Myanmar’s Garment Sector Facing Implosion as Orders Slump with COVID-19

  • Myanmar’s CMP (cut, make and pack) garment factories are struggling due to the lack of orders from the European Union, the major market.
  • In Jan 20, the majority of clothing factories were forced to stop running overtime due to dwindling stocks. Around 90% of supplies came from China, which were blocked because of coronavirus, and the rest came from Indonesia, Vietnam, Thailand and South Korea.
  • Many factories have reduced working hours and cut jobs, while some have permanently or temporarily shut down. Some factories have not received orders or even price enquiries since Mar 20, according to the Myanmar Garment Manufacturers’ Association (MGMA).
  • Employers have suggested that the Ministry of Labor provide financial assistance to prevent the factories from shutting down.
  • International closures have removed 50% of market demand for Myanmar’s clothing, handbags and footwear, according to the MGMA.
  • Garment exports are mainly shipped to the EU, Japan and South Korea and the country earned over USD4.5bn (MMK6.2tr) from the sector from 1 Oct 19 to Jul 20, according to the Commerce Ministry.
  • Export revenues are down USD65mn (MMK90bn) y/y, mainly due to COVID-19.
  • Over 500,000 are estimated to be employed in the garment industry. There are around 420 factories, of which 236 are Chinese-owned, 67 are owned by South Korean firms, 20 have Japanese owners and 92 are owned domestically by members of the MGMA.
  • The Commerce Ministry’s permanent secretary, U Khin Maung Lwin, said the ministry has appointed commercial attachés to EU countries and the US in order to gain greater access to those markets.

External Link :