Posts in category: MANUFACTURING

Exports of finished industrial goods drastically plummeted to US$5.14 billion in nearly nine months (1 October-25 June) of the current financial year 2020-2021, an extreme drop of $1.86 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per figures provided by the ministry, the exports of finished industrial goods exceeded $7 billion during the same period in the 2019-2020FY. The IHS Markit Myanmar Manufacturing Purchasing Managers’ Index, a composite single-figure indicator of manufacturing performance, signalled the sharpest deterioration in manufacturing business conditions in the previous months. The higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens, causing constraints to complete the order.

It can do more harm to the foreign investment sector if the problem is still not resolved. The PMI measures the output, new orders, performance, delays in the manufacturing process and stocks of both inputs and finished goods, according to HIS Markit’s statement. The layoff is extended and the workers are forced to return to their hometowns amid the political instability and the COVID-19 resurgences. Nevertheless, the Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestseller starts to resume new orders. Additionally, Germany will also continue its support for Myanmar garment businesses so that Myanmar women can continue their livings, Germany Embassy Yangon’s Facebook posted.

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. Myanmar’s garment exports witnessed a decline of over 20 per cent in the past eight months (October-May) of the current financial year 2020-2021 compared with a year-ago period on the back of a slump in demand by the European Union market, the Ministry of Commerce stated. Myanmar’s garment industry has been facing challenges such as raw material supply disruption and cancellation of orders amid the pandemic.

Additionally, the surging COVID-19 cases posed impediments to the industry, a market observer shared his opinion. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US. 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. Yet, the current political changes in the country are likely to aggravate the garment industry, traders stressed. Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into a free-on-board (FoB) system.

As the factories cannot enter into a contract for FoB, Own Design Manufacturing (ODM) and Own Business Manufacturing (OBM), the income is limited, according to the MGMA. Exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year2019-2020, according to data from the Ministry of Commerce. Although the sector is struggling due to the cancellation of the order from the European countries and suspension of trading by western countries during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). More than 500 members and over 700 garment factories in Myanmar are listed on the MGMA, with an employment of over 400,000 workers. However, a third of garment industry workers are out of jobs in difficult times.

Source: The Global New Light of Myanmar

The majority of foreign enterprises eye the manufacturing sector for investments in the past eight months (Oct-Apr) of the current financial year 2020-2021, pumping the estimated capital of US$254 million into 23 projects, the Directorate of Investment and Company Administration stated. The manufacturing enterprises and businesses that need a large labour force are prioritized, Myanmar Investment Commission stated. At present, labour-intensive enterprises are facing financial hardship amid the COVID-19 negative impacts and political changes. Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packaging basis, and it contributes to the country’s GDP to a certain extent.

At present, Myanmar’s garment export drastically dropped on the back of a slump in demand by the European Union market. Consequently, some CMP garment factories permanently and temporarily shut down and left thousands of workers unemployed. The factories are facing cancellation of order and slump in output, new orders. However, the Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestseller starts to resume new orders.

Myanmar has drawn foreign direct investment of more than US$3.7 billion in the past eight months of the 2020-2021 financial year, including expansion of capital by existing enterprises and investments in the Thilawa Special Economic Zone, the DICA’s statistics indicated. Of 44 foreign enterprises permitted and endorsed by MIC and the respective investment committees between 1 October and 31 May of the current FY, 23 enterprises pumped FDI into the manufacturing sector. The power sector received six large projects and the livestock and fisheries sector attracted six projects. Other service sector drew five projects while the agriculture sector pulled two projects and one foreign enterprise each entered industrial estate and the hotel and tourism sectors.

Source: The Global New Light of Myanmar

Myanmar’s garment exports witnessed a decline of over 20 per cent in the past eight months (Oct-May) of the current financial year 2020-2021 compared with a year-ago period on the back of a slump in demand by the European Union market, stated the Ministry of Commerce. Exports of garments manufactured under the cut-makepack (CMP) system were valued at US$2.2 billion between 1 October and 28 May in the current FY, according to data from the Ministry of Commerce. The figures plunged from $2.7 billion in the corresponding period of the last FY2019-2020. The factories are facing cancellation of order and slump in output, new orders. However, The Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestseller start to resume new orders. Additionally, Germany will also continue its support for Myanmar garment businesses so that Myanmar women can continue their livings, posted the Germany Embassy Yangon’s Facebook.

