Myanmar adds new factory per week as textile sector booms
2016-01-05 09:20:28 / MTG
The international textile sector has discovered Myanmar. Low wages, plentiful labour and an image problem in neighbouring Bangladesh after the 2013 Rana Plaza building collapse have all boosted the emerging country's chances.
Yangon- Green collars piled to one side, white polo shirts to the other - the young woman handles them with practised ease, creating a precise seam with her humming sewing machine. The garment in making then goes to the next station, where her co-worker applies a strip of green tape to the short sleeves. A fan rotates the warm air where 400 women labour eight hours each weekday day - four on Saturday - in the Shweyi Zabe textile plant on the outskirts of Yangon.
"One new factory opened every week in 2014," Khine Khine Nwe, the secretary of the Myanmar Garment Makers Association (MGMA), tells dpa.
There are currently 200,000 workers in more than 300 factories. Neighbouring Bangladesh has around 4,000 textile factories.
"In 10 years we want to have 3,000 factories," she says. The aim is to increase exports from the current US$1 billion a year 10 times over and to provide a million jobs. And investors are answering the call. Chinese, Taiwanese and South Korean companies are flooding into the country.
Shweyi Zabe’s boss Aye Aye Han complains that the competition is luring her workers away by offering a couple of dollars more. The country is benefiting from the waning star of neighbouring Bangladesh, where the collapse of the Rana Plaza textile factory with more than 1,000 fatalities two years ago drew attention to poor working conditions in garment factories.
The timing is also good in the politics of Myanmar, which is opening up after decades under a closed military dictatorship. There is a sense of opportunity since a nominally civilian government came to power in 2011. Garment makers in Myanmar "are evidently in the starting blocks," says Thomas Ballweg of a German fashion association.
"I see real potential." He notes that factories have apparently been well built, with only one or two floors - unlike Rana Plaza with its eight floors. The workrooms are clean and the supervisors open to ideas.
Christian Maag, who heads the German underwear company ESGE, with plants in Romania, Bulgaria, Greece and India, is helping Shweyi Zabeto modernize production in Myanmar. ESGE has provided software for production planning and assisted with computer programmes to help cutting to reduce fabric waste.
"We raised our productivity 20 per cent in 2013," Aye Aye Han says.
But there is a long way to go. Estimates put Myanmar productivity at half that of China, where production rates are high, but so are wages. The Verisk Maplecroft consultancy says labour costs are lower in Myanmar than anywhere else in the world. Clothing companies like Gap, H&M and Adidas are already producing here.
"It’s a kind of development aid, but with a business motivation, "Maag says. "If things go well, we will place orders."
A trial run has proved reasonably successful, with scope for expansion, and Maag is convinced that "the textile sector has a future here.
"Smart Myanmar, an EU project, is helping to build up a sustainable textile industry in Myanmar with the aim of secure jobs and good working conditions, along with conserving energy, recycling waste and cutting water consumption.
The head of the project is Simone Lehmann of Sequa, an organisation of German industrial associations with the German GIZ development aidagency. "Our focus is on small and medium-sized enterprises," she says. "We are supporting 16 of the 80 factories with local management."
Lars Droemer, sustainability manager at Swedish fashion company Lindex, is also optimistic on Myanmar. He praises the code of conduct agreed by the textile sector, which bans employing children younger than 15, guarantees a minimum wage, restricts working hours to a maximum of 60 hours a week and allows trade unions.
"We are interested in Myanmar, because we were able to help set up the standards from the start," he says. Lindex operates according to the principal "People - Planet - Profit," in that order, he says.
Promoting local industry is part of the sustainability drive. "Foreign companies take down their factories (and relocate) when operations become cheaper somewhere else, but local employers do not," Droemer says.
The smaller Myanmar companies have yet to master the full production chain. At present they sew and package, but the big clients want a complete service, from supplying fabric and thread to dealing with customs and loading for shipment.
The MGMA is working in this direction. "We need textile weaving plants in Myanmar, and our companies need financing, duty-free imports of goods for re-export and we need more trained seamstresses," Aye Aye Han says.
Ballweg is confident. "Myanmar is today where Bangladesh was 10 years ago," he says. "But things develop three times more quickly today."
"One new factory opened every week in 2014," Khine Khine Nwe, the secretary of the Myanmar Garment Makers Association (MGMA), tells dpa.
There are currently 200,000 workers in more than 300 factories. Neighbouring Bangladesh has around 4,000 textile factories.
"In 10 years we want to have 3,000 factories," she says. The aim is to increase exports from the current US$1 billion a year 10 times over and to provide a million jobs. And investors are answering the call. Chinese, Taiwanese and South Korean companies are flooding into the country.
Shweyi Zabe’s boss Aye Aye Han complains that the competition is luring her workers away by offering a couple of dollars more. The country is benefiting from the waning star of neighbouring Bangladesh, where the collapse of the Rana Plaza textile factory with more than 1,000 fatalities two years ago drew attention to poor working conditions in garment factories.
The timing is also good in the politics of Myanmar, which is opening up after decades under a closed military dictatorship. There is a sense of opportunity since a nominally civilian government came to power in 2011. Garment makers in Myanmar "are evidently in the starting blocks," says Thomas Ballweg of a German fashion association.
"I see real potential." He notes that factories have apparently been well built, with only one or two floors - unlike Rana Plaza with its eight floors. The workrooms are clean and the supervisors open to ideas.
Christian Maag, who heads the German underwear company ESGE, with plants in Romania, Bulgaria, Greece and India, is helping Shweyi Zabeto modernize production in Myanmar. ESGE has provided software for production planning and assisted with computer programmes to help cutting to reduce fabric waste.
"We raised our productivity 20 per cent in 2013," Aye Aye Han says.
But there is a long way to go. Estimates put Myanmar productivity at half that of China, where production rates are high, but so are wages. The Verisk Maplecroft consultancy says labour costs are lower in Myanmar than anywhere else in the world. Clothing companies like Gap, H&M and Adidas are already producing here.
"It’s a kind of development aid, but with a business motivation, "Maag says. "If things go well, we will place orders."
A trial run has proved reasonably successful, with scope for expansion, and Maag is convinced that "the textile sector has a future here.
"Smart Myanmar, an EU project, is helping to build up a sustainable textile industry in Myanmar with the aim of secure jobs and good working conditions, along with conserving energy, recycling waste and cutting water consumption.
The head of the project is Simone Lehmann of Sequa, an organisation of German industrial associations with the German GIZ development aidagency. "Our focus is on small and medium-sized enterprises," she says. "We are supporting 16 of the 80 factories with local management."
Lars Droemer, sustainability manager at Swedish fashion company Lindex, is also optimistic on Myanmar. He praises the code of conduct agreed by the textile sector, which bans employing children younger than 15, guarantees a minimum wage, restricts working hours to a maximum of 60 hours a week and allows trade unions.
"We are interested in Myanmar, because we were able to help set up the standards from the start," he says. Lindex operates according to the principal "People - Planet - Profit," in that order, he says.
Promoting local industry is part of the sustainability drive. "Foreign companies take down their factories (and relocate) when operations become cheaper somewhere else, but local employers do not," Droemer says.
The smaller Myanmar companies have yet to master the full production chain. At present they sew and package, but the big clients want a complete service, from supplying fabric and thread to dealing with customs and loading for shipment.
The MGMA is working in this direction. "We need textile weaving plants in Myanmar, and our companies need financing, duty-free imports of goods for re-export and we need more trained seamstresses," Aye Aye Han says.
Ballweg is confident. "Myanmar is today where Bangladesh was 10 years ago," he says. "But things develop three times more quickly today."
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