Go where you have a competitive edge
But Kang Nam-shik, 67, made a different choice. He didn’t choose between the given options and decided to walk away from Pisa altogether. He went to find a world with straight towers. He entered the sewing industry four decades ago in 1973. “The sewing companies were thriving at the time. College graduates wanted to work for newspapers, deep-sea fishery and the sewing industry.” He joined the trading section of the Dongbang Industrial. After accumulating sufficient knowledge, he started his own company, Neungrim Trading, in 1983.
But the golden days were short. A few years later, the sewing industry went downhill. In 1989, he couldn’t even get financing from banks. The government was streamlining industries and stopped issuing additional loans to textile and sewing industries. His colleagues and partners started electronics companies, but not many were successful. In 1993, Neungrim filed for bankruptcy. Kang did not want to do anything else. Why would he have to change his career when he knows what he is good at? So he moved abroad, from Bangladesh to Thailand to Malaysia. “The sewing industry is necessary. Someone has to make clothes somewhere, and sewing has just lost its competitive edge in Korea.
In 1997, he chose to live in Toul Kork, Cambodia. “In July, that year, a civil war broke out and Hun Sen came into power. A poor country under a powerful dictatorship is the best condition for the sewing industry.” To ease citizens’ dissatisfaction, the leader needed to make sure they didn’t starve. So opening the market was a natural choice. Just as Kang had predicted, Hun Sen was eager to invite foreign investors. The corporate tax was exempt for three years minimum and as long as nine years. The income tax is very low, with 20 percent for the highest bracket. The production cost for each piece of garment at Kang’s company is 70 cents, and the company produces $12 million worth of apparel mostly for J.C. Penney and Wal-Mart. This month, the minimum wage went up to $81 per month, but Kang has no intention to relocate elsewhere.
“Today, trading is a war of speed. Low wage is not everything. We have to complete delivery within two, three months from the order. That means we must have quality logistics and labor. Myanmar is emerging as a new manufacturer, but it would take at least five years for Myanmar to develop like Cambodia and more than a decade for Africa.”
So his business may continue to thrive for at least 10 years. “Then, I will be 80. I started as an employee and have my own business until now, so I am very satisfied with my career. My secret is to bring my caliber to the place where I have competitive edge - without trying to fit into the given condition.”
*The author is an editorial writer of the JoongAng Ilbo.
by Yi Jung-jae