Posts in category: MANUFACTURING

As a result, Myanmar’s manufacturing PMI fell to a record low in March, lowering the number of new products and orders, and a record number of pending jobs, according to the IHS Markit Myanmar Manufacturing PMI released on April 1, 2021. Due to the current situation, in March, the last month of the first quarter, Myanmar’s manufacturing sector declined significantly and factories and customers remained closed. At the same time, volatile demand led to a near-record decline in the workforce, during which time factories remained closed, leading to the largest number of unfinished jobs in survey history.

Due to COVID-19, factories continued to close and companies plummeted due to a sharp drop in new jobs in September 2020, and the current situation has exacerbated the situation as workers have been forced to return to their hometowns. According to the IHS Markit Myanmar Manufacturing PMI, the key indicator of productivity, Myanmar fell from a record low of 27.7 in February 2021 to 27.5 in March. The survey also signals the worst decline in manufacturing since December 2015, when the survey began. In addition, even though the number of new orders has decreased, the number of unfinished projects has been the largest in the survey history. 

During this period, new orders fell and demand volatility in the coming months forced companies to cut both pre-production and post-production inventories. Inflationary pressures intensified last March due to a shortage of raw materials and a weak exchange rate from the dollar to the kyat. Overall, weak demand is exacerbated by the fact that companies have been able to raise their selling prices modestly because they have not been able to bear the burden of their costs. According to the survey, production volume expectations for the coming year reflect weak demand. Confidence has fallen since September 2020, falling far below the survey’s long-term average. The survey is based on original data collected from industry by IHS Markit and sponsored by Japan-based Nikkei Media Group.

Source: The Global New Light of Myanmar

Myanmar’s manufacturing sector recorded an accelerated downturn in February 2021 as political changes led to factory closures. The IHS Markit Myanmar Manufacturing Purchasing Managers’ Index measures the seven-month low in output, new orders, purchasing and stocks of both inputs and finished goods, stated the IHS Markit on 1 April 20201. The layoff is extended, and the workers are asked to return to their hometowns amid the political changes. The HIS Markit stated that higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens. Exports of finished industrial goods drastically plummeted to US$3.209 billion between 1 October and 19 March in the current financial year 2020-2021, a severe drop of $1.7 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per the ministry figures, the exports of finished industrial goods totalled $4.9 billion during the same period in the 2019-2020FY.

Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, contributing to its GDP to a certain extent. Myanmar’s garment export dropped by over 25 per cent as of the first quarter of the current FY compared with a year-ago period on the back of a slump in demand by the European Union market, according to the Ministry of Commerce. At present, the CMP garment factories 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 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. Myanmar’s garment factories operate under the CMP system. Those engaged in this industry are striving to transform CMP into the free-onboard (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.

According to data from the Ministry of Commerce, exports of garments manufactured under the cut-make-pack (CMP) system were valued US$4.798 billion in the last financial year 2019-2020. Although the sector is struggling due to the cancellation of order from the European countries and suspension of Western nations’ trade during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). 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). It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. That is why 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 500 members and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar

Exports of finished industrial goods drastically plummeted to US$3.137 billion between 1 October and 12 March in the current financial year 2020-2021, a severe drop of $1.66 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per the ministry figures, the exports of finished industrial goods totalled $4.79 billion during the same period in the 2019-2020FY. Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on the Cutting, Making, and Packaging basis, contributing to its GDP to a certain extent.

Myanmar’s garment export dropped by over 25 per cent as of the first quarter of the current FY 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 orders’ cancellation amid the pandemic. Additionally, the current political changes dragged down the sector, a market observer shared his opinion. At present, the CMP garment factories 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 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 country’s current political changes 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 the 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.

