garment_11_0

New ASEAN-led trade deal to boost Myanmar manufacturing sector

The newly formed ASEAN- led global trading bloc, Regional Comprehensive Economic Partnership (RCEP), could boost the Myanmar manufacturing sector, according to the research and advisory firm Oxford Business Group. Myanmar could capitalize on the 15- country trade bloc, the biggest in the world, to grow its manufacturing base, the research group said. Peter Crowhurst, the chief executive officer of the British Chamber of Commerce Myanmar, told OBG that “local, regional and indeed global manufacturers who wants to be active in the ASEAN market place are taking advantage of the opportunities in Myanmar”. The Myanmar economy is very young, it is agriculturally based and overall manufacturing is in its infancy.

Crowhurst noted that Myanmar has a lower cost base, a growing infrasture and a receptive government that is seeking to strengthen and diversity its economy. The fresh overwhelming mandate the ruling National League for Democracy received during the November 8 polls would give impetus for more reforms that would enable the country to take advantages of the RCEP. With the new government under the direction of Daw Aung San Suu Kyi, now is the time to build and strengthen capabilities of the respective ministries to support the effective and balances implementation of RCEP. During the last five years, international business invested over US$6 billion in 711 manufacturing businesses in Myanmar.

Similarly during those five years, firms mostly from Japan and Singapore invested US$1.1 billion in 50 businesses in Myanmar special economic zones. Manufacturing sector attracted the most foreign investments during the from 2016 to 2020 with $7.4 billion according to Directorate of Investment and Company Administration. The RCEP was signed on November 15 on the sidelines of the ASEAN summit. The signatories are the 10-country ASEAN, China, Japan, South Korea, Australia and New Zealand. The new trading bloc represents around 30 percent of the world’s population, 30pc of global gross domestic product and about 28pc of the international trade. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Source: Myanmar Times

sms-finacing-in-myanmar

SMEs will be able to connect to the global manufacturing network

The 15 members of the RCEP will have more business opportunities, and Myanmar’s small and medium enterprises will be able to connect to the global manufacturing network, according to the Ministry of Investment and Foreign Trade. Than Aung Kyaw, Director-General of the Department of Foreign Economic Relations said. The Regional Comprehensive Economic Partnership (RCEP) is for the 10 ASEAN members and its six dialogue partners: China, Japan Korea India It is a free trade agreement between Australia and New Zealand. The agreement, which includes developed countries, will provide better trade and investment opportunities for Myanmar’s exports as it seeks to revive Myanmar’s economy beyond COVID-19.

According to state-run newspapers, the technology and assistance required for the transition to a technology-based digital economy, especially in the post-COVID-19 period, will be available in accordance with the terms of the Economic and Technological Cooperation Chapter of the Convention. The RCEP is comprised of 10 ASEAN member states and six dialogue partners: Australia, China, India, Japan, South Korea and New Zealand are negotiating a Regional Comprehensive Economic Partnership (RCEP) agreement, which began in 2013. RCEP accounts for almost half of the world’s population, accounting for 42.2% of the global economy; It is expected to become one of the world’s largest trade groups, accounting for 29.1 percent of world trade and 32.5 percent of global foreign investment.

According to the Ministry of Investment and Foreign Trade, Myanmar’s participation in the RCEP will increase Myanmar’s exports to a market that accounts for about half of the world’s population with duty-free access. The RCEP is intended to be a more modern, comprehensive, high-quality and mutually beneficial free trade agreement than the current ASEAN Free Trade Agreement. Myanmar’s participation in the Regional Comprehensive Economic Partnership (RCEP) will provide opportunities for Myanmar’s exports to more than half of the world’s population with duty-free access, and the agreement will also increase investment from signatories to Myanmar.

Source: Daily Eleven

textile

Asean manufacturing sector continues to struggle in the mire, with Myanmar among the seven countries surveyed the worst

The ASEAN manufacturing sector continues to struggle in the bottom line, with Myanmar outperforming the worst of the seven countries surveyed, according to an October IHS Markit survey sponsored by the Nikkei. According to the latest data from the IHS Markit Purchasing Managers’ Index (PMI), the downward trend in the ASEAN manufacturing sector continued in October. The sector has been in decline for eight consecutive months, but the rate of decline has weakened and softened within a month. According to the latest data, both production and new order volumes continued to decline, and the decline was slightly lower and generally moderate. However, companies remain optimistic about production for the next 12 months.

The ASEAN PMI in October stood at 48.6, slightly lower than the significant 48.3 in September, indicating a modest decline in the ASEAN manufacturing sector. By country, four of the seven participating countries reported operating declines in October, with Burma hitting a record 30.6. Elsewhere, Indonesia posted a modest decline of 47.8, but was slower than in September. Malaysia, on the other hand, has seen a slowdown in the 48.5 index, signaling a moderate decline. The Philippines was below 50 in October with a score of 48.5, falling again. Thailand rose for the first time since December 2019, hitting a one-and-a-half-year high of 50.8. Vietnam also saw strong growth in October, with an index of 51.8. In October, Singapore recorded the first increase in manufacturing conditions since July 2018, raising the index to 52.

