Source: Kiripost
A second factory in Poipet SEZ border was forced to shut down due to falling orders and disrupted supply chains caused by the prolonged Cambodia–Thailand border closure
A Thai-owned garment factory in the Poipet O'Neang Special Economic Zone (SEZ) has suspended operations, leaving over 2,500 workers jobless, as prolonged border closure and falling orders disrupted production.
According to minutes of a meeting between the Labour and Vocational Training Ministry, Hi-Tech Apparel (Cambodia), and union representatives, the company manager, Thitipong Wongsayang, said the decision was driven by economic problems, and difficulties transporting raw materials and finished products.
“The company experienced no further orders from brand owners, which led the company to decide to suspend production until August 30, 2026,” he said, adding that they would pay termination benefits, including seniority payments for the first half of 2026, in accordance with the labour law.
The company also agreed to continue the benefits for female workers, including National Social Security Fund (NSSF) contributions for pregnant workers until their delivery, 50 percent of their wages during 90 days of maternity leave, and a monthly allowance of $5 for workers with children aged between 18 and 36 months.
Keo Channet, 40, deputy president of the Hi-Tech Apparel workers' union, told Kiripost that the suspension effectively means the company is closing its Cambodia operation.
She said the factory had struggled when the Cambodia-Thailand border conflict escalated. "Since the border conflict, the production dropped," she said. "Raw materials have had to be transported through Sihanoukville."
Channet, who has worked for eight years with the company, said they were informed by the management previously that the company was struggling with financial losses and planned to stop operating in Cambodia and shift production to Vietnam and Laos.
Hi-Tech Apparel manufactures sportswear, activewear and performance knitwear for international brands, including Nike. The company operates factories in Thailand, Vietnam, Laos and Egypt. Its Cambodia operation is now suspended.
This is the second factory in the Poipet O'Neang SEZ to cease operations this year after Chinese-owned ML Intimate Apparel which shut down on April 27 due to falling orders and the protracted border closure, leaving about 700 workers unemployed.
Khun Tharo, programme manager at CENTRAL, said factory closures threaten workers' livelihoods as well as reflects the growing economic impact of the border dispute. He said border restrictions have disrupted imports of raw materials and increased transportation costs, forcing manufacturers to reroute shipments.
"The border closure continues to affect other Japanese factories located along the Cambodia-Thailand border," Tharo said.
Kiripost has reached Nike, one of Hi-Tech’s brand customers, for comment.
Sun Mesa, spokesperson for the Ministry of Labour and Vocational Training, told Kiripost that the company and workers had agreed to the compensation package.
"Although opening and closing factories is a natural process of business, the Ministry of Labour really doesn't want to see that," he said, adding that opportunities would be created for employees to find new jobs and improve their livelihood.
Workers have started receiving their compensation from July 21, with payments transferred to their bank accounts within 48 hours of signing the agreement.
Although Cambodia and Thailand have been managing border crossings for decades despite intermittent tensions, diplomatic ties have downgraded since July 2025 with deadly border clashes erupting twice.
On April 28, tensions rose again as Thailand unilaterally scrapped the 2001 MoU on maritime overlapping claims, with Thai Prime Minister Anutin Charnvirakul declaring "no progress after 25 years” with regard to discussions on the maritime situation.
In turn, Cambodia initiated compulsory conciliation under the United Nations Convention on the Law of the Sea (UNCLOS). On July 20, Thailand accused Cambodia of "closing the door" to land border talks when it began the UNCLOS procedure.
According to the General Department of Customs and Excise, Cambodia-Thailand bilateral trade totalled $1.37 billion in the first six months of 2026, down 37.5 percent from the same period last year.
Cambodia exported $357 million worth of goods to Thailand, down 20.3 percent from the first half of 2025, while imports from Thailand fell 41.9 percent to $1.01 billion.
The ASEAN+3 Macroeconomic Research Office (AMRO) warned that the border conflict and closures could seriously weaken Cambodia’s economic growth in 2026 by disrupting major sectors, trade, labor migration, tourism, agriculture, and investor confidence.