The garment sector is among the prioritized sectors driving up exports. The CMP garment industry emerged as a promising one, with preferential trade from Western countries. Nevertheless, all cannot still expect normalcy for now due to the possible disruption in the logistics and supply sector and other serious consequences amid the political instabilities and the COVID-19 impacts, traders stressed. The Myanmar Garment Manufacturers Association (MGMA) reported in the May newsletter that 564 factories are actively running the business, and 177 has no operation. The factories include foreign investment, domestic investment and joint venture businesses. China constitutes the majority of the foreign investment with 302 factories. Myanmar’s manufacturing sector recorded an accelerated downturn in the previous months as political changes led to factory closures. The layoff is extended, and some workers were forced to return to their hometowns. Turning to prices, higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens, the HIS Markit stated.

More than 500 members and over 700 garment factories in Myanmar are listed on the MGMA, with an employment of about 600,000 workers. Women account for 95 per cent of workers in the garment industry. However, a third of garment industry workers are out of jobs in difficult times. Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on the Cutting, Making, and Packaging basis. It contributes to the country’s GDP to a certain extent. Myanmar mainly exports CMP garments to markets in Japan and Europe and the Republic of Korea, China, and the US. The export value of CMP garments was only $850 million in the 2015-2016 FY, but it has tripled over the past 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 (from April to September). According to the Commerce Ministry, it tremendously grew to $4.6 billion in the 2018-2019FY and $4.8 billion in the 2019-2020FY.

Source: The Global New Light of Myanmar

The Myanmar Garment Manufacturers Association (MGMA) reported in May newsletter that 564 factories are inactively running the business, and 177 has no operation. The factories include foreign investment, domestic investment and joint venture businesses. China constitutes a majority of the foreign investment with 302 factories. The Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestsellers starts to resume new orders. Germany will also continue its support for Myanmar garment businesses so that Myanmar women can continue their livings, Germany Embassy Yangon’s Facebook posted.

Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on the Cutting, Making, and Packaging basis. It contributes. to the country’s GDP to a certain extent. Myanmar’s garment export exceeded US$1.4 billion in the first five months (Oct-Feb) of the current financial year 2020-2021, according to the data released by the Ministry of Commerce. Myanmar’s manufacturing sector has recorded an accelerated downturn owing to the factory closure triggered by the coronavirus pandemic and the political changes. The exports of finished industrial goods drastically fell to US$4.43 billion over the first half (1 Oct-21 May) of the current financial year 2020-2021, an extreme drop of $1.69 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce.

As per figures provided by the ministry, the exports of finished goods totalled $6.13 billion during the same period in the 2019-2020 FY. The IHS Markit Myanmar Manufacturing Purchasing Manager’s Index, a composite single-figure indicator of manufacturing performance, signalled the sharpest deterioration in manufacturing business conditions in May. The higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens, causing constraint to complete the order. It can do more harm to the foreign investment sector if the problem is still not resolved. According to HIS Markit’s statement, the PMI measures the output, new orders, performance, delays in the manufacturing process and stocks of both inputs and finished goods. More than 500 members and over 700 garment factories in Myanmar are listed on the MGMA, with an employment of over 400,000 workers. However, a third of garment industry workers are out of jobs in difficult times.

Source: The Global New Light of Myanmar

Japan-based ACECOOK Myanmar Co., Ltd, which operates in the Thilawa SEZ, announced that it will be suspended from the end of June due to financial problems and difficulties to access to raw materials. ACECOOK Myanmar Co., Ltd has been distributing healthy and delicious instant noodles to the people of Myanmar since 2014. Due to the current situation in Myanmar, ACECOOK Myanmar Co., Ltd has difficulty in obtaining raw materials, difficulties in manufacturing; ACECOOK Myanmar Co., Ltd will immediately suspend the production and distribution of instant noodles from June 30, 2021 due to cash flow problems.

