Since the industry began, cheap labour has been the apparel manufacturing industry’s North Star guiding the search for new sourcing hubs. While quite a few locations make the cut based on this single criterion, the list shrivels as various other internal and external factors start playing their influence. Myanmar (Burma), although freshly out of a national turmoil, is one such country that has caught the fancy of apparel retail giants such as Gap, H&M, Marks & Spencer, Primark, and N Brown Group plc – a convincing list that ensures the country, if mentored right, will be a serious apparel business contender.

According to the Myanmar Garment Manufacturers Association (MGMA), Burmese garment exports jumped to US $ 1.46 billion in 2015, accounting for 10 per cent of the country’s export revenues, and the country is now heading to an ambitious target of US $ 12 billion by 2020. On the other hand Ethiopias, in FY 2014-15, exports of yarns, grey fabric, garments and traditional handloom products together generated US $ 60 million, which is merely a fraction of Myanmar’s earnings from the sector. The flurry of orders and investments however has been undoubtedly stronger for the latter.

On the surface of it, the scales appear to be tilted in favour of Ethiopia and few other African Nations. But before any conclusions are drawn, Myanmar’s landscape is bubbling with developments that must be taken note of.

The intent to pave the path

Almost immediately after the military rule concluded in Myanmar, garment manufacturing was amongst the sectors highlighted by the authorities as a key area of focus and the focus has only grown sharper with time. The significance of the garment manufacturing sector grew more prominent when the Myanmar Government launched its first National Export Strategy (NES) in March 2015, outlining a five-year plan that aimed to improve the country’s export capacity. Under the NES, seven key sectors were identified to have great potential to drive economic development and employment generation, which included the textiles and garment industries.

Burmese foreign relations, Burmese advantages…

Its 2014 exports were majorly destined to locations such as Japan (38%) and Korea (31%), out of which Japan offers GSP privileges to Myanmar. The exports to EU contributed to the total a 23% share. What could possibly cost Myanmar by a huge fraction is a lack of formidable trade arrangements with key market as compared to its competitors. Ethiopia enjoys AGOA extension for the coming decade, and Vietnamese TPP and EU-FTA is a genuine threat. The Union of Myanmar Federation of Chambers of Commerce however is hopeful that Myanmar and the US will resume discussion on GSP Plus status in the coming months. With enhanced prospects of the US further relaxing sanctions and even granting GSP benefits, the MGMA anticipates that Myanmar’s garment sector will experience exponential growth in years ahead, creating around 1.5 million new jobs from its current level of approximately 250,000 and generating US $ 12 billion in export value by 2020.

Permitted Garment Manufacturing Enterprises by Myanmar Investment Commission in 2016 (till June)

Name of Company


Country of Origin

Glamour Garment Company Limited

Yangon Region, Hlaing Thar Yar Township, Industrial Zone – 5


Panda Textile Company Limited

Mandalay Region, Sintkaing Township,
Paleik Town


Roo Hsing Garment Manufacturing
Company Limited*

Yangon Region, Hlaing Thar Yar Township, Industrial Zone


Toya Myanmar Co. Ltd. *

Yangon Region, Hmawbi Township


*Fully Foreign Funded Investments

At the same time, Myanmar is also a WTO member and its Most Favoured Nation (MFN) status allows it to export at low tariff rates to other member countries. Another factor that is being designed to play to Myanmar’s advantage is the position it enjoys in the ASEAN. Myanmar is part of the China-ASEAN Free Trade Area (CAFTA), which was formally established in 2010, removing import duties on a great number of tariff lines between China and ASEAN countries – a magnificent opportunity for Myanmar to become a new manufacturing powerhouse. The CAFTA Agreement went into upgradation in 2015 to raise bilateral trade to US $ 1,000 billion (from about US $ 480 billion in 2014) and ASEAN-bound FDI to some US $ 150 billion by 2020. Such an increase in trade of goods and services as well as economic and technological cooperation (i.e. technology transfer) is expected to give an extra push to Myanmar’s garment industry in the mid-to-long term, including relocation of China-based garment manufacturers to the country.