According to data from the Ministry of Commerce, exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year 2019-2020. Although the sector is struggling due to the cancellation of order from the European countries and suspension of Western countries’ trade during the pandemic, export values rose in the previous FY (1 October 2019 30 September 2020). 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). It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. That’s being so, 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 500 members and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar

EXPORTS of finished industrial goods drastically fell to US$3 billion between 1 October and 5 March in the current financial year 2020-2021, a severe drop of $1.64 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per the ministry figures, the exports of finished industrial goods totaled $4.68 billion during the same period in the 2019-2020FY. Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, contributing to the country’s GDP to a certain extent. Myanmar’s garment export dropped by over 25 per cent as of the first quarter of the current FY 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 orders’ cancellation amid the pandemic. Additionally, the current political conditions would drag down the sector, a market observer shared his opinion. At present, the CMP garment factories temporarily shut down and left thousands of workers unemployed. Myanmar mainly exports CMP garments to markets in Japan and Europe and 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 country’s current political changes 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 the 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. According to data from the Ministry of Commerce, exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year 2019- 2020. Although the sector is struggling due to the cancellation of order from the European countries and suspension of Western countries’ trade during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). 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). It tremendously grew to $4.6 billion in the 2018- 2019FY, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. That being so, 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 500 members and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar

Exports of finished industrial goods drastically fell to US$2.9 billion between 1 October and 19 February in the current financial year 2020-2021, a severe drop of $977 million 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 totalled $3.88 billion during the same period in the 2019-2020FY. 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 export dropped by over 25 per cent as of the first quarter of the current FY 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 current political conditions would drag down the sector, a market observer shared his opinion. At present, over 100 CMP garment factories temporarily shut down the reason for the lack of raw materials and a slump in demand due to the coronavirus negative impacts, leaving thousands of workers unemployed. Sixty-four factories have been permanently closed down during the pandemic, compensating about 25,000 workers. The data does not include those factories that have not resolved worker payments, the Ministry of Labour, Immigration and Population stated.

The labour-intensive enterprises are badly battered by the coronavirus impacts, the Directorate of Investment and Company Administration stated.
Under the EU Myan Ku Fund, we have now distributed K5.2 billion in support across 67,810 payments to unemployed garment factory workers as of 12 October 2020. Workers in all the states and regions of Myanmar have received this financial assistance. Next, foreign direct investments flow into many types of businesses including garment enterprises, the Myanmar Investment Commission stated. Of the investment proposals, the manufacturing and labour-intensive businesses are prioritized by the commission. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US.

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. 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 owing to the cancellation of the order from the European countries and suspension of the trade by western countries amid the pandemic, export values rose in the previous FY (1 Oct 2019-30 Sep 2020). 

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). It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry. 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 500 members, and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar. 

Source: The Global New Light of Myanmar

According to the Index Purchasing Manager of Nikkei Myanmar Manufacturing PMI (Manufacturing Purchasing Managers’ Index for February 2021), Myanmar’s manufacturing sector hit a record high with production and new orders. Due to the political events that took place on 1 February, political instability in Myanmar following the closure of factories and the manufacturing sector recorded a rapid decline. Due to the low demand, the number of new orders, purchases, imports and stocks set new records. According to the state of emergency declared on 1 February, workers return to their homes and transportation conditions became more difficult. Although the outlook for the future is positive, the optimism level is from the highest in the 11th month of January to fell moderate.

When it comes to prices, commodity prices from the burden of expenses rise sharply due to foreign exchange speculation. Myanmar’s PMI for February is 27.7 and manufacturing conditions signal a sharp decline since it fell from the January index of 47.8. Decline of 20.1 within one month is the strongest from the beginning of the survey five years ago to the present day. Due to the state of emergency declared on 1 February, factories and demand were shut down. In the calculation of the main index production, up to 65% of all indicators for new orders and imports hit a low record in February while 20% recorded employment rate was the third-largest drop in record number.

The 15% supply delivery period continued to grow (as supply chain pressures were always associated with increasing demand), allowing the PMI to depreciate as a whole. Companies reported lower orders received this month, while others reported customer closures. As a result, the rate of decline was the highest in the five-year period of the survey, higher than the highest decline last October. About 70 percent of companies reported a drop in production this month as factories shut down. As a result of declining productivity, companies cut staff in the last month. Respondents also reported that the workers had returned to their homes. Overall, there is a fair amount of surplus work due to weak demand and a shortage of manpower.

Purchases of imports fell sharply due to a record drop in new employment. Market research has pushed up commodity prices due to scarcity of raw materials and worsening exchange rates. Companies have tried to shift the burden of costs by slightly raising their selling prices. Procurement conditions declined in the worst case scenario due to shortages of raw materials and blockades of shipments. Over the next 12 months, the level of productivity optimism fell to a five-month low. Shreeya Patel, an economist at IHS Markit who conducted the survey, said the declaration of a state of emergency on February 1 only exacerbated the challenges facing Myanmar’s manufacturing sector. The survey is based on original data collected from industry by HIS Markit and sponsored by Japan-based Nikkei Media Group.