Therefore, starting from June 1, 2021, all office activities will be suspended and the social network (ACECOOK Myanmar Facebook Page) will no longer be able to reply to messages and answer phone calls. As of March 2021, there are 96 factories operating in Thilawa SEZ Zone A. There are a total of 122 operations in Zone B, with a total of 122, according to the Myanmar Special Economic Zone Central Committee. About $ 1.4 billion in foreign investment has flowed into the Thilawa SEZ in five years, according to the Directorate of Investment and Company Administration (DICA).

From the 2016-2017 fiscal year to the end of December 2020, up to 60 investment companies from 18 countries have invested in the Thilawa SEZ. The total investment of these projects is $ 1.382 billion. During that period, Japan invested the largest amount in the Thilawa SEZ with $ 447.367 million. Singapore is the second largest investor with $ 415.423 million. Thailand is the third largest investor with $ 175.588 million. The foreign investment in Thilawa SEZ is mainly in six sectors, including manufacturing, trade, other services, transportation, hotel and tourism and real estate.

Source: The Global New Light of Myanmar

ASEAN manufacturing output rose to a record high in Indonesia in May, with a sharp drop in Myanmar, according to the IHS Markit ASEAN PMI, released on June 2, 2021. Asean’s core PMI was recorded at 51.8 in May, down slightly from 51.9 in April, signaling the third consecutive month of growth in ASEAN production, the second-highest since July 2014. By country, the data shows uneven May data, and when Indonesia saw record growth, we saw a sharp decline in Burma. Four of the seven countries saw growth in May, said Lewis Cooper, an economist at IHS Markit. In May, Indonesia led the country-by-country growth in Asean. The PMI rose to a record 55.3, indicating gains, the survey said. Singapore has turned to growth after a slump in April. 

The PMI of 51.7 was the highest in three months, signaling a modest improvement in manufacturing conditions. Malaysia has been above the PMI for more than 50 consecutive months, but its monthly growth has slowed significantly. The Philippines’ manufacturing output was significantly stable after the April drop, with a PMI of 49.9, according to the survey. In Thailand, the situation eased in May and the PMI fell to a three-month low of 47.8. Finally, Myanmar’s manufacturing decline continued in the middle of the second quarter. The rate of decline has weakened for two consecutive months, but overall remains strong.

According to the IHS Markit Myanmar Manufacturing PMI, released on June 1, 2021, imports and commodity prices rose to record lows last May, making it difficult to complete orders, which could pose a threat to foreign direct investment, according to the IHS Markit Myanmar Manufacturing PMI, released on June 1, 2021. Asean’s overall manufacturing sector grew strongly in May. The latest development is said to have been a major contributor to both progress in production and new orders. Growth in new orders has slowed to an all-time high in eight years and remains strong, according to the survey. The study looked at seven countries including Singapore, Malaysia, Vietnam, Indonesia, Myanmar, and Philippines. The survey is based on data collected from industry by IHS Markit and sponsored by Japan-based Nikkei Media Group.

Source: Daily Eleven

Myanmar’s garment export exceeded US$1.4 billion in the first five months (Oct-Feb) of the current financial year 2020-2021, according to the data released by the Ministry of Commerce. The factories are facing cancellation of order and slump in output, new orders. However, the Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestseller starts to resume new orders. The garment sector is among the prioritized sectors driving up exports. The CMP garment industry emerged as a promising one, with preferential trade from Western countries.

Nevertheless, they cannot still expect normalcy for now due to the possible disruption in the logistics and supply sector and other serious consequences amid the political instabilities and the COVID-19 impacts, traders stressed. Myanmar’s manufacturing sector recorded an accelerated downturn in the previous months as political changes led to factory closures. The layoff is extended, and some workers were forced to return to their hometowns. Turning to prices, higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens, the HIS Markit stated. Myanmar’s manufacturing sector is concentrated mainly in garment and textiles produced on the Cutting, Making, and Packaging basis. It contributes to the country’s GDP to a certain extent.