Area-Wise Distribution of International Apparel Manufacturers In Myanmar

S. No.

Name of companies


Country of Origin


Chai Moon Garment

Pathein Township of Ayeyawady region and Dagon Myothit (East) Industrial Zone



Honeys Garment Industry Ltd.

Yangon Industrial Zone, Mingalardon, Yangon



World Jin Garment

Thardukan Industrial Zone, Shwe Pyi Thar, Yangon



Shin Sung Garments




Myanmar Solamoda Garments Group

Shwe Than Lwin Industrial Zone, Hlaing Tha Yar



PT. Sungintex

Shwe Than Lwin Industrial Zone, Hlaing Tha Yar


The Chinese relocations can have interesting manifestations because while Ethiopia has received interest from Indian and Sri Lankan manufacturers predominantly, and Vietnamese market witnessed few Chinese relocations, Myanmar can be expected to receive the product prowess from China (The Myanmar Investment Commission (MIC) allows 100 per cent FDI in setting up textile and garment factories in the country). Vietnam is working towards reinforcing its niche in product categories like outerwear, and Ethiopia, and similar to Bangladesh, will build its basics expertise.

Simplifying procedures & developing infrastructure

Myanmar has announced plans to introduce an electronic import export clearance system named Myanmar Automatic Cargo Clearance System (MACCS) and Myanmar Customs Intelligence System (MCIS) by November 2016 in Yangon area, including international ports, Yangon Airport International Cargo Terminal and Thilawa Special Economic Zone.

Under the recently announced NES, the agenda of development of export infrastructure (e.g. deep sea ports), production locations (e.g. sector-specific economic zones), country quality standards in compliance with international standards, as well as upgrading of the existing regulatory and legal framework to better protect the rights of both producers and workers have gained traction. Highlight activities in this strain will be two road sections on the Yangon-Mandalay highway being upgraded as a pilot project. The new Construction Ministry has also undertaken a project to build low-cost housing units that cost less than K10 million (US $ 8395) in Naypyidaw, the capital of Myanmar.

In particular, the NES acknowledged the need for the garment industry to move up the value chain, advising it to move towards operations on a “Free-On-Board” (FOB) basis from its current CMP system as a longer-term development goal. In the wake of the NES launch, the MGMA has arranged workshops to help factories learn to handle “FOB” operations, with topics including production planning, merchandising, logistics, communications and audits.

Reducing trade barriers for traders and manufacturers based in Myanmar, the Government introduced a new, fully online export and import licensing system in early June 2016. Companies can now print out an export and import licenses through the Myanmar TradeNet website after filling out the application form and paying the licensing fee through an e-payment system.

Proactively addressing the labour concerns

Myanmar has actively taken notes from the global apparel manufacturing scene and worked proactively on giving greater rights to workers. Country’s first Labour Organisation Law was brought out in 2011. MGMA also ratified a Code of Conduct for its member companies as a guide and framework for responsible business practices in the country’s garment sector.

The dampeners

Like most of the existing and upcoming hubs, even Myanmar is yet to build a vertically integrated ecosystem locally. Given the ambitious target of US $ 12 billion by 2020, it will take a major effort for Myanmar to overcome this barrier within such a short period of time. At the same time, lack of funding channels is a gnawing concern. In Myanmar, the garment industry consists mostly of SMEs that do not have the necessary financial resources or knowledge to secure a loan from the financial sector and the country’s banking sector is vastly under-developed. As of May 2016, only 13 foreign banks were permitted to operate in Myanmar. These banks are allowed to offer a narrow range of services and although they are allowed to provide credit to local banks and financial institutions as well as foreign companies, they are not allowed to participate in retail banking operations or engage in direct lending in local currency.


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