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Six and-a-half million dollar garment sector deal
May Kyaw
Friday, 04 September 2009

Chiang Mai (Mizzima) – Owners of Burmese (Myanmar) garment factories and the Turkey Tema Group negotiated a 6.5 million dollar garment deal in Rangoon.

The Turkish Textile Group ‘TEMA’ will place on order on CMP (cutting, manufacturing and packing) system starting next year, which is to last six months.

“The Turkey Group held a press conference at Innya Lake Hotel on August 19 and the Burma Garment Factories Association arranged a meeting between the foreign companies group and Burma Garment Factories owners. They negotiated a business deal,” Burmese Garment Factories Association source said.

He said the meeting held at Inya Lake Hotel on August 19.

“It will be interesting to see if they will renew their order next season. The agreement is not for the whole year. It is just on a trial basis,” a Shwepyitha (industrial zone) based garment factory owner said.

“The agreement has been signed but we don’t know yet how to share this order among us. We must give a part of this order to factories related to the government,” he said.

Some garment factories in Burma had to stop operations due to poor orders after the global economic slowdown. Also Burmese garment business could not compete with Vietnam, Cambodia and Bangladesh where labour costs are cheaper.

“The garment industry in Burma now is just keeping its head above water. Most of our orders moved to Vietnam, Cambodia and Bangladesh,” a member of the Burmese Garment Factories Association said.

This deal will not change the garment business but it will help keep it going despite having no orders from Germany and France, garment factory owners said.

“The order is not much for our industry. But we can keep our workers with this order,” a garment factory owner from Shwepyitha industrial zone said.

The Turkish company group will supply raw materials and Burmese factories will do the cutting, sewing and packing. They will fetch an average of USD 5 for each piece of garment.

The garment industry in Burma employs mostly young women from rural areas and they can get an average of Kyat 30,000 to 45,000 per month with a basic salary of Kyat 15,000 a month.

Besides the economic sanctions imposed by the US, the garment industry in Burma is facing a lot of difficulties such as inadequate electrical supply, and difficulties in transport and communication, the Burma Garment Factory Association Chairman Myint Soe said in his presentation ‘The situation of Burmese Garment Industry 1997-2006’.

The Burmese garment industry which works mainly on a CMP basis earned USD 829 million in 2001 and then fell to USD 314.4 million in 2005. According to factory owners, the garment industry in Burma barely survive.

mizzima.com

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