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TIMESBUSINESS
Garment sector plots bright
future, with Western help
April 29 - May 5, 2013
25
Domestic fashion
industry thriving
By Myat May Zin
By Soe Sandar Oo
THE lifting of European Union
sanctions on April 22 might
herald a bright future for
Myanmar’s garment sector
if the country can benefit
from the generalised system
of preference status, which
lowers import tariffs, in the EU
and United States.
U Myint Soe, chairman
of the Myanmar Garment
Manufacturers Association
(MGMA), said at the start of
a business matching event
between Myanmar and Hong
Kong garment and textile
industries on April 24 that
Myanmar might be granted
GSP status on June 4.
“EU sanctions were lifted
last Monday and hopefully we
will be granted GSP status
by the US on June 4,” he
told the 30 representatives at
the meeting, which was held
at the Union of Myanmar
Federation of Chambers of
Commerce and Industry. “This
is the huge opportunity for
international companies to
invest in Myanmar’s garment
sector.”
“If we can get GSP status
from the US it will mean we
can do more business with
international companies.
They will be able to invest in
Myanmar and be assured that
they can get access to the EU
and US markets,” he said.
U Myint Soe said
Myanmar’s garment sector
had many incentives for foreign
companies, including tax
breaks, cheap labour and an
attractive foreign investment
law. However, he said electricity
shortages in the hot months
were problematic but expected
the shortages would be solved
by the government, which is
working to ensure adequate
supplies.
Myanmar’s garment exports
hit a high of about US$826
million in 2001, just before
the United States announced
Workers stitch garments at a garment factory in Yangon last week. Pic: Aung Htay Hlaing
a ban on imports. But by
2012, the value of exports had
recovered to more than $900
million, with more than 75
percent shipped to Japan and
South Korea. Less than $200
million worth of goods were
sent to Europe.
U Aung Win, MGMA vice
chairman, told The Myanmar
Times: “We have continuously
made and exported garments
since 1993. We are waiting for
GSP status but we must also
ensure that our quality levels
meet the standards required
for those markets.”
He added that there are more
than 300 garment factories in
Myanmar.
Daw San San Myint,
deputy director of Myanmar
Investment Commission’s
Yangon branch, which opened
on April 10, said most of the
information requests handled
by the office since it was opened
have concerned the garment
sector. She added that 25 of
40 requests have been about
the sector.
“MIC has to explain to
investors about the foreign
investment law first, especially
equity ownership ratios, as
well as taxation,” she said.
“Companies from Singapore,
Hong Kong and Taiwan have
shown the greatest interest
so far but I think there might
be investments made from the
EU and possibly Canada too
if Myanmar is granted GSP
status,” she said.
Mr Lewis Leung, president
of Price Edward Road
Management in Hong Kong,
which operated garment
factories in Myanmar from
1995 to 2000, said Myanmar
could compete with Cambodia
and Bangladesh if it receives
GSP status.
“Myanmar can compete with
them but the profit won’t be as
high as in Bangladesh,” he said.
“I am interested in investing in
Bago Region because it is so
near to Yangon and has a large
available workforce,” he said.
He added that the quality of
Myanmar’s garments is good.
However, U Myint Soe
said companies would
need to increase their
awareness of international
standards, especially labour
rights and conditions. But
the MGMA, International
Labour Organisation and
labour activists would assist
companies in this effort.
He added that the average
wage for a garment worker is
about $100 a month.
U Myat Thin Aung,
chairman of the Hlaing
Tharyar Industrial Zone, said
many international companies
operate garment factories
in Thailand but might shift
production to Myanmar if it is
given GSP status.
“But we still need to solve the
electricity shortages and high
land prices,” he added.
MIC data shows that
most garment production
in Myanmar – about 60pc
– is cutting, manufacturing
and processing work, which
provides quick profits to
operators but does not help the
nation to build a manufacturing
base since all raw materials are
imported from abroad.
UNDAUNTED by the former sanctions regime,
Myanmar’s home-grown garment industry is
thriving, industry experts say. They attribute the
success to the industry’s ability to cater to local
tastes.
Over the past five years, local garment brands
have been taking over more space because of their
competitive price and good quality, some say. Unlike
export-oriented businesses, they can employ and
pay staff year-round without the need to wait for
orders from overseas.
“We can pay the same wages throughout the year,
without night-work and overtime, because we are
operating the factory regularly. We know the tastes
of Myanmar women and what kind of designs they
prefer. Normally we copy the designs from Thai
garments,” said Daw Sein Lae Lae, owner of Dear
Brand garment factory in Shwe Pyi Thar township.
The factory has more than 400 workers.
“Garments produced for the local market create
much less stress for our workers than garments
meant for export. Sometimes factories producing
for export have to pay penalties for not meeting
requirements. We can do our best for our own brand.
If we don’t maintain our quality, customers will
choose another brand,” she said.
“We import the raw materials for our product from
China, especially Shanghai. Power cuts here push
up the production cost. But I have to look after my
workers even when profits dip,” she said.
She added that it is rare for local factories to
employ their own designers. Instead, they copy
Chinese or Thai designs and modify them for local
preferences.
“We do face a problem of design copy from
competitors, and from China,” said Daw Phyu Phyu
Sein, owner of Spike garment factory, which employs
more than 1500 workers.
“When our new design creates a lot of demand,
copies come on to the market within weeks. We
have our own designer, who designs for the whole
country. Some factories produce garments only for
one city, and some are oriented towards other states
and regions.
“We intend our designs to be suitable for women
of all ages. We sell more than 20,000 products for a
single design, and every month we produce many
different types. So far we are only producing for the
domestic market, but we aim to extend overseas
as well, including to Malaysia and other countries,
although we may have to adjust our design for the
overseas markets,” she said.
There are also many small- and medium-sized
garment businesses; some do not even have factories
and outsource the work to larger producers but use
their own designs. One such brand is Dancer, which
targets the middle class with designs that change
every season, said its owner, Ma Nilar.
“We have no factory but produce our own designs
and cut the finished goods. We work closely with
other small clothing businesses,” she said.