At present, Myanmar’s garment export drastically dropped on the slump in demand by the European Union market. Consequently, some CMP garment factories permanently and temporarily shut down and left thousands of workers unemployed. Myanmar mainly exports CMP garments to markets in Japan and Europe along with the Republic of Korea, China, and the US. The export value of CMP garments was only $850 million in the 2015-2016FY, but it has tripled over the past 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 (from April to September). According to the Commerce Ministry, it tremendously grew to $4.6 billion in the 2018-2019FY and $4.8 billion in the 2019-2020FY. 

Source: The Global New Light of Myanmar

The UN Framework for Immediate Socio-Economic Response to the COVID-19 Crisis, issued by the United Nations, warns that COVID-19 goes far beyond a health crisis and that it affects the pillars of society and the economy. In 2020, some businessmen said that COVID-19, like the rest of the world, had harmed Myanmar’s economy and made it difficult for it to survive. The global economic crisis associated with the COVID-19 outbreak is another important challenge for Myanmar’s development, with significant short-term and potential long-term effects.

Many factories were shut down, and the crisis caused by COVID severely hit businesses. However, the current situation and the epidemic of the Coronavirus epidemic have hit most Burmese businesses again. The Nikkei Myanmar Manufacturing PMI (April 2021) released the Manufacturing Purchasing Managers Index for April 2021, as manufacturing operations continued to fall sharply as more businesses remained closed.

ASEAN Production Status

Asean manufacturing output rose sharply in April, with the latest IHS Markit Purchasing Managers’ Index (PMI) data peaking since July 2014, according to the April 2021 IHS Markit survey, sponsored by Nikkei. The key to the sector’s strong performance was the highest production growth since July 2014 and the strongest new orders since May 2013. At the same time, business confidence continues to grow and companies are most optimistic about production next year. Among the seven countries watching, Vietnam’s growth was the strongest, with its core PMI hitting a record high of 54.7 in almost two-and-a-half years, signaling a sharp rise. The next winner was Indonesia, whose PMI (since early 2011) reached a record 54.6, indicating a significant improvement in overall production.

For the first time in 10 months, Malaysia’s benchmark index rose above 50.0 for the first time in 10 months, as progress was also recorded in Malaysia. Thailand showed similar growth momentum in April. However, the most important PMI, 50.7, indicates moderate improvement. Among other countries, Singapore and the Philippines recorded a new decline in April. Singapore’s benchmark index (49.5) was the first decline since last September, but only a tenth. In the Philippines, the decline was the first in four months and was small, but the highest since October 2020 (the index was 49.0). Factories remain closed in Burma, and the current situation records the deepest drop among the seven countries that continue to stress over the manufacturing sector. 

The PMI climbed to a three-month high of 33.0, but still indicates a significant decline. As a result, companies are showing the most optimistic outlook for the year from January 2020, and confidence is in line with the survey’s average. Delays in deliveries were significant, but a slight increase in the average completion time after November last year indicates a easing of pressure on supply chains in the second quarter of the year. However, costs continued to rise in April and that inflation was one of the highest on record. Overall, the April PMI data points to a significant improvement in the performance of the ASEAN manufacturing sector, and there are clear signs that recovery has begun and the sector is beginning to recover from losses, said Lewis Cooper, an economist at IHS Markit.

Situation of Myanmar Manufacturing Industry

According to the Nikkei Myanmar Manufacturing PMI (Manufacturing Purchasing Managers Index) released in April 2021, manufacturing conditions across Myanmar continue to fall sharply, with many businesses continuing to close. The survey is based on original data collected from industry by IHS Markit and sponsored by Japan-based Nikkei Media Group. The survey found that all new products, orders and purchases have declined fivefold since the survey began in December 2015. Looking at prices, inflationary pressures continue to be significantly stronger than the kyat-dollar exchange rate, and raw material shortages are blamed on rising costs. 