Source: Daily Eleven

According to the Nikkei Myanmar Manufacturing PMI (Manufacturing Purchasing Managers’ Index for January 2021), Myanmar’s manufacturing sector is still suffering from lockdown restrictions and production is still weak due to low demand. Manufacturing in Myanmar deteriorated further at the beginning of 2021. Due to continued restrictions imposed to control the spread of COVID-19, factories closed and production fell for five consecutive months. New orders fell for the fifth straight month, but were the slowest in the series, with job cuts continuing across the industry.  Declining production has led companies to control purchases and imports have plummeted.

 However, plans to expand the business boosted optimism in January and peaked in 11 months. Looking at prices, inflationary pressures have risen sharply due to a shortage of raw materials. Sales prices have risen sharply, indicating a limited burden of costs on shoppers. Myanmar’s PMI for January was 47.8, and the rise from December’s 44.7 indicates a weakening of the manufacturing sector. Production fell for the fifth straight month in January, but was the weakest for the second slump, which began in September. Most of those who pointed out the closure of factories and the weakening of demand. Reflecting the order of production, new orders received by producers in Myanmar fell at a slower pace, the latest slowing in the current five-month slump.

 Lockdown restrictions put pressure on demand, according to respondents. Companies that have documented growth report new customers and new arrivals. Despite low output, there were still signs of pressure on productivity, and inventory concentrated significantly in January. Producers continue to suspend hiring efforts, extending the current cut-off rate to five months. Some respondents reported that the workers had returned to their hometowns. Producers continued to be wary of inventories in January as efforts to rebalance stocks as demand weakened. As a result, pre-production and stockpiling of goods was significantly depleted.

Inflation of costs is the highest since November 2018. Suppliers have pushed up prices due to scarcity of raw materials and rising shipping costs. Producers decided to raise factory prices in January, but some companies cut prices to boost demand, and overall inflation was not significant. Looking to the future, respondents are optimistic. Shreeya Patel, an economist at IHS Markit who conducted the survey, said that the January survey, which recorded a further decline in Myanmar’s manufacturing sector, indicates a slump in 2021. Weak demand and factory closures have been linked to lower production and new orders. At the same time, job cuts continue and imports are plummeting. The survey is based on original data collected from industry by IHS Markit and sponsored by Japan-based Nikkei Media Group.

Source: Daily Eleven

In November 2020, the second wave of the COVID-19 epidemic closed car showrooms and manufacturing plants in Myanmar, leaving no brand new car sales or production, according to regional car sales and production data released by the ASEAN Automotive Federation. The ASEAN market as a whole saw sales of 256,158 new cars in November 2020, down 13.9 percent from the same period last year, with Myanmar down 100 percent. In 2017, 8225 brand new cars were sold in Myanmar, more than 97% more than in 2016. In 2018, there were 9,299 vehicles compared to the same period in 2017. Sales increased by 113% to 17,524 vehicles in 2018.

In the Myanmar market, 4,392 vehicles were sold in 2019 compared to 2018, with 21,916 new cars (an increase of 25.1%). In January 2020, 2034 new cars; In February, 2,286 vehicles; 1979 were sold in March, and showrooms closed in April due to the first wave of COVID-19. 1253 in May; 1985 in June; 2258 vehicles in July; In August, 2,238 vehicles were sold. Due to the second wave of COVID-19, only about half of the showrooms opened in September, selling only 1,112 units, and closed again in October and November. In 2016, 4,168 new cars were sold in Myanmar. In 2018, more than 17,000 new cars were sold, and in 2019, nearly 22,000 new cars were sold. 

Myanmar is an emerging market for the sale and production of new cars, and growth is expected to continue year on year. Despite the continuous growth of new car production in Myanmar, as well as the growth of new car sales, car assembly production declined during the COVID-19 period. In January 2020, 1,459 vehicles; 1388 in February; In March, 1214 units were produced, and in April, the first wave of COVID-19 shut down car factories. 703 in May; 1313 vehicles in June; In July, 1,438 vehicles; In August, 1,558 vehicles were produced. Due to the second wave of COVID-19, the plant was operational for about half a month in September, producing only 1,587 units, and in October and November, the second wave of COVID-19 shut down car factories. 

