Foreign Investors Wait At The Doors for Special Textiles Zone
The Myanmar Investment Commission (MIC) has received proposals from companies in Hong Kong and South Korea to invest in a planned special economic zone for textiles and garment industries, according to a top official.
The foreign firms are ready to launch their operations but the authorities are still working on selecting a site for the zone, so the investors are still waiting, according to U Aung Naing Oo, secretary of MIC and director general of Directorate of Investment and Company Administration (DICA).
“The proposed investment is still in the negotiation phase. If we are ready for the economic zone, they are ready to launch the investment. We are still choosing a suitable land area [for the project],” U Aung Naing Oo said.
Earlier in September, Myanmar Business Today first reported about the Ministry of Industry’s plans to set up an exclusive zone for textile and garment businesses.
The Ministry has been attempting to implement a special economic zone since August to organise all the textile and clothing related businesses in one place. The Union government has pledged to provide 3,000 acres of land for the zone.
Tadar Oo Township in Mandalay Region was first mooted as the location for the special zone but poor transportation infrastructure there has forced the Ministry to look for a better location.
“[The investors] are ready to launch their investment at any location. But we will have to implement the zone in the area that is provided by the government. The zone have to be closely accessible to water transportation infrastructure like ports. Yangon and Bago regions will be the proper location for the zone,” U Aung Naing Oo said.
There are 171 locally-owned factories, 196 foreign-owned factories and 22 joint venture factories with a total workforce of 300,000 in Myanmar’s garment sector. All the factories in the country practice Cut-Make-Pack (CMP) system, where the foreign buyers pay contracting fees to a garment factory to carry out the labour-intensive task of cutting the textile fabric, sewing garments together according to design specifications and then packing the garment for export to international markets.
Myanmar’s garment products are mainly exported to Japan, South Korea and the EU. The recent reinstatement of the generalised system of preferences (GSP) benefits by the United States is expected to double the volume of Myanmar’s garment exports, according to Myanmar Garment Manufacturers Association.
Source: Myanmar Business Today