Overall, the ASEAN manufacturing sector remained challenging in October, and the continued decline in factory production and new orders was the main reason for the overall downturn. However, the decline was not as noticeable as in September. Weak external demand has been a major drag on factor as new export orders have plummeted. As inventory declines further, the latest data underscores further signs that pressure is on productivity. As a result, job cuts continued and the rate of layoffs changed slightly from last month, and overall remains strong. Consumer demand weakened, and companies cut their purchases in October. The latest drop was the slowest since February, but remains strong. However, there were still difficulties in delivering supplies, and the average time to complete the work was longer than in September.

Production costs rose sharply in September, and overall, pressure on profits increased, and average sales fell further. Looking to the future, companies are confident that production will increase in the coming year. Success has been the highest since January, slightly below the survey’s long-term average. Lewis Cooper, an economist at IHS Markit, said: “The October data highlights the continued downturn in the ASEAN manufacturing sector. As manufacturing and new orders continued to decline, operating conditions declined for the eighth straight month, and the decline was slightly weaker than the previous month. Due to weak demand and weak production pressures, the workforce continues to cut. The only positive sign is the futures index, which is above 50, ”he said.

Source: Daily Eleven

Capture_71

Manufacturing sector attracts 188 foreign enterprises last FY

Majority of foreign enterprises eye the manufacturing sector for investments in the past financial year 2019- 2020, pulling in US$1.128 billion from 188 projects, the Directorate of Investment and Company Administration’s statistics indicated. Of 245 foreign enterprises permitted and endorsed by Myanmar Investment Commission and the respective investment committees between 1 October and 30 September of the last FY, 188 enterprises pumped FDI into the manufacturing sector. However, the quantum of investment in power is higher than in any other sectors. Power sector topped $1.67 billion from eight enterprises.

The agricultural sector has attracted $17.73 million from three projects. The livestock and fisheries sector has drawn five foreign investment projects worth $138.48 million. Two projects worth $300.454 million have been approved in the transport and communications sector. The hotels and tourism sector has pulled in the investment of $53.342 million from five foreign enterprises. The real estate sector has also pulled 1.115 billion from eight foreign projects, while industrial estate sector received $273.49 million from two enterprises. Over $469 million of FDI has been pumped into the other services sector from 29 businesses. At present, the labor-intensive enterprises are facing financial hardship, disputes between the employers and employees and the closure of factories. However, those cases in the industry did not hinder new investments.

The manufacturing enterprises and businesses that need large labor force are prioritized. MIC is endeavoring to clear those kinds of projects so fast that they can start running in the post-COVID-19 period, the DICA official said. Moreover, MIC has shown readiness to accept the projects regarding the production of mask, pharmaceuticals and medical equipment, in responding to the activities of prevention, control and treatment of COVID-19. Myanmar attracted foreign direct investments of more than US$5.68 billion between 1 October and 30 September in FY2019-2020, including the expansion of capital by existing enterprises and acquisitions in the Special Economic Zones, according to the Directorate of Investment and Company Administration (DICA).

Source: The Global New Light of Myanmar

1466480881230_MyanmarRMIP201627_475010

CMP raw materials import plunges to $2.17 bln in 2019-2020FY

CMP raw materials import has registered at US$2.17 billion in the past financial year 2019-2020, which plunged from $2.37 billion recorded in the 2018-2019FY, according to the Ministry of Commerce. Myanmar manufacturing sector has mostly 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 COVID-19 negative impacts, leaving thousands of workers unemployed. The COVID-19 badly batters the labor-intensive enterprises, said an official of the Directorate of Investment and Company Administration.

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 in the last FY dropped by $197.7 million compared to a year-ago period. The CMP garment sector in Myanmar has been hit hard by the coronavirus impacts amid the global demand slump, said an official of Myanmar Garment Manufacturers Association. Supply chain disruptions and cancelling customer orders following the coronavirus outbreak hurt the global textile industry. Similarly, the CMP garment sector which contributes to 30 per cent of Myanmar’s export sector is bracing for downward trend owing to the cancellation of order from the European countries and suspension of the trade by western countries amid the pandemic.

Exports of garments manufactured under the cut-make-pack (CMP) system were valued about US$4 billion around the past eleven months in the last financial year 2019-2020, said an official of the Ministry of Commerce. 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 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.

Source: The Global New Light of Myanmar

11772543195_7d8e0fc257_h-2

Myanmar’s manufacturing sector hit hard by new lockdown plan

Myanmar’s manufacturing sector has been hit hard by the new Lockdown program, which has led to a slump in production and the closure of many factories, reducing many jobs, according to the September 2020 Nikkei Myanmar Manufacturing PMI. Myanmar’s manufacturing sector has been hit hard by a number of new lockdown plans to combat the growing Coronavirus outbreak. Factories in Rangoon Division, including major industrial zones, temporarily closed, both production and new orders fell sharply and jobs were cut. Deteriorating business conditions in September abruptly ended the short recovery period between July and August.

