Virus outbreak could impact Myanmar garment factories by March

The Myanmar Garment Manufacturers Association (MGMA) says it fears that half the garment factories in the country may have to shut down temporarily as soon as March, due to a shortage of raw materials from China.

The association announced this during a press conference at the Union of Myanmar Federation of Chambers of Commerce and Industries (UMFCCI) headquarters in Yangon last Friday.

According to the association, garment manufacturers in the country may be forced to take such action due to a shortage of raw materials from China. Some 90 percent of the raw materials such as fabrics, textiles, and zips used by garment factories in Myanmar come from China, and supplies have been curtailed due to the coronavirus outbreak in China.

Much of China had been shut down for the week-long Lunar New Year holiday at the end of January, but the government extended it into early February as part of efforts to curb the spread of the outbreak. Even though the extended holiday is now over, factories in China only just started up operations last week. However, with many workers quarantined and travel restrictions in place, production is only restarting slowly.

Garment factories in Myanmar are already feeling the heat and have been coping since the start of the outbreak by reducing their operations and work hours, said Some factories have already started feeling the heat with reduction in operations and running hours, MGMA members said.

There are some 500 garment factories in Yangon Region. Of the total, 263 are Chinese-owned, 67 South Korean, and 92 local. The factories employ an estimated 500,000 workers.

Raw materials for the factories are imported from China by sea as well as across the border, but both routes have stopped flowing.

“Under those circumstances, garment factories run by South Korean companies may stop operating in early March. Without any improvement in the situation, the stoppage may continue till the end of April,” said Mr Ryan Kim, secretary general of the Korea Garment Association in Myanmar.

“The current issue we are facing is the shortage of raw materials. We can’t do anything without those materials. We have to try to be prepared for the worst situation,” said MGMA Secretary General Daw Khine Khine Nwe.

“For the flow of raw materials to resume, factories in China have to be operating at full capacity, but currently, just less than 60 percent of factories in China have resumed businesses and 50 percent of workers are not able to return to their workplaces yet,” said U San Khun, managing director of the Chinese Textile and Garment Association in Myanmar.

Even if factories in China were operating normally, there are difficulties with transportation and truck drivers cannot return their jobs due to travel restrictions in China, U San Khun said.

Compounding the issue, textile factories in China have been told to prioritise the manufacturing of face masks, according to the Myanmar Garment Manufacturers Association.

“It may take up to a month to obtain raw materials even when the situation returns to normal, and then Myanmar will still have compete with countries like Vietnma and Cambodia to buy the materials,” said Daw Khine Khine Nwe.

She added the Customs Department and MGMA have already agreed to facilitate port clearance as smoothly as possible so that raw materials do not pile up at the port once they become available again.

Source: Myanmar Times

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