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New textile industry zone planned for central Myanmar?

A textile and garment industry park is being mulled for Myanmar’s Mandalay region as part of a joint project with the Japan International Cooperation Agency (JICA).

According to local press, the announcement was made by U Zaw Myint Maung, the chief minister of the Mandalay region, on the sidelines of an EU-sponsored forum on the business climate in northern Myanmar. Discussions on the planned park are still at the early stages, but it will potentially employ around 50,000 people.

A spokesperson for SMART Myanmar, an EU-funded project that supports and promotes sustainable consumption and production of garments made in Myanmar, told just-style that central Myanmar, which comprises Mandalay and Yangon, are “traditionally the heart of textile production in the country.”

“From cotton farms to ginning facilities, spinning factories and fabric mills, the Mandalay region and surrounding areas are ripe for further economic development. Garment, textile and footwear investors continue to set-up within the wider Mandalay region, especially in Mandalay city but also in the nearby towns of Kyaukse, Meikthila and elsewhere. Altogether nearly 20,000 new garment, textile and footwear jobs have already been created in the Mandalay region over the past five years.

“SMART Myanmar has provided advisory and training support for four of the firms in Mandalay region on such topics as chemical management, waste management, energy efficiency and labour law compliance.”

The spokesperson adds that a key focus for investment in textile zones is on consistent and constant electricity supplies that comes from more sustainable sources such as solar thermal and solar PV energy, as well as centralised wastewater treatment.

The Southeast Asian country is one of the fastest-growing garment, footwear, and travel goods suppliers in the world, with apparel exports alone climbing from $2.7bn in 2017 to $3.86bn last year, according to the just-style strategic sourcing tool.

The European Union (EU) is its biggest market, with imports jumping 21.7% year-on-year to US$2.02bn from US$1.66bn, accounting for more than half of the country’s ready-made garment exports.

Apparel exports currently enjoy duty-free access to the European Union through the Everything But Arms agreement (EBA), Canada (through the General Preferential Tariff program), and Japan (through the Japan-ASEAN free trade agreement).

However, the European Union last October said it was considering steps to remove Myanmar’s duty-free Everything But Arms preferential trade access over the alleged ethnic cleansing of Rohingya refugees during a 2017 military campaign – a move that creates political uncertainty and potential risks and reputational issues for firms sourcing garments from Myanmar.

Source: Just-Style

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