Six ASEAN countries, including Myanmar, are involved in the production of new car assemblies. Myanmar will increase by more than 320% in 2017; In 2018, it will be close to 150 percent. In 2019, it increased by more than 24%. The Asean market as a whole saw 325,242 new car assemblies in November 2020, down 4.6 percent from the same period last year, and Myanmar was down 100 percent from the same period last year. The number of new cars assembled in Myanmar in 2017 was 4,930, an increase of 3,788 units from 2016, an increase of 328%. In 2018, 12,292 cars were assembled, an increase of 7,362 from the previous year, an increase of 149%. In 2019, 15,496 cars were assembled, an increase of 3,204 from the previous year, an increase of 26%.

Source: Daily Eleven

The Yangon Region Investment Committee (YRIC) has endorsed four foreign enterprises from China, Japan, Singapore and Hong Kong SAR in the manufacturing sector, with an estimated capital of US$12.7 million, in the four months (Oct-Jan) of the current financial year 2020-2021. Additionally, one domestic enterprise is also given the go-ahead, with the capital of K2.9 billion. Those enterprises are to create over 3,700 jobs.

They will execute manufacturing of bags, footwear, underwear and garments on a Cutting, Making, and Packing (CMP) basis and production of pulses and beans, and production and distribution of fish sauce, YRIC stated. Between 1 October and 30 September of the previous financial year 2019-2020, Yangon Region attracted FDI of $308.768 million from 137 foreign enterprises. The manufacturing sector has attracted the most foreign investments in Yangon Region, with enterprises engaging in pharmaceuticals, vehicles, container boxes, and garments on a Cutting, Making, and Packing (CMP) basis.

To date, foreign investments from China, Singapore, Japan, Hong Kong, the Republic of Korea, Viet Nam, India, China (Taipei), Malaysia, the British Virgin Islands, and Seychelles arrive in the region. To simplify the verification of investment projects, the Myanmar Investment Law allows the region and state Investment Committees to grant permissions for local and foreign proposals. The initial investment does not exceed K6 billion, or $5 million.

Source: The Global New Light of Myanmar

According to the Myanmar Garment Manufacturers Association (MGMA), various ASEAN countries, including Myanmar, are discussing the economic situation and impact of the garment industry due to the ongoing COVID-19 in their countries. ASEAN Federation of Textile Industries (AFTEX) Indonesia Laos Malaysia Singapore Philippines Thailand The ASEAN Economic Community (AEC) and the ASEAN Economic Community (AEC) have agreed to increase cooperation in various fields. COVID-19 conditions and effects; International investment conditions. They also discussed the export and import conditions of garment industries in various countries and their cooperation with their governments.

Central executives and executives of the Myanmar Garment Manufacturers Association (MGMA) also discussed Myanmar’s export and import situation in 2020. During COVID-19, MGMA provided services for member factories. They also discussed the assistance provided by the Myanmar government to garment factories. According to the Position Paper released by the Myanmar Garment Manufacturers Association, 114 factories were closed or temporarily closed during COVID-19, and currently only 606 are in operation, 90 percent of which are mainly export-oriented. Difficult access to raw materials in the garment industry. Decreased or suspended orders and late or non-receipt of payments. Some companies go bankrupt.

According to a survey conducted by the Myanmar Garment Industry, most of the orders are pending until July, with only 30 per cent of members receiving orders from September. However, the garment sector was affected by the economic situation in the countries with the highest orders. When it comes to export orders, they have become more of a problem than buying from other countries. Currently, Myanmar’s largest exporter is Japan. Germany is second. In terms of blogging, the 28-nation EU has the most. The US is buying now. However, Korea, not as many as Japan, given the domestic situation in Korea, its economy is declining. There is also the fear of COVID. So when those countries have limited access to their offices, they also have limited access to Myanmar. It is also noted that the highest number of cases of corona virus are the countries order from Myanmar, so that the economic impact and challenges of Myanmar were a challenge.

Source: Daily Eleven