Wednesday, June 13, 2012

Burma’s clothing industry in downturn

Wednesday, 13 June 2012 12:28 Phanida

Chiang Mai (Mizzima) - The world economic decline has caused the value of Burma’s clothing export sector to drop around 30 per cent since 2008, according to the Myanmar Clothing Manufacturers Association (MCMA).

Compounding the fall is Europe’s tariff on clothing imports from Burma when Bangladesh, Cambodia and Vietnam receive exemptions, said Myint Soe, the MCMA chairman.

Also, “the dollar is weak and the kyat is strong,” he said. “Our business are not good in both 2011 and 2012. Sometimes we suffered financial losses and sometimes we broke even, and sometimes we got a little profit. That’s the way we operate. Our businesses cannot grow,” Myint Soe told Mizzima.

About 1,200 workers at the Myanmar Sunny clothing factory in the Hlaing Tharyar industrial Zone No.2 in Rangoon Region went on strike seeking higher salaries and other benefits. Photo: Min Min Oo / Mizzima

Myint Soe said that Burma’s clothing industry needed to attract more market share, increase productivity and hope for a stronger dollar. “We should get a tariff exemption also,” he said.

Another factor that pressures productivity is electricity supply. “Sometimes we get [government] electricity and sometimes we get electricity from diesels [own generator],” he said. He said a worker in Vietnam can produce 20 shirts per day while a Burmese worker produces 10 shirts.

The currency exchange rate was 1,200 kyat per US$ 1, he said. Now, the exchange rate is stable around 850 kyat per $1.

He said contracts come from Japan, Korea, Europe and South America. Raw materials are bought mainly from China and some Asian countries.

Recently, he noted that there were successive workers’ strikes for higher salaries. He said with the downturn it is difficult for some companies to meet workers’ demands.

“We hope that the U.S. and Europe will reduce tariffs in the next three months. If our hope comes true, we can run our businesses. I told the workers that if the situations became worse and the dollar weakens against the kyat, we would not be able to meet the workers’ demands,” he said.

On Tuesday, Derek Tonkin, writing on the Network Myanmar website, said that in the years leading up to the U.S. import ban, over 80 per cent of U.S. imports from Burma were garments. "The effect of the import ban introduced in 2003 was to cause serious damage to the Myanmar garment industry, which had been struggling to survive and which was overwhelmingly owned by private non-crony entrepreneurs," he said. "Some 50,000 mostly female workers became unemployed. The ban represented and still represents no leverage of any kind on the government except to aggravate their endeavours to support poverty alleviation."

On June 5, government ministers, 88-generation student group leaders, workers rights activists and members of the MCMA met to discuss recent wage demands with the Rangoon Industrial Zone Management Committee.

Myint Soe said businesses offered an eight-hour working day and higher salaries, which the workers’ accepted in principle. Most workers in the clothing industry are female. Their salary rate ranges from 45,000 to 60,000 kyat (US$ 75) a month.

Regarding the recent workers’ strikes, Myint Soe said settlements were negotiated in five factories. Some negotiations are still underway.

Most of the clothing factories are located in Rangoon Region and Pegu (Bago) Region. Burma has 120 clothing factories, he said.

Leave a Reply