Western brands eye garment industry

Published on Monday, 21 January 2013 12:39

The garment industry is attracting greater interest from Western buyers who have been weighing the advantages of the country’s large and inexpensive labour force against the shortcomings of its infrastructure, industry representatives say.

At the same time, Chinese and Taiwanese manufacturers who had registered garment factories as domestic entities have submitted applications to the Directorate of Investment and Company Administration to re-register them, said Khaing Khaing Nwe of the Myanmar Garment and Textile Association.

Both the buyers and the manufacturers are expecting the industry to surge following the lifting of sanctions in export markets and because the easing of regulations on foreign investment is making it easier to set up shop here, industry representatives said.

Dr. Khin Maung Aye, managing director of Latt Wah Garment Factory, said there had been a surge in interest in the industry from potential foreign investors and buyers, including those from major markets in western countries, over the past year.

The European Union last September reinstated tax breaks for imports from Myanmar under its Generalised System of Preferences, or GSP system, which had been suspended since 1997. Industry representatives say there has been a rise in exports to the EU but did not provide figures.   
 
U.S. companies are in talks to place orders at garment factories, but none have yet signed contracts, an official at DICA said.

Garment factories are concentrated in industrial zones around Yangon. The minimum wage of about $40 per month is lower than those of export titans like Bangladesh, Vietnam and China, but access to electricity remains limited, with some industrial zones only offering electricity from 8am to 5pm.