Bag firm plans to grow local operations
Bag firm plans to grow local operations
Wah Sun Handbags International Holding unveiled plans yesterday to expand its Cambodia operations, citing the country’s low labour costs as the primary reason for the move.
In a filing on the Hong Kong Stock Exchange, the handbag manufacturer announced plans to raise up to $18 million from an initial public offering, 45 percent of which would be used to fund several new projects in the Kingdom.
The plans include new construction, the establishment of a product development team and upgrades to the firm’s existing systems and showrooms.
In the statement, the company said that its interest in Cambodia was due to the relatively low labour costs, particularly in comparison to China, where the average monthly salary for workers in the handbag original equipment manufacturing industry is nearly three times as high as the minimum wage in Cambodia.
“It is expected that more non-leather handbag factories will move from other countries to Cambodia in the future,” the statement reads.
Seang Thay, a spokesman for the Ministry of Commerce, yesterday welcomed the expansion of Wah Sun’s operations in Cambodia and said that he expected the industry to attract more investors in the future.
“After receiving duty-free export [rights] for goods shipped to the US market, we have seen a significant increase in exports of these products,” he said, referring to the mid-2016 expansion of the Generalised System of Preferences (GSP). The GSP expansion allowed all “travel goods”, which includes luggage, backpacks, handbags and wallets, to access the US market duty-free.
Wah Sun’s major customers are multinational fashion brands, including Aldo Group and Nine West Holdings, which are headquartered primarily in western countries.
The brand’s Cambodian factory was established in Kampong Speu province in 2013 and currently employs about 4,500 workers.
