By Tetsushi Sonobe, Keijiro Otsuka
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Extra info for Cluster-Based Industrial Development: A Comparative Study of Asia and Africa
They have only five to ten fabricating machines on average and hire workers from surrounding villages. These subcontractors receive putting-out orders from unregistered workshops. Sometimes they receive orders directly from registered companies in the busy season from March to September. Since their size is small, a subcontractor seldom receives putting-out orders from more than one workshop or company at a time. According to the leader of the village communist party, approximately 500–700 subcontractors in the village and 5,000 subcontractors in nearby villages are producing parts.
To our surprise, a large part of the payment is made only once, at the end of the year. While subcontractors are located both in and outside Laphu, unregistered workshops are all located within the village. There are three different marketing channels for unregistered workshops: receiving putting-out contracts from registered companies; selling to the domestic market; and selling to the foreign market. They produce final products if selling to the domestic and foreign market, while leaving the packing process to registered companies if they receive putting-out orders from them.
According to the leader of the village communist party, approximately 500–700 subcontractors in the village and 5,000 subcontractors in nearby villages are producing parts. These knitting subcontractors mainly use automatic knitting machines to produce parts for trousers, while those in the nearby villages use hand-driven machines to produce parts for sweaters, caps, and others. 4 It was not until 1995 that knitting spread from Laphu to the nearby villages. In 1995, some knitting households in Laphu began to sell their old machines to their workers from the nearby villages, allowing deferred payment.