The Myanmar International Textile and Garment Industry (MTG) exhibition saw hundreds of textile merchants and fashion designers alike gather together for the last week of November, marking the third successful celebration of Myanmar-produced apparel.Held at the Myanmar Convention Center in Yangon, the exhibit is Myanmar’s principal textile and manufacturing tradeshow, which allows attendees to better understand garment in the South East Asian nation. The 2014 MTG specifically profiled looms, yarn processing machinery and accessories, weaving machinery and accessories, knitting machineries, and textile screen-printing machinery.
In attendance were foreign textile, knitting and garment manufacturers; garment machinery importers and exporters; distributors; agents; dealers; industry associations and trade delegates seeking to tap into the burgeoning garment trade forecast, which has seen huge growth in recent years.The event’s success is no coincidence. According to reports, total investment in Myanmar’s apparel industry shot up from US$300m in fiscal 2012 to $1.9bn in 2013, with investment figures hitting $4.1bn just last year. The sector is also expected to receive billions of dollars of foreign investment by the end of 2014.The Myanmar Investment Commission predicts that some $4bn of investment will flow into the apparel industry this current fiscal year, making it one of the most lucrative industries operating within the developing nation – on par with telecoms.The Union of Myanmar Federation of Chambers of Commerce and Industry adds that if the industry does receive $4bn in investment this year, it will double in size. Foreign investment in Myanmar is chiefly coming from South Korea, China and Japan.Top tier retailer Gap revealed in September that it had begun production in Myanmar at two factories near Yangon; producing vests and jackets for secondary brands, Old Navy and Banana Republic.Meanwhile, the EU’s inclusion of Myanmar in its Generalised Scheme of Preferences last year allowed locally made garments to enter Europe, without the imposition of quotas or tariffs on goods. The incentive could also draw manufacturers from Thailand to set up factories in Myanmar, industry analysts said.The HistoryMyanmar has produced yarn, fabric and complete garments for decades. The country’s sizable garment industry—which employed approximately 300,000 people in the early 2000s, according to government figures at the time—was hit hard by a U.S. trade embargo imposed in 2003. Prior to the sanctions, about 85% of the nation's exports were apparel and textiles of which an estimated 25% went to the U.S. The Obama administration started lifting those sanctions in 2012, after a new nominally civilian government in Myanmar enacted a series of economic and political reforms, the Financial Times reported.According to the Myanmar Garment Manufacturers Association (MMA), exports from the nation's 200 garment factories, 195 of which are privately held, reached US$770m in 2011. Key export markets are Japan (US$348m) and South Korea (US$232m), with other exports going to Brazil, Argentina, South Africa and Turkey. Nineteen foreign companies entered Myanmar’s garment industry in 2012 and some of Thailand's top garment manufacturers are planning to shift to Myanmar soon, according to Insight Alpha. Why Myanmar now?Garment industry analysts have warned that garment manufacturing is leaving China and heading to Southeast Asia, due to rising costs and labor shortages. Until recently, Vietnam and Cambodia had been the major recipients of this shift. However, recent increases in wages, commercial red tape, and political unrest in Cambodia, mean foreign buyers are now looking to Myanmar as the next apparel hub.Myanmar also allows 100% foreign investment within the garment industry and permits joint ventures with existing manufacturers.Outsourcing labor to Myanmar incites huge cost savings for manufacturers, with local workers being the lowest paid in Asia. At US$2 per day, they are cheap hire compared to US$20 per day in Thailand.Investment and tax incentives such as custom duty exemptions on imported machinery are also attracting foreign interest.The FutureLarge amounts of education and training are needed to bring factories up to international standards required by major retailers and brands to ethically sell clothing in their home countries. There are steps being put in place by the International Labour Organisation (ILO); to implement a Better Factories program, legislate minimum wage laws and occupational health and safety, as well as efforts to eliminate child labor. ILO liaison officer in Myanmar, Steve Marshall, told local media last year that the ILO is also developing a legal framework for the industry with proper policing mechanisms, and communicative associations for factory owners and trade unions to join.One major goal, he said, is a labor market that is “cooperative rather than confrontational”.