Tack Fat Group International is aggressively expanding in Cambodia instead of China because it fears the United States will keep some quotas in place on mainland textiles and apparel after 2005. In that year, World Trade Organisation members are scheduled to drop their quotas on textiles and apparel. But a clause in China's WTO accession agreement allows the US to unilaterally re-impose quotas on mainland textiles for a one-year period between 2005 and 2008. The measure is to safeguard against a flood of mainland imports into the US market. 'In Cambodia, in 2005 textile quotas for the US will be abolished for sure. That is why we are expanding a lot in Cambodia instead of China,' said executive director Norman Ho Yik-kin. Tack Fat - which primarily makes swimwear and casual wear for clients such as Speedo, Wrangler and Gap - has earmarked most of its $60 million capital expenditure for the financial year to March to Cambodia. The company opened a new factory in the country last month and Mr Ho said it planned to hire 2,000 additional workers next year, bringing its headcount in Cambodia to 14,000. Last year, the company's swimwear production capacity in Cambodia tripled to 600,000 pieces per month. Most of Tack Fat's 15,000 workers are in Cambodia and the country accounts for about 60 per cent of its production capacity, with the remainder taken up by a factory in Guangdong. Mr Ho said Tack Fat set up its first factory in Cambodia in the early 1990s because there were no European quotas on apparel produced there, while quotas existed for mainland-produced apparel. North America accounts for 66 per cent of Tack Fat's turnover, while Europe accounts for 25 per cent.