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Garment Makers To Focus On Domestic Market As Foreign Orders Slump

Source: Vientiane Times

The Lao garment industry is in a slump following a significant drop in orders from foreign countries due to the Covid-19 pandemic and must now rely on the domestic market to sustain its long-time workforce.

President of the Association for Lao Garment  Industry, Dr Xaybandith Rasphone, told  Vientiane Times on Wednesday when attending the opening of a health and safety training session that the garment industry was hit by the Covid-19 crisis almost as soon as it began.

“From April to June, a number of garment factories closed and only 12 to 15 have been able to  continue production. The closures have inevitably affected exports,” he said.

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Dr Xaybandith said the garment industry had earned over US$20 million in exports during the same period in previous years.

“This year, we do not see any possible hope of earning that kind of export value now that purchase orders from the European market have fallen so drastically,” he added.

He also said the Lao garment industry had undergone severe fluctuations since 2015 due to internal and external factors and many large-scale factories that once had a workforce of 5,000 to 6,000 were now only employing 1,000 to 2,000 people.

“After the Covid-19 crisis, the large garment factories cut their workforce to just 500-600 employees.

We are now worried about the future of those who have been working with us for many years,” he said.

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Dr Xaybandith said the association is seeking ways to negotiate with domestic buyers as well as encouraging local consumers to buy locally made clothing.

“The domestic market is the only alternative if we want to keep factory workers employed until the pandemic comes to an end and we start getting foreign orders again,” he added.

A worker at a Vientiane  garment factory, Ms Nang Thannapha, said she had been in the job for early seven years and some of her monthly wage went to support her family, who lived in another province.

“I can earn a good income in terms of salary and wages on a production basis and have been able to provide for myself and my family for many years. But when the Covid-19 crisis struck, purchase orders gradually dropped off. I think the pandemic could lead to unemployment sooner or later,” she said.

More than 50 garment factories in and around Vientiane are members of the Association for Lao Garment Industry. Some factories are solely owned by Lao business operators and foreign investors, including Japanese and Thai nationals.

About 99 percent of the  clothing produced in Laos is exported. Garment factories create thousands of jobs for  local people with over 90 percent of employees being female, recent data showed.