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Honeys mulling third factory in Yangon

Honeys, the big Japanese clothing retailer that shifted production from China to Myanmar in 2012, is mulling with the idea of opening its third factory in Yangon, it is understood. The expansion of operations of Honeys in Myanmar is highlighted in a National Association of REALTORS (NAR) report on the bright outlook for the manufacturing sector as it benefits from an end to economic sanctions and low-cost labour.

Honeys, which in 2012 became the first Japanese garment manufacturer to begin production in Myanmar, makes about 18,000 pieces of clothing a day at its two Yangon factories, it was reported on January 14. It said that the factories account for about 20 percent to 30 percent of Honeys sales in Japan, one of the main destinations of garments made in Myanmar, along with South Korea and the European Union.

Since it began operating less than two years ago, the number of production lines at the second Honeys factory increased from five to 34 and its workforce from about 300 to 2,600, NAR reported. Honeys began outsourcing to China in the early 2000s but decided to shift part of its production to Myanmar because of cheaper labour. Labour costs were beginning to rise in Myanmar, which introduced a minimum daily wage in 2015, but at about K200, 000 a month were still lower than Bangladesh and Vietnam, Mr Takeshi Iguchi, Honeys head in Myanmar, informed the NAR. Cheap labour and the lifting of sanctions had contributed to rapid growth in the garment sector and the Myanmar Garment Manufacturers Association representing domestic and foreign companies, had quadrupled to about 400 members since 2015, NAR maintained.