GMAC issues appeal letter requesting landlords to reduce rental fees by 30%

• 8 May 2020
• Property Focus
• 3276 Views

The Garment Manufacturers Association in Cambodia (GMAC) issued a formal letter on 08 May 2020 appealing to landlords who lease premises for all garment, footwear, and travel bag industries in Cambodia to reduce their rental fees by at least 30% for 3-6 months given the severe impact of COVID-19 on the sector.

In its appeal letter, GMAC stated that to date, 180 factories have suspended production due to the impact of COVID-19 on orders, with the sector expecting further exacerbated suffering.

Factories having suspended operations are reported as being unable to cover basic costs due to sharp declines in, cancellation of, and an absence of orders during the pandemic.

The same source also reported that a further 60 factories are also expected to suspend their production.

Amid these hardships, GMAC issued the appeal letter calling for landlords who leased their buildings and properties to those affected factories to help reduce their financial burden and to take part in restoring and promoting economic growth in the country.

The GMAC appeal takes inspiration from the quotes of Cambodian Prime Minister Samdech Hun Sen who said, “…Then renters should take care of their tenants as if one should take care of the hen so that she can hatch more eggs in the future,” when he called on the private sector to lower or delay payments for tenants on 30 March 2020 and again on 07 April 2020.

According to His Excellency Ith Sam Heng during a Press Conference on the Final Result of Work Performance in 2019 and Direction for 2020 on the morning of 19 February 2020, there are currently 1,200 registered garment and footwear factories that employ about 800,000 workers, more than 80% of whom are women. At the same time, the cost of workers’ compensation in this sector is more than US$2 billion each year, while the minimum wage for a worker is US$182 per person per month.

• Economy and Finance
• Policy and Strategy