Global buyers are looking at Myanmar as a production hub. China is facing rising costs and labor shortages. There are concerns over red tape in Vietnam as well as sometimes fatal labor unrest in Cambodia. Myanmar also allows 100 per cent foreign investment in the garment industry as well as joint ventures with existing manufacturers and potential ones.
Outsourcing labor to Myanmar offers significant cost savings to western manufacturers. The country is expected to receive $4 billion in foreign investment this year following three consecutive years of record-breaking growth as the industry is poised to become a major player in the global garment supply chain. The EU’s inclusion of Myanmar in its Generalised Scheme of Preferences last year also allows Myanmar garments and footwear unfettered access to the world’s largest market.
The country has a long history of making yarn, fabrics and garments. Its key export markets are Japan and South Korea with the rest going to Brazil, Argentina, South Africa and Turkey. Since the US has planned to lift most trade sanctions on Myanmar, garment manufacturers anticipate a lot of demand in coming years. Nineteen foreign companies entered Myanmar’s garment industry in 2012 and some of Thailand’s top garment manufacturers are planning to shift to Myanmar.