory information. This makes it easier to organize products within warehouses, increasing efficiency by reducing man hours.

“Owners of our technology find that it’s a valuable investment and increases production,” said Alan Wong, sales manager for INA International Technology.

While industry machinery producers stressed the importance of upgrades and innovation, garment factory owners attending the industry fair appeared content to stick with their existing equipment. Some expressed concern about cost recovery.

Heng Hour, owner of Health Source Garment Co., a local firm that manufactures ready-made clothing, said he did not attend this year’s industry fair as he could not justify the high cost of upgrading equipment. He said the 200 textile machines in his factory were adequate for his needs.

“I haven’t invested in new machines lately because the machines we have already work well and produce enough sufficiently,” he said.

Infrastructure Concerns

“We have enough machines to get production out and although maybe they’re not top of the line, they still work effectively,” he said.

One universal concern expressed by factory owners and machinery suppliers alike was the challenge of operating in Cambodia given its poorly developed infrastructure. Several industry players pointed to the Kingdom’s notoriously unreliable power network.

In many places, machinery comes to a grinding halt at least once a day when the power goes out, resulting in productivity losses. Cambodia loses about two percent of sales including exports due to electrical outages, according to a 2011 World Bank report.

“Electricity is a big risk here in Cambodia with cuts occurring at random,” said Gerber’s Mr. Soe. “With each machine sold, we urge customers to purchase a power stabilizer and USB memory drive in case of power cuts. If the machine shuts down, the USB will hold all of the garment patterns.”

Many factory owners rely on diesel backup generators to reduce their downtime. Only a small number have adopted innovative energy solutions, as evidenced by the conspicuous paucity of solar technology stalls in an exhibition hall packed with whirring industrial machinery.

Tucked away in a corner of the exhibition hall, Chinese firm Yuluxue was offering a line of solar water heating systems and PV panels to line factory roofs. The products reduce electricity usage and grid reliance, supplying backup power in the event of blackout, and quickly paying off their installation costs.

Yet Yuluxe has struggled to find a foothold in Cambodia. Zhu Xinyun, the company’s general manager, said it was his third time to exhibit at the annual fair, but he has been unable to find a local distributor for his products.

Cambodia’s inadequate road and rail network poses its own set of problems. Exhibitors said the poor condition of Cambodia’s 30,000-kilometer road network is a significant challenge to supplying garment factories with advanced machinery, particularly in rural areas.

The footprint of a typical bulk cutting machine is three meters wide by six meters in length. The flatbed truck that delivers them must often navigate past potholes, road works and flooded gravel tracks.

Cambodia’s undeveloped infrastructure is just one of the many push factors that could lead garment factory owners to set up shop in other countries, according to the “Cambodia Trade Integration Strategy 2013-2017,” an intergovernmental policy paper.

“Garment exports are part of a supply chain that requires speed and reliability in delivery. Cambodia’s logistics performance, while in line with countries like Laos, is still below major competitors such as Vietnam,” the report said.

Compete or Go

Although many local factory owners appeared content to stick with existing machinery, their competitors in Vietnam, Taiwan and Bangladesh are said to be increasing productivity and lowering overhead costs by upgrading to newer models. Meanwhile, Myanmar is projected to emerge within the next five years, challenging Cambodia’s position as a lower-cost garment producer.

The Kingdom does have its bright spots, however. Mr. Xinyun said garment producers are drawn to Cambodia’s supply of cheap labor and investment incentives, such as duty-free access to EU and key Asian markets.

The sector has witnessed strong and steady growth. If producers recognize innovation and technology as a way to increase sales – and the country can strengthen its infrastructure – this may just continue.


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