Public sector manufacturing exports down by $388 mln as of 5 June

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File photo shows textile workers sewing on production line at a garment factory in Hlinethaya Industrial Zone in Yangon. Photo: Phoe Khwar

Exports of finished industrial goods by public sector sharply plunged to US$2.4 billion between 1 October and 5 June in the current fiscal year 2019-2020, which is a decrease of $388.79 million compared with the corresponding period of the previous financial year, according to the Ministry of Commerce. The public sector’s manufacturing exports were registered at $2.79 billion during a-year ago period.
Meanwhile, the private sector exported $3.9 billion worth manufacturing exports, which rose from $3.7 billion in the last fiscal.
As per figures provided by the ministry, the exports of finished industrial goods totalled $6.3 billion in the current fiscal, which declined from $6.53 billion of the same period in the 2018-2019FY.
Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, and it contributes to the country’s GDP to a certain extent. At present, some CMP garment factories have shut down on the reason for the lack of raw materials due to the coronavirus 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 DICA Director-General U Thant Sin Lwin.
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 jointly imported raw materials through border trade channels and airlines.
However, import values of raw materials by CMP businesses dropped by $92.8 million compared with a year-ago period.
The CMP garment sector which contributes to 30 per cent of Myanmar’s export sector is currently struggling because of the cancellation of the order from the European countries and suspension of the trade by western countries. It can harm the export sector to a certain extent, the businesspersons pointed out.
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 year2018-2019, incomes from garment exports were over $1 billion higher than the previous fiscal year, according to the Ministry’s data.
Since an outbreak like coronavirus 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 and relatively well-educated labour such as Myanmar, along with some tariff exemptions and FDI incentives. However, the country has other disadvantages such as electricity shortages, high transport and communication costs and administrative red tape.— Ko Htet (Translated by Ei Myat Mon)

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