Myanmar: apparel exports jump to 1 billion US dollars

Myanmar is boosting its efforts as a garment-producing and exporting nation, with its apparel export volume already reaching more than 1 billion US dollars this financial year (until November 11). This was confirmed by the country's ministry of commerce.

This indicates a year-on-year increase by 690 million US dollars or a jump of 145 percent. During the same period last year, the Southeast Asian nation exported clothing worth 408.4 million US dollars, according to the ministry's senior official Khin Maung Lwin.

Most of the Myanmar's 400 garment factories employing around 400,000 workers operate under cut-make-pack (CMP) systems or contracts, meaning the garments are cut according to the international buyer's specifications, sewn onsite and then packed, ready for export.

The most important market for garments exports is Japan for Myanmar, with 33 percent of all readymade garments going here. This is followed by the EU and South Korea (both 25 percent) and the US and China to some extent (both 2.4 percent), according to the Myanmar Garment Manufacturers Association (MGMA).

Apart from ongoing strong garment exports to Japan, it is an increase of orders from the EU, specifically Germany, that has boosted Myanmar's export volume. According to European Commission figures as quoted by Frontier Myanmar, exports to the EU rose from 345 million euros (367 million US dollars) in 2013 to 548 million euros (582 US dollars) in 2015.

While in 2001, the US still accounted for 65 percent of total garment exports valued at 817 million US dollars, this figure decreased drastically after the US imposed sanctions and took away trade privileges from Myanmar, which will be restored though through the US' Generalized System of Preferences for developing countries after a decision was taken to that effect in September.

MGMA chair U Myint Soe welcomes this development and told the Myanmar Times that he thinks it will make American garment buyers more confident about doing business with Myanmar. However, he cautions against expecting immediate benefits as garments are not among the US' 5,000 products on its GSP. However, “if we can get that kind of market back this time, garment exports will reach up to 3 billion US dollars in 2017,” he hopes.

China is still eyeing Myanmar as a low-cost garment hub, looking for alternatives to minimise production costs at home, including the relocation of production facilities to relatively accessible markets in Southeast Asia.

In August of this year, a book by two Swedish authors had accused two garment factories in Myanmar making clothes for H&M of employing workers as young as 14 and having their workers toil for long hours. An earlier Oxfam report titled 'Made in Myanmar' had similar claims, denouncing Myanmar's wages in particular, which are still among the lowest minimum wages in the world.

Photo: Young garment workers undergoing training; source: MGMA