Myanmar is the rotating chair of ASEAN in 2014, which also provides an opportunity to test the results of the reforms it has implemented since 2011. This opportunity coincides with an important point in the development of the garment industry.
Myanmar’s garment industry is very prosperous. There are currently about 350 garment factories in the country, and garment exports rank first in the country. In 2012, the industry’s export profits exceeded US$917 million, and it will provide more than 100,000 jobs by 2015. Among them, clothing exports to Japan earned US$348 million, and US$183 million of clothing was exported to South Korea.
After most international sanctions are lifted, the recovery of the textile and clothing industry will generate development dividends as the country modernizes, but the overall development prospects of the industry still lack sustainability. Myanmar’s domestic textile and apparel supply chain is incomplete, which means that domestic garment factories mostly rely on imports for all raw materials and most other auxiliary materials, and only packaging materials can be purchased domestically.
The main problems of the industry include poor working conditions, low wages, and lack of guarantees for the health and safety of workers. The most logical choice for leapfrog development in pursuit of social benefits is to obtain higher GDP. To do this, we must find benchmarks that impact value creation, supply chains, competitive drivers, and the social and environmental benefits of our industry.
When international buyers place orders at Myanmar garment factories, they usually look at their manufacturing methods of “cutting, making and finishing” (CMT). Myanmar’s goal is to continuously upgrade its production system and transform from contract manufacturers to design manufacturers and original brand manufacturers (OBM) to increase the added value of products. This transformation needs to be achieved through changes to the legislative system.
If Myanmar’s garment industry cluster can produce in accordance with social and environmental requirements, the benefits it will gain will far exceed the current US$6 billion in garment exports. To improve social and environmental benefits by optimizing the textile and apparel value chain, there are two broad options to choose from.
First, product upgrading, which means producing more complex products, requires improving the company’s capabilities. With the accumulation of experience, the industry will transition to providing fashion products with higher added value. The second is process upgrading, which reduces costs and enhances flexibility by improving production efficiency and lean production, which requires capital investment and more skilled workers to operate new equipment, as well as the application of more complex logistics technologies.
Myanmar’s enthusiasm to catch up with its neighbors is unprecedentedly high, and it is possible to enter the ranks of leaders in the apparel industry cluster. This transformation requires the transplantation of global best management practices and the cooperation between the government, industry associations, manufacturers, buyers and the public. of close cooperation. From this point of view, Myanmar’s transformation model will have an important impact on ASEAN’s development prospects, that is, combining humane working conditions, environmental protection and enhancing competitiveness to achieve sustainable development.
