Myanmar: apparel exports could reach 4 billion US dollars by 2020

Industry insiders expect that Myanmar's apparel exports could more than double to 4 billion US dollars by 2020 due to government policies furthering foreign direct investment (FDI), easing or elimination of economic sanctions by other countries and low labour costs.

Already, the country is seeing business from buyers who look for alternatives to its neighbours India and China as well as regional competitors Vietnam and South Korea (a similar movement can be seen in Sri Lanka). Those four countries are also interested in investing in Myanmar's garment industry to avail of lower labour costs and FDI by the US, EU and Japan.

According to the 2012 foreign investment law, companies can increase the maximum shareholding of foreign parties in manufacturing to 50 per cent, thus making the country a suitable apparel sourcing destination. Foreign investors are also allowed to lease land for an initial period of 50 years, can avail of tax exemptions for the first five years and enjoy the tariff-free import of raw materials.

Following the new law, Thailand's six largest garment manufacturers announced in March 2012 that they would move production to Myanmar to take advantage of lower labour costs, which is currently 3,600 Myanmar Kyat (around 2.80 US dollars) per day as of 1st September 2015.

According to figures by the Myanmar Garment Manufacturers Association (MGMA), the export volume for garments amounted to 1.46 billion US dollars in 2015 . The country's garment industry employs more than 250,000 people and accounts for 10 percent of total export revenues.

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