As China’s foreign trade industry begins to enter a period of low-speed growth and China’s labor costs continue to rise, more and more textile and garment companies are investing and building factories overseas. When people once again focused on the open platform of “going global”, Hongdou Group joined hands with 3 Jiangsu companies and 1 Cambodian company to establish a special economic zone with a total area of 11.13 square kilometers in Sihanoukville Province, Cambodia – West Cambodia. Hanukkong Special Economic Zone (referred to as “Sihanouk Special Economic Zone”) is particularly dazzling. This is also an important stop for this home textile inspection team.
Why go to Sihanoukville?
As a pioneer in the “Belt and Road” initiative, Zhou Haijiang, president of Hongdou Group, which participated in the development of Sihanoukville Special Economic Zone, said: “Currently, there are more than 10,000 Cambodian employees employed in Sihanoukville Special Economic Zone, with an average monthly salary income of about 180 RMB. million US dollars, driving up Cambodia’s consumer market. At the same time, the development of Sihanoukville Special Economic Zone has also accelerated Cambodia’s industrialization process and promoted economic and technological cooperation between Chinese and Cambodian enterprises.” Due to the strategic location of Sihanoukville Special Economic Zone, sea, land and air transportation are convenient , up to now, 81 companies from China, Japan, France, the United States and other places have invested and settled in, 58 of which have been put into operation, with a number of employees reaching 12,000. The goal in 2015 is to exceed 100 companies in the next three years. , hoping to exceed 300 and solve the local employment problem of 80,000 to 100,000 people.
The garment industry is Cambodia’s largest export industry, employing about 600,000 workers, accounting for 80% of the country’s total exports, and contributing more than 15% to Cambodia’s GDP. The person in charge of the Sihanoukville Special Economic Zone said that the special zone will also gradually introduce more fabric processing and production enterprises to form a more complete textile industry chain and provide more services for enterprise production. For Hongdou, the company has gained a lot from participating in the development in the past few years. The company has made full use of the advantages of the platform to create a low-cost production chain. Zhou Haijiang said: “This is mainly because companies entering the Sihanoukville Special Economic Zone can enjoy many favorable conditions, such as 100% exemption from import tariffs on imported production equipment, building materials, spare parts and raw materials used for production, etc. for investment and construction of factories; Enterprises entering the zone can enjoy a tax holiday of profit tax for 6 to 9 years depending on the product type; product exports are exempt from export tax; industries that serve the export market, raw materials are exempt from value-added tax; industries that serve the domestic market, the value-added tax rate of raw materials is 10 % etc.”
As an economic and trade cooperation zone at an important node of the “One Belt, One Road” initiative, the Sihanoukville Special Economic Zone is of great significance as a demonstration and model. Today, the Sihanoukville Special Economic Zone is committed to building an international economic and trade zone cooperation model and building an investment and trade platform for global manufacturing companies to “invest in ASEAN and radiate the world.” Zhou Haijiang said: “In the future, the Sihanoukville Special Economic Zone will not only attract more competitive Chinese companies, but also introduce more global manufacturing companies, hoping to develop into a new local economic center in Cambodia as soon as possible.”
Avoid risks by relying on the platform
In interviews, many companies said that they also had the idea of ”going out” after seeing the fruitful results of leading companies’ “going out” and the better investment policies of Southeast Asian countries. However, how to take this step? There is always no idea about this threshold. Cambodia Mingyuan Home Textile Co., Ltd. is one of the enterprises settled in the Xigang Special Economic Zone. Chairman Chen Yizhong said frankly that going abroad is not as easy as imagined, and there are still many unforeseen “dangerous reefs”, such as social instability and investment There are risks in operating efficiency. Without a good platform advantage, there is no guarantee.
The person in charge of Sihanoukville Special Economic Zone in Cambodia fully agrees with this. Enterprises “going global” must be prepared to deal with risks. For example, the impact of local government elections on social stability and the risk of the continuation of local laws and regulations, the risk of workers’ strikes and demonstrations and workers’ compensation being higher than expected, the risks in the understanding and implementation of financial and tax systems under different national systems, The risk of high operating expenses and logistics costs caused by an incomplete industrial chain, as well as low labor efficiency, lack of technical talents, management and training issues for employees with different languages, cultures, and customs, etc., may become constraints on the development of enterprises overseas. Key factor.
It only took Mingyuan Home Textile Company more than 4 months from the launch of trial production and other preparatory work to the shipment of the first container product for export. This is extraordinary efficiency, regardless of product quality and delivery. The speed has been praised by customers. Chen Yizhong said that this is closely related to the sound supporting facilities and service functions of the Sihanoukville Special Economic Zone, which has virtually helped the company avoid many risks. Today, the company’s annual export sales exceed US$80 million, and its products are mainly sold to European and American markets.
Sun Shuang, general manager of AnTiao Consulting China, said: “The ‘going out’ of labor-intensive industries requires two factors: threshold and opportunity. In recent years, Vietnam, Cambodia, Indonesia, Sri Lanka and other countries have become key markets for enterprises to inspect. As far as textile companies are concerned, when choosing to invest or build factories in Southeast Asia, factors such as labor costs and taxes are all important items for companies to investigate. While companies are going out to explore, it is more important to integrate effective global resources, so companies choose There are many platforms for overseas investmentImportant, it can be said that this is the first step to success. ”
Why do textile companies choose Cambodian Special Economic Zones?
As China’s foreign trade industry begins to enter a period of low-speed growth and China’s labor costs continue to rise, more and more textile and garment companies are investing and building factories overseas…
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