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Myanmar emerging a strong apparel sourcing hub

In less than three years, Myanmar's export revenues from garments have doubled. Many new apparel factories opened last year. And growth is expected to continue thanks to investment in renovation and expansion of existing facilities.

There are around 275 large, garment exporting factories in Myanmar and over a dozen textile and cotton ginning factories. The country has low labor costs and is seen as an attractive sourcing base. Many global companies are setting up specialised production units similar to the ones they maintain in other countries. Manufacturers are seeking to capture added value by increasing the vertical integration of their production. Buyers feel that workers can be trained through collaborative partnerships to improve efficiencies and compliance.

However, compared with other countries in the region, Myanmar's garment industry is still small and tends to specialise in high quality, technical items. Moreover, the banking sector is under-developed. Now production in Myanmar operates along a contracting system, where raw materials are imported by the customer, and designs, patterns and instructions are all provided to the factory. The factory stitches the garment before packaging it for transport to the buyer. Thus profit margins are much lower and this focus on the production part of the value chain means there is little development of wider domestic supporting services and vertical integration.

 
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