CMP businesses import raw materials worth $1 bln as of 13 March

Imports of raw materials by CMP businesses have been valued at US$1.028 billion between 1 October and 13 March in the 2019-2020 fiscal year, an increase of $39 million compared with the year-ago period, according to the Ministry of Commerce.
The majority of the CMP enterprises import raw materials, mainly from China. These businesses have faced shortages of raw materials starting from February-end, owing to the current negative impact of the corona virus.
At present, some CMP garment factories have shut down on the reason for the lack of raw materials due to the COVID-19 negative impacts, leaving thousands of workers unemployed. Even worse, some foreign entrepreneurs are also running away from their businesses. Those factories without official notification of closure will be inspected by a ground field inspection team. And, the factory operators can face legal actions under the Myanmar Investment Law (MIL) if they fail to comply with notification requirements for the closure of factories, said U Thant Sin Lwin, director-general of the Directorate of Investment and Company Administration (DICA).
The labour-intensive enterprises are badly battered by the Covid-19, he added.
To deal with the shortage of raw materials for the CMP garment factories in Myanmar, the Ministry of Commerce, the Myanmar Garment Manufacturers Association and the Chinese Embassy in Myanmar, the China Enterprise Chamber of Commerce in Myanmar (CECCM) have been jointly importing raw materials through border trade channels and airlines.
About 50 trucks loaded with CMP raw materials are daily entering the country through Muse checkpoint. A cargo plane of raw materials from China’s Quanzhou city arrived in Myanmar on 17 March. These are part of the emergency supplies to 11 factories, said U Min Min, director-general of the Trade Department with the Commerce Ministry.
Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the cutting, making, and packaging (CMP) basis, and it contributes to the country’s GDP, to a certain extent.
The CMP industry has emerged as very promising in the export sector. The value of CMP exports was just $850 million in the 2015-2016 fiscal year, but it tripled within two years to reach $2.5 billion in the 2017-2018FY. During the last fiscal year, incomes from garment exports were over $1 billion higher than the previous fiscal year, according to the Ministry’s data.
Since an outbreak like Covid-19 might happen in the future it is necessary to prepare for a sufficient supply of raw materials. The public and private sectors will cooperate in setting up the supply chain on our own sources, including weaving, knitting, dyeing, and sewing factories.
Japan is the largest market for Myanmar apparel, followed by the European Union.
The MGMA has more than 500 members, and garment factories in Myanmar, employing more than 500,000 workers. Investors prefer to invest in countries with inexpensive labor, such as Myanmar. —GNLM
(Translated by EMM)

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