New Myanmar textile association to boost garment makers
Manufacturers are being encouraged to move from CMP to FOB (Photo credit: Myanmar Garment Manufacturers Association)
A Myanmar Textiles Manufacturers Association has finally been launched, following years of discussion about creating an upstream textile-specific body in this fast developing southeast Asian country.
Finished garment exports from Myanmar have more than doubled from 2011-12 to 2014-15, from US$497m to US$1.02bn according to statistics from the country's Central Statistical Organisation (CSO). Yet the local textile industry has not kept up, with backward linkages remaining weak.
A previous military-backed socialist government – whose non-socialist successor handed over power to the current National League for Democracy government in March – tried to move into commercial production of textiles, setting up several textile factories with at best mixed success.
Industry insiders say building a robust domestic textile industry has been a long time coming.
"Forming a textile association has been talked about for years, even a decade," says Myanmar Garment Manufacturers Association (MGMA) general secretary Daw Khine Khine Nwe.
Growing a domestic textile industry has numerous advantages for garment producers. Currently, Myanmar clothing manufacturers import textiles from a number of countries, such as China, Singapore, Taiwan and Thailand. However, China generally predominates as the source for price-competitive textiles, and Thailand for higher-quality products, she says.
Almost all of the fibres used by the Myanmar textile industry need to be imported as natural fibre production in the country is small and there is no production of man-made fibres.
"As the quality rises for our domestic textile production, we will use them for our exported products," she adds.
Current textile exports are limited as they fall in niche markets, such as silk for export to Japan and South Korea, and it will take time before mass export of commercial textiles begins.
While Myanmar's textiles can potentially be exported on their own merits, they could also be used domestically as a substitute for imports.
And this could help Myanmar tackle its wide and growing trade gap, at about US$4.1bn on around US$29.1bn in total trade for 2014-15, according to CSO data. Making increased use of domestically produced textiles in exported garments would reduce the trade deficit while providing positive economic spinoffs in Myanmar.
Textile production in the country may have a long way to go, but Daw Khine Khine Nwe says garment manufacturers would like to see the domestic textile industry grow. "We are like brothers and sisters…we want them to grow up, independently," she explains.
Separately, local news reports suggest arrangements are underway to set up special textile and garment zones to produce raw materials and finished products in a single location.
The moves tally with the Myanmar government's strategy for the textile and garment industry as part of a document entitled National Export Strategy 2015-2019, which wants to encourage manufacturers to move from operating on a cut, make and package (CMP) basis to operating on an FOB (free on board) basis.
The Ministry of Industry has also agreed a three-year-project with the Korea Apparel Testing Research Institute (KATRI) to help improve Myanmar's garment industry to enter the international market.
South Korea and China are the largest foreign investors in the sector. However, a report published earlier this year found excessive working hours, incorrect pay, trade union discrimination, sexual harassment, and unsafe working environments are just some of the issues uncovered in a number of Korean-owned garment factories in Myanmar.
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