However, at the beginning of the quarter, large companies chose to shift only part of the cost increase to buyers. Key IHS Markit Myanmar Manufacturing PMI: The only indicator of manufacturing performance, rising from 27.5 in March to 33.0 in April, indicates an eight-month slump in operating conditions in Myanmar’s manufacturing sector. While both products and new orders fell five times faster in survey history, inventory and jobs fell by a record three to four times, respectively, according to the April survey data. The April data confirms unsatisfactory results at the beginning of the second quarter and operating conditions in Myanmar remain negative. The key PMI index is relatively good, but still the lowest in the survey’s five-and-a-half-year history.

The closure of factories in April also saw a significant drop in new products and orders. One of the concerns is the strong inflationary pressures that have grown in the last two months. The depreciation of the kyat against the dollar has increased the cost of buying foreign goods. At the same time, trade difficulties have left large companies with a huge cost burden. In addition, production continued to fall sharply as most factories in key areas remained closed. The rate of decline has been weaker than in the previous survey period, but has fallen fivefold in the survey so far. About 60 percent of companies reported lower production in April than in March. The closure of customers has weakened overall demand with eight consecutive months of declining new orders, and the decline was significant and the strongest in survey history. With the temporary closure of most factories in April and the return of workers to their hometowns, jobs across the sector plummeted. 

Procurement fell sharply in April, despite rising from its lowest level in March. Shortage of raw materials; The combination of bad exchange rates and rising transportation costs has led to the highest inflation rate of import prices since November 2018. Sales prices rose modestly in April as weak demand made it difficult for large companies to shift the burden of costs. Looking to the future, companies generally expect product output to rise in April 2022, but overall their expectations are the weakest in more than two years. However, business owners, according to officials, In Hlaing Tharyar Township, which has the largest number of workshops, about 80 percent of the factories have reopened. Factory in Hlaingtharya township; about 80 per cent of the workshops have reopened, and some factories have not received orders, and when they are temporarily closed, there have been complaints about legal action.

In addition, there are factories and factories in Shwelinban Industrial Zone, Hlaingtharya Township. About 60% of the workshops were reopened. According to an official from the Shwelinban Industrial Zone Committee, most of the workers have returned to their homeland despite the opening of the factories. About 60 percent of the factories have reopened. The workers are not all down yet. Only 40 percent went up. Conditions are good. There is no problem. There are only one or two complaints about not being able to pay salaries. In the case of a factory that caught fire, a date has been set for payment of wages, ”said Aung Ngwe, an official from the Shwelinban Industrial Zone Committee. However, an economist said it was not easy to predict a recovery in Myanmar’s manufacturing sector, as key business investors had suspended operations until the current situation stabilized and investors’ confidence was restored.

Source: Daily Eleven

Due to the current situation, both production and new orders in Myanmar’s manufacturing sector fell fivefold in April, according to the IHS Markit Myanmar Manufacturing PMI released on May 3 The April PMI data show that manufacturing conditions across Myanmar are declining sharply, with many businesses continuing to close due to the current situation.

Purchasing Manager’Index (PMI) New orders Workplace Five indicators are calculated: suppliers’ delivery time and stockpiles. Of the five PMI segments in Myanmar (excluding supply delays), the other four fell, according to the survey. Both products and inventories fell by a record five times faster in survey history, while inventories and jobs fell three to four times faster, respectively. Key IHS Markit Myanmar Manufacturing PMI: The only integrated index that shows manufacturing productivity, rising from 27.5 in March last year to 33 in April, indicates an eight-month decline in operating conditions in Myanmar’s manufacturing sector.

Expectations for the next 12 months, meanwhile, fell further in April. Looking to the future, big companies generally expect product growth to increase in April 2022, but overall their expectations are the weakest in more than two years. In April, large companies’ production fell about 60 percent from March. Shortage of raw materials; The combination of poor exchange rates and rising transportation costs Imports have hit record highs since November. Sales prices rose modestly in April as weak demand made it difficult for large companies to pass on cost burdens. The survey is based on original data collected from industry by IHS Markit and sponsored by Japan-based Nikkei Media Group.

Source: Daily Eleven