Myanmar’s manufacturing PMI stood at 35.9 in September, down from 53.2 in the previous month, signaling a sharp decline in manufacturing. At 35.9, the second-lowest level in the survey, which began in December 2015, was higher than April 29, but the one-month PMI decline of 17.3 was the highest in record history, surpassing the April drop of 16.3. Four of the five components of the PMI were negative in September, with the exception of supply delays. Both production and new orders fell for the second-highest rate in survey history, with indexes falling more than 28 points in a single month. The list of jobs and inventories fell at the fastest rate in three to six months, respectively. Production fell sharply in September as the virus forced the closure of factories in key areas. More than half of the companies surveyed, 54 percent, reported lower production than the April record 81 percent, the latest decline in the three-month period after the spring lockdown.

New restrictions slowed demand during the period, and the number of new jobs fell in June-August, after a surge in new production, making it the second-highest rate in survey history. Demand in domestic markets was particularly weak, with new export orders, which stabilized in August, fell this month. India Thailand Businesses reported weak demand in Asian markets, including Vietnam and Qatar. New jobs fell sharply in September, while inventories fell at the strongest pace in three months, and the 12-month production outlook slipped to its weakest point in April. Many factories closed and jobs plummeted, declining again for the first time in seven months in August. About 16 percent of companies cut their workforce, the highest number of any period since the second quarter of 2020. Imports fell sharply in September, and inventories fell to a four-month high. Depreciation pressures continued in September, with selling prices hitting record highs as import prices fell.

Source: Daily Eleven

DSC_5281-0-720x477-1

CMP garment exports worth $3.74 bln in Oct-July

Exports of garments manufactured under the cut-make-pack (CMP) system were valued US$3.74 billion in the period between 1 October and July-end in the current financial year 2019-2020. Myanmar’s manufacturing sector is primarily concentrated in CMP garments and textiles, which contribute to the country’s GDP to some extent. The garment sector is among the prioritized sectors driving up exports. The CMP garment industry has emerged as a promising one, with preferential trade from Western countries. The majority of Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into the free-on-board (FoB) system. Following the negative impacts caused by the COVID-19 on the garment industry, some CMP garment factories have shut down on the reason for the lack of raw materials, leaving thousands of workers unemployed.

The COVID outbreak and spread hit the labor-intensive businesses so severely, the Directorate of Investment and Company Administration (DICA) stated. However, foreign direct investments flow into many types of businesses, including garment enterprises. The foreign investors are not bothered by the disputes between employers and employees and the closure of some CMP businesses during the meantime. Of the investment proposals, the manufacturing and labor-intensive industries are prioritized by the commission. Myanmar Investment Commission is endeavoring to accept investment projects in manufacturing masks, pharmaceuticals and others which can contribute to the fight against the coronavirus in the country at the soonest. Supply chain disruptions and cancelling customer orders following the coronavirus outbreak hurt the global textile industry. Similarly, the CMP garment sector which contributes to 30 per cent of Myanmar’s export sector is bracing for downward trend because of the cancellation of order from the European countries and suspension of the trade by western countries amid the pandemic.
At present, all the garment factories have been temporarily closed due to the coronavirus resurgence.

The export value of CMP garments was only $850 million in the 2015-2016 financial year, but it has tripled over the last two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments. The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period. It tremendously grew to $4.6 billion in the 2018-2019FY. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US. With demand from foreign trade partners growing, imports of CMP raw materials are rising year by year. 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. The MGMA has more than 700 members, and garment factories in Myanmar, employing more than 500,000 workers. Investors prefer to invest in countries with inexpensive labor, such as Myanmar.

Source: The Global New Light of Myanmar

In this April 21, 2012 photo, young workers use sewing machines at a garment factory in Yangon, Myanmar. The European Union confirmed Monday, April 23, 2012, that it was suspending most of its sanctions against Myanmar to reward the country's recent wave of political reform. The suspension of trade sanctions could help revive the nation's industries, restoring some of the 80,000 garment industry jobs lost here over the past 10 years. (AP Photo/Sakchai Lalit)

CMP businesses-imported raw materials plummet to $1.87 bln as of 7 August

Imports of raw materials by CMP businesses have been valued at US$1.87 billion over the past ten months beginning in October in the 2019-2020 financial years, which plunged from $2 billion registered in the corresponding period of last financial year.  Myanmar’s manufacturing sector is mostly 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.

The pandemic badly batters the labour-intensive enterprises, said an official of the Directorate of Investment and Company Administration (DICA). 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 $140.49 million compared with a year-ago period. The CMP garment sector, which contributes to 30 per cent of Myanmar’s export sector, is facing hardships because of the cancellation of order from the European countries and suspension of the trade by western countries amid the coronavirus pandemic. It can harm the export sector to a certain extent, highlighted the businesspersons. 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 budget year, but it tripled within two years to reach $2.5 billion in the 2017-2018FY. During the last financial year 2018-2019, incomes from garment exports were over $1 billion higher than the previous budget year. Since an outbreak like COVID 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 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.

Source: The Global New Light of Myanmar