Myanmar: The first International Garment and Textile Expo 2017 (GAR-TEX) for Myanmar is launched to meet the needs of enterprises who want to catch up the opportunities of emerging Myanmar market in Garment and Textile industry, which will open up in March, with more than 80 exhibitors from India, Thailand, Malaysia, Singapore, Bangladesh, Pakistan, Italy, Switzerland and Turkey, including more than 3000 professional trade visitors. However, no Myanmar local companies have yet signed up to take part in the expo.
At a preparatory meeting for GAR-TEX 2017, U Aung Myo Hein, central executive committee member of Myanmar Garment Manufacturers’ Association said that about 180 factories had been playing catch-up on social compliance measures since 2013.
Since then, more than 200 FDI garment and textile factories have opened. Local factories did not really start compliance measures until 2015. Myanmar is at the infant stage and they are moving forward at their own pace, and change takes time.
Myanmar is following the global trend toward social compliance, said U Aung Myo Hein. But it’s not because of international pressure. In the past, there was no requirement for social compliance. When sanctions were applied in 2004, it was a struggle even to survive. When the sanctions were lifted, they could not just launch social compliance measures straight away. They need government support.
According to data released by the Ministry of Commerce’s Special Trade Promotion Department, garment export volume for fiscal year 2016-17 as of October was US$940 million, up from $847.74 at this time the previous year.
According to the MGMA, there 389 garment factories employing about 400,000 workers, up from 155 factories in 2010, with 94,700 employees. The top export market, ever since 2004, is Japan with 33pc. The EU and Korea each account for 25pc of exports, and the United States and China 2.4pc each.
MGMA predicts 2016-17 earnings will reach $2.2 billion, compared to the $1.8 billion earned in 2015-16. Exports to EU countries increased by nearly 40pc since the EU lifted sanctions, and the EU is tipped to overtake Korea this year.
MGMA CEC member U Tun Tun said that Myanmar should adopt the freight-on-board (FOB) system, where local factories – in addition to producing garments – would develop their own styles, source their own fabrics and be responsible for shipping. At present most factories operate under the Cut-Make-Trim system, where they are only responsible for cutting the fabric, making the garment and packaging. But there are difficulties in shifting to FOB.
Since the introduction of the minimum wage, it’s hard to predict where they are going to be in the future. But if the government could provide other social benefits, the minimum wage amount would be less important. Exercising control over commodity price rises could also be a solution.
U Aung Myo Hein said that they welcome the minimum wage, and labour unions as well. But there has to be a balance.They can arrive at solutions through negotiation when a conflict of interests occurs. Companies are willing to catch up with social compliance, but the presence of labour unions makes the factories go faster.
The Garment and Textile Expo 2017 promises great chances for business cooperation, networking, potential market entry, as well as for exchanging useful information and innovative ideas will open from March 29 to 31, 2017 at Rose Garden Hotel, Yangon, Myanmar.