Myanmar has all of the characteristics to turn out to be a brand new hub for garment manufacturing. In fiscal yr 2015, Myanmar exported around 900 million dollars value of sewn products. This is barely about one-thirtieth of the quantity exported by Vietnam and one-sixth of the quantity exported by Cambodia. Export earnings from garment cutting, manufacturing and packaging are currently expected to succeed in $3 billion this yr.
Foreign garment manufacturers at the moment are flocking to Myanmar to reap the benefits of the low cost labor. The Myanmar Garment Manufacturers Association, which incorporates each domestic and foreign manufacturers, now has about 400 members, up about 100 since 2015.
However, labour costs within the Southeast Asian country are also starting to indicate an upward trend, with the primary statutory minimum wage introduced in 2015. Skill levels of employees have also improved significantly.
“We’ve seen productivity before [at the plant] “They were falling every time a new product was introduced,” said Takeshi Iguchi, head of the local unit of Japanese clothing retailer Honeys in Myanmar. “Now we can even do trench coats, which require the highest level of skill.”
In 2012, Honeys became the primary Japanese manufacturer to begin production in Myanmar. The company currently operates two plants within the country, producing about 18,000 garments per day, which accounts for 20-30% of the corporate’s domestic sales. Honeys is currently considering constructing a 3rd plant in Myanmar.
Lifting of economic sanctions
In 2003, the US, the most important apparel export market, imposed a complete ban on imports from Myanmar. Many European countries also took punitive measures against the military junta, stripping the country of its Generalized System of Preferences status.
For an extended time, Japan and South Korea were the one major markets for Myanmar’s exports.
A decade later, Europe reinstated Myanmar as a GSP beneficiary country in response to the country’s begin to democratize. Washington followed suit in October 2016, completely lifting sanctions against the country.
This has led to a rapid expansion of Chinese and South Korean contract garment manufacturers into Myanmar, with corporations comparable to Hennes & Mauritz and other major global brands beginning to visit the local market to seek out local contractors.
“Japan was once the most important market, nevertheless it has been overtaken by the European Union. Every month, 4 to 6 corporations spend money on the garment industry. The huge influx of investment is related to large orders,” said Soe Myint, chairwoman of the Myanmar Garment Entrepreneurs’ Association, Eleven Myanmar.
Last yr, export revenues amounted to $2.2 billion, exceeding estimates of $2 billion.
According to the Directorate of Investment and Company Administration, the Myanmar Investment Commission has approved many applications. Industry insiders say that document processing, customs clearance and licensing have been smoother than before.
Today thirty-three percent clothes exports go to Japan, 25% to the EU, especially Germany, 25% to South Korea, 2.4% to the US and about 2.4% to China.
