Garment sector to hit $1.5b revenue mark

Revenues in the garment sector are expected to grow by as much as 50 percent for the 2013-14 fiscal year and reach US$1.5 billion, experts said.

Daw Khaing Khaing Nwe, secretary of the Myanmar Garment Manufacturers’ Association, told The Myanmar Times that the sector has continued to benefit from relaxed trade rules from abroad, while the country has seen a distinct uptick in foreign interest in the sector.

“After we officially got GSP [Generalised System of Preferences] status from the EU in mid-2013, exports began to substantially increase,’’ she said.

With revenues growing and international brands such as Tesco, UK-based Dewhirst and US apparel giant Gap Inc looking to invest in Myanmar in the near future, growth would likely continue in the coming years, she said.

“This will give the local garment industry the ability to develop even further,” she said. “[Representatives from US-based retailer] Guess came to speak with me just this morning.”

Before the US and the EU imposed sanctions during military rule, the Myanmar garment industry earned more than $800 million from exports, with the figure increasing to just over $1 billion in 2013 after sanctions were lifted. With a US GSP yet to be reinstated, however, exports to the US remain small.

Still, the number of garment factories has grown to more than 200, up from 181 in November 2012, according to MGMA data.

Nevertheless, the sector has been plagued by a number of issues including labour shortages, logistics, infrastructure and electricity supply problems continue to hamper profits.

“We’ve started providing training and we’re planning to launch mobile training sessions and encouraging owners to start in-house training in their factories,” Daw Khaing Khaing Nwe said.

Daw Aye Aye Han, managing director of Shweyi Zabe garment factory in Shwe Pyi Thar township, Yangon, said that additional problems have also arisen with the tide of new investment, including inadequate sewing fees being offered by European companies, while other foreign retailers have been reluctant to follow through investment promises.

“Only 30 percent of the EU businesses that have discussed working with local factories have actually worked with us,” she said. “Most EU businesses are still offering the same prices they paid before sanctions. In their countries, prices have not increased much over the past decade, but in Myanmar prices are increasing all the time. So are wages.”

She said that with the expansion of factories also comes a growing need for workers, a need that has grown from 80,000 to about 250,000 over the past three or four years.

Source: Myanmar Times

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