Garment exports have surged since the European Union admitted Myanmar into its generalised system of preferences last April, opening up European markets.
According to U Aung Myint, director of SMC garment manufacturing and member of the Myanmar Garment Manufacturers’ Association, Myanmar exported US$400 million worth of garments from May through July, on pace to surpass the $700 million it exported through all of the last financial year.
He said that the sudden rise in exports has also been fuelled by problems with the garment sector in competiting regional countries.
“Bangladesh, the leading country for garment manufacturing with more than $20 billion worth of exports, is now facing social compliance problems. In China, wages are rising. That’s what helped attract buyers to Myanmar,” he said.
But the boost has also brought drawbacks.
“Skilled labour and electricity are both in short supply. More and more garment industries are ready to come in, but transportation and documentation problems still hinder the sector in competing with countries like Cambodia,” said U Aung Myint.
Nevertheless, local factories are overbooked with orders as firms from countries like the US are waiting on more friendly trade agreements before deciding to do business in Myanmar, said U Moe Pwint, director of Hallmark Manufacturing.
“We don’t have a minimum-wage law. The influx of orders has led factories to stop accepting new orders and they’re struggling to finish their current orders on time,” he said.
“We have a full order-book and the potential for profit is good,” U Moe Pwint added.
Source: Myanmar Times