Virus outbreak disrupts Myanmar garment industry’s supply chain

Several garment, footwear and bag factories in four industrial zones around Yangon have had to shut down or curtail operations due to a shortage of raw materials from China, an official from one of the industrial zones has revealed.

However, despite the disruption of operations at the factories, container loads of raw material from China remain stuck in Yangon ports such as the Myanmar Industrial Port, Thilawa Jetty, and Asia World Port Terminal, said U Aye Thaung, chair of the Shwe Pyi Thar Industrial Zone Committee on Wednesday.

“Many containers from China have arrived at MIP, Thilawa Jetty, and Asia World Port, but garment factories haven’t been able to get those raw materials out yet,” U Aye Thaung said.

“Some cargoes have already arrived, some are on their way to Myanmar from China, and some are ready to ship from China. But the shipment of raw materials coincided with the Lunar New Year and some factories were still closed due to the coronavirus outbreak. There are many containers ready in China to ship to Myanmar,” he added.

The issue now is being unable to clear the containers of raw materials in local ports, he said.

“There are many containers at every terminal in Yangon, but factories haven’t been allowed to take those containers out as they came from China. Actually, if all documents are ok, they should let the containers be cleared. Now, the authorities are saying they may keep the containers for 14 days or one month for inspections or quarantine. If this is the case, ee all are in trouble,” said U Aye Thaung.

“Stocks of raw material in local factories are expected to run out by the end of this month. If the goods are held for about two weeks or more, all the factories will have to shut down. What is needed now is the quick clearance of containers of raw materials from China once all duties have been paid to the Myanmar Port Authority,” U Aye Thaung said.

“Besides garment factories, factories making shoes and bags rely on raw materials from China. Those that still have raw materials are operating so far, but factories that have run out have ceased operating. Nearly all factories – not only those in Shwe Pyi Thar Industrial Zone, but also from the Shwe Lin Ban, Hlaing Thar Yar, and Dagon Seikkan industrial zones – face having to shut down,” he said.

Garment, shoe and bag factories in Yangon Region usually import raw materials from China one, two or three months in advance. Factory shutdowns began occurring in mid-January because of the Lunar New Year and it was expected that all would return to normal at the end of January. Now we are unsure when normal operations can resume due to the coronavirus outbreak,” said U Aye Thaung.

“Some factories in Myanmar face facing severe difficulties due to the break for the Lunar New Year holidays and virtual shutting of Chinese factories due to the coronavirus. The number of factories that have been shut down may be as high as 10,” he said regarding the current situation in the Shwe Pyi Thar Industrial Zone.

He added that some factories are still running because they have resorted to reducing their operating hours.

“We submitted an official letter to the government regarding the situation and are waiting for a response. The impact of the current situation was totally unexpected,” he said.

“If raw materials were produced in our country, this wouldn’t have happened. The current situation has highlighted what needs to be developed in Myanmar,” U Aye Thaung said. – Translated

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Source : Myanmar Times

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