Myanmar garments factories closed down after major orders from EU market canceled

Photo: Myanmar Garment Manufactures Association

More garment factories in Myanmar stopped operations as European Union countries, a major export market, cancelled orders last week amid the spread of the COVID-19 pandemic.

The EU market accounts for 70 percent of the country’s garment export.The bad news of cancellations came shortly after the supply of raw materials from China started to flow back into Myanmar. The garment supply shortage cause was a three months shut down policy due to the virus outbreak.

U Myint Soe, chair of Myanmar Garment Manufacturers Association (MGMA) and a senior industry leader, said “After our country began to receive raw materials again from China, we have no more raw materials problem.”

“Now, the EU no longer accepts our garment exports, all factories operations that have accepted orders from the EU countries have stopped. Everything happened since last week,I don’t know how we will deal with this issue.”

“As COVID-19 spread in Europe, all shops closed there. Garment factories in Myanmar face difficulty as they told us not to make their clothes, which they have bought, and not to ship them. This problem is big. That’s why, factories have shut down and reduced their number of workers,” he added.

Daw Sandar Min, a Yangon regional MP, said  “Another garment firm, the Lat War Co. Ltd., is stuck with 500,000 pieces of garments after a European buyer cancelled the order. Other companies in the same predicaments are Gold Emperor, Hong Text,Global Apparel Textile Myanmar Co. Ltd, and Myanmar Irrawaddy.”

Before the cancellation of orders from the EU, at least 20 out of the 500 factories in Myanmar have shut down due to the pandemic, leaving more than 10,000 workers unemployed, industry sources said,according to Myanmar Times.

Since January, 38 cut-make-pack factories that includes the garment factories, have shut down, according to the Ministry of Labour, Immigration and Population. Among these were 22 garment factories. Others reduced the number of workers at their facilities.

The shutdown of more garment factories led to more labour unrest, including the strike at the Grand Enterprises Garment Co. Ltd at Yangon’s East Dagon Industrial Zone on 26 March 2020 as the company announced a layoff of thousands of workers.

U Myint Soe said besides the EU, the US market has also started cancelling its orders.

So far, Japanese and Korean companies have not cancelled their orders.

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