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Myanmar’s apparel factories facing closure due to Coronavirus impact

Myanmar Garment Manufacturers Association (MGMA) informed that Myanmar’s garment factories are facing the risk of shutdown as the coronavirus in China has blocked imports of raw materials.

90 percent of raw materials are imported from China and the rest from Indonesia, Vietnam, Thailand and South Korea for the garment industry which largely uses a cut-make-package (CMP) model.

“We have problems as 90 percent of raw materials come from China. We are waiting for the day when the Chinese side will resume operations,” a garment manufacturer said to a newspaper.

Figure: Myanmar’s garment factories are facing the risk of shutdown as the coronavirus in China has restricted imports of raw materials.

Representatives from the Commerce Ministry and the MGMA met last week to address the issue, but no solution was found. The majority of clothing factories have stopped running overtime due to dwindling stocks.

Normally clothing factories run 10 hours on weekdays, which includes two hours of overtime, as well as overtime on weekends, however, many factories are closing on weekends and not running overtime on weekdays.

As a first step, the working hours are being reduced. Next, there will be redundancies. And then the factories will have to close temporarily. If the situation still doesn’t improve, there will be permanent shutdowns. This is the way it should be done,” the manufacturer said.

Some still have stocks and others have already run out. It appears that those who still have stocks will not survive through March. Factories that have run out of stocks will have to close, according to MGMA.

Meanwhile, the overland exports of melons, live cattle and marine products to China have virtually ceased.

U Nanda, Director of the Trade Department on the Muse border, said, “China has imposed restrictions due to the coronavirus outbreak. It informed us on Feb. 13 that the customs office in Ruili had reopened and trade recovered a little.

“Although some factories have reopened, many staff are not yet back at work and some factories remain closed. As a result, the trade does not gather momentum.”

According to the Commerce Ministry. The export value of garments from Oct. 1 to the end of January was over US$1.6 billion (2.3 trillion kyats).

The number of deaths from the coronavirus outbreak in mainland China rose by 136, pushing the nationwide death toll to 2,004, according to last week’s data. There are over 70,000 confirmed cases across the country.

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