Low cost production has drawn foreign buyer’s attention to Myanmar apparel industry

Akhi Akter       
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Textile and apparel industry of Myanmar began in ancient period, which have been playing a vital role in the country’s economy, especially its garment industry has great potential to contribute to the national economic growth as an enormous employment giver and one of the biggest export earner. Export of the garment sector was recorded US$1.8 billion in FY2016-2017, which accounted 16 percent of total exports. When the government of Myanmar enacted the Foreign Investment law in November 1988, it allowed foreign companies to start doing business in the country. This was the key drive for the development of the modern garment industry in Myanmar.

Figure: Myanmar to become one of the important garment manufacturers in the world.
Figure: Myanmar to become one of the important garment manufacturers in the world.

The garment industry of Myanmar was getting remarkable growth for more than one decade and especially it started when the military-backed civilian government former President TheinSein effectively helped the country re-establish it’s once damaged ties with the US and the EU. He set the country on a course of valiant political and economic reforms in 2012. In the face of strengthened sanctions in early 2010’s, the TheinSein government introduced a shift in economic policy to put a much better emphasis on the promotion of industrial development to diversify the country’s economy and that time labor-intensive industries, including garment manufacturing, were highlighted as a key area of focus. And so, foreign direct investment (FDI) in the garment industry has been growing at an impressive pace in recent years and, following the removal of some sanctions, clothing exports from Myanmar increased by 26.5 percent in 2013 and by a further 27.4 percent in 2014. The first western brand was H&M that sourced from Myanmar in 2013 followed by Gap in 2014.

On the other hand, a turning point came on March 30, 2016 when Myanmar’s first civilian president in 50 years HtinKyaw sworn in as the leader of country under the advisory of democratic leader Aung San SuuKyi. A report, from the global business information company Textiles Intelligence, predicted that there could be up to 1.5 million jobs in the garment industry by 2020 compared with approximately 230,000 in mid-2015, and that garment exports could rise from $1.5 million in 2014 to as much as $12 billion in 2020.

Positive export growth prevailing

Myanmar is an emerging country in the world for readymade garment products. Now, there are over 400 garment factories in Myanmar, with a labor force of more than 300,000 workers. Many foreign companies entering its garment industry either through 100% FDIs or JVs like Costic International Co., Ltd, Honeys Garment Industry Ltd, Nadia Pacific Apparel Co Ltd, Manufacturer GFT Enterprise Co Ltd, JS Filter Co Ltd, Eurogate Sportswear Ltd, THY Garment Co Ltd, ShinsungTongsang Inter Co Ltd, Korea Link Industrial Co Ltd & Mac Do Co Ltd. These factories are mainly located in Yangon region and the industrial zones of Bago and Ayeyawady regions. Myanmar garments are mainly exported to the EU, Japan and South Korea.

According to the figure 1, during the TheinSein government, Myanmar’s garment exports experienced substantial growth. Based on WTO data, Myanmar’s total export value of garments reached US$986 million (8.9% of the economy’s merchandise exports) in 2014, nearly triple that of the 2010 level (US$337 million or 3.9% of the economy’s total merchandise exports). According to the MGMA, garment exports jumped to US$1460 million in 2015 and accounted for 10% of the country’s export revenues. Garment exports recorded US$1800 million in FY2016-2017, according to the Commerce Ministry.

Figure 1: Showing the significant growth of Myanmar’s apparel export from 2010 to 2016. (Source: Ministry of Textiles, Myanmar)
Figure 1: Showing the significant growth of Myanmar’s apparel export from 2010 to 2016. (Source: Ministry of Textiles, Myanmar)

The country’s export-oriented garment industry mostly depended on Korea and Japan. In 2014, Japan and Korea were Myanmar’s major export destinations, accounting for 38% and 31% respectively of its total garment exports. On the other hand, the EU has become an important driver of garment export growth for Myanmar as in 2014, the EU took a 23% share of Myanmar’s total garment exports. Local garment production is exported 2.4 percent to the US and 2.4 per cent to China.

Myanmar’s textiles and clothing import and export 2016

Myanmar exports to the world not only garments, it also exports textile fibers and fabrics. At the same time, it imports huge amount of textile and clothing including fibers from many countries to fulfill its domestic demand and to produce apparel products for exporting. Total import of textile and clothing including fibers is more than half of its export, which shows it is highly dependent on import.

10-year strategy for garment industry

Myanmar’s garment industry is focused on cutting, making and packing (CMP) system that is a basic contract garment assembly system that allows international garment companies to reduce their labor costs. Myanmar labor leaders and policymakers are trying to shift the domestic garment industry into a more value-added “free on board” system that puts international garment manufactures in charge of not only cutting and assembling garments but also of sourcing materials and shipping finished projects. Brands and primary suppliers have indicated that a US$8-10 billion industry could be achieved by 2020employing up to 1-1.5 million workers.  To achieve this, the strategic plan was developed through a series of workshops, which included the Myanmar Garment Manufacturers’ Association (MGMA), brands and suppliers with facilitation support from Pyoe Pin and the International Labour Organization (ILO) plus Coats plc and the Business Innovation Facility (BIF).

To carry the vision forward a set of six strategic objectives have been developed:

  • Improve the competitive advantage of the Myanmar garment industry
  • Ensure that full social compliance and social dialogue is practiced at all levels of the industry
  • Ensure that full social compliance and social dialogue is practiced at all levels of the industry
  • To build the image, position and brand of the Myanmar garment industry
  • To inform policy change which improves the enabling environment for positive sustain able growth of the textile and garment sector
  • Increase the service potential of trade associations

“We are not able to export our products with the Free-On-Board (FOB) system. Presently, we are trying to get tax exemption for the FOB system. We are discussing this with the US Government to get some tax relief on the products exported with the CMP system because the garment industry was not included in the reinstatement of the Generalized Scheme of Preferences (GSP),” stated U MyintSoe, Chairman, MGEA.


Myanmar is gradually establishing itself as an important garment-manufacturing hub. The ongoing quest for low cost production has drawn foreign buyers’ attention to the clothing industry in Myanmar. The apparel and textile sectors also attract foreign investment significantly. However, to develop a sustainable and stable garment and textile industry, it needs more focus on the sectors as still it imports huge amount of textiles and apparel to accomplish its domestic needs.  U MyintSoe, Chairman Myanmar Garment Manufacturers Association, recently said, “Myanmar has a large, low-skilled, available workforce and factory owners keen to adopt new, ethical, and sustainable, ways of working. There is a wealth of potential and a strong will to embrace best practice in the work place. Although there is a gap between the current situation and the imagined future, with a properly structured timetable of improvements and a well thought out infrastructure of support – both technical and financial – there is no reason this could not become a future reality from which all interested parties would profit”.

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