Burma - New Hot Spot In Textile Industry Investment

The Lancang Mekong River cooperation mechanism is a new subregional cooperation platform jointly launched by China and Vietnam, Burma, Laos, Thailand and Kampuchea. It has a close interaction with the "one belt and one road initiative" and is also an important regional platform for the construction of "one belt and one road". Burma is an important node of "one belt and one road". It is also an important member of the Lancang Mekong River cooperation mechanism. It has broad prospects for deepening cooperation and complementary advantages. In order to continuously promote the productivity cooperation of the textile and garment industry in Lanmei region, the China textile international capacity cooperation enterprise alliance, the China Textile Industry Association and the China Council for the promotion of international trade, the textile industry branch, headed by Zheng Junlin, vice president of China Industrial Textiles Association, on 12-14 August, went to Burma to conduct investment research activities. The backbone enterprises of the industrial association's line Association: Zhejiang's three Ting, Fujian Rong Shu, Dongguan Yongheng, Shanghai Jiang line, Zhejiang Zhejiang Asia, Kaiping sail, Dongguan Jiayi, Xiamen Yao Ming, Xiamen herd, Zhongshan Yongli, etc.

01

Discussion with chamber of Commerce of Chinese enterprises in Burma

The delegation held talks with Luo Jun, executive vice president of Burma chamber of Commerce of Chinese enterprises and Luo Muzhen, deputy secretary general.

Luo vice chairman introduced that in February 2017, with the leadership and support of the Chinese Embassy in Burma, the Burma chamber of Commerce of Chinese enterprises was reorganized and officially registered in November of the same year. At present, 300 members have set up 7 branches, including textile and garment, real estate and construction, ICT communications, agriculture, electricity, tourism and services. The purpose of the chamber is to build an important platform for Chinese Burmese funded enterprises to communicate, coordinate and cooperate with the government departments of China and Myanmar.

Deputy Secretary General Luo said that before 2004, the clothing industry in Burma was more developed, but because of the sanctions imposed by western countries, the garment industry in Burma was in a long-term recession. In 2012, Burma promulgated the foreign investment law and formulated investment rules for the garment industry to encourage the development of foreign garment industry. With the lifting of economic sanctions in Europe and America and more and more Chinese enterprises starting to invest and build factories in Burma, Burma's textile and garment industry has grown significantly and trade scale has also increased rapidly. However, the unbalanced development of Burma's textile and garment industry chain is prominent at present. The garment industry is growing rapidly. The upstream industry of textile industry develops slowly, and the scale is obviously smaller than that of the garment industry. The textile industry in Burma is dominated by garment processing. There are no large textile factories and dyeing factories. The raw materials such as yarns and fabrics are mainly imported. China is the main source country of raw materials import. By the end of July, there were about more than 600 garment factories in Burma, and more than half of foreign and joint ventures were involved. Chinese enterprises were the main force, accounting for about 60% and about more than 300 enterprises. These garment factories are mainly concentrated in the Yangon area. He introduced:

The advantage of investing in Burma lies in:

Bilateral relations between China and Myanmar are developing well.

Burma enjoys the GSP policy granted by EU and Japan.

Foreign investment can get a 3-7 year tax exemption policy.

Burma has an obvious demographic advantage - 65% of the nearly 53 million people are working age, and half of them are women who are favored by the clothing industry. The Burmese people attach importance to their families and learn to be adaptable. The labor cost is low, the minimum wage is about 654 yuan / month, plus 2 hours overtime and other welfare is about 1500 yuan per month.

The cost of electricity is relatively cheap, which is about 0.9 yuan per kilowatt hour.

The main industrial park is about 0.5-1 hours away from the port and airport, with convenient transportation.

Enterprises do not need to provide accommodation for employees, and reduce management costs, but they need to provide places for eating.

Good social order and plain manners.

The China Myanmar railway is under exploration stage. It started in the Burma City, Mu Jie, from the Mandalay junction to the South and the capital Naypyidaw to Yangon. The entire railway line has a total length of 430 highways, and is expected to be completed in 2021.

Challenges for investing in Burma:

The infrastructure is not perfect, especially the lack of electricity, poor transportation facilities and serious traffic congestion.

Financing channels are scarce and bank financing is difficult.

Lack of localization management talents and low skills of workers, enterprises need skills training for their employees.

The industrial chain is incomplete, the main accessories and accessories depend on imports, and secondary accessories such as cartons, tapes, lines, and some shipping marks can be purchased locally.

The workshop has a high rent: about 2-3 US dollars per square meter, foreigners can not buy land, and can invest in industrial parks for 50+20 years.

Burma's social system, language, cultural differences and trade union system are all problems that enterprises need to face.

02

Visit to Heng Tian (Yangon) Garments Co., Ltd.

In November 2014, Heng Tian (Yangon) Garments Co., Ltd. settled in the Shui Ling ban industrial area near Leda District, near Yangon. The first factory was built in June 2015, with a staff of 1000 people, 24 sewing lines, a capacity of 600 thousand pieces / month, products exported to Europe and China; second factories built in May 2016, 2000 employees, 44 sewing lines + 20 prints + embroidery 10, the capacity is 1 million 200 thousand / month, and products are exported to Japan and Europe. At present, the factory covers an area of 42 thousand square meters, and the current number is 3000. Among them, 31 are Chinese managers, with 68 production lines, with an average production capacity of 1 million 800 thousand pieces per month. Third factories have been built, 35 sewing lines, 60 printing lines, 30 embroidery machines, and the staff are expected to recruit 1500 people. The products are mainly exported to Japan and Europe. Heng Tian enterprise plans to form a garment factory scale by 2020: about 11000 employees, 230 garment production lines, 10 million production capacity / month, fabric factory scale: 6 production lines, production capacity of 1000 tons / month.

General manager Yan Qiuhong said that the main business is the strike movement. In order to prevent strike fundamentally, companies and trade unions establish regular trade union meetings and dialogue mechanisms to ensure that enterprises understand the views and needs of trade unions in a timely manner and conduct constructive interaction with trade unions to properly handle the relationship between employers and labour or ILO. In order to prevent staff turnover, the company takes full account of the living habits of Burma employees, such as water splashing Festival, Lantern Festival, Moon Festival and other traditional holidays in Burma. The company respects employees' beliefs and sets up a Buddhist hall in the company to facilitate staff's daily gift. Employees marry, children run full moon wine, and the company sends them blessings and gifts. Through these real and deeply caring actions, the company has become the second trusted member of the Burmese staff. In 2018, the company released its first overseas factory social responsibility report on the basis of the United Nations sustainable development goals.

03

Research star Li Ya Yangon commercial city

Singapore Star Li Ya group is committed to the development, construction and operation of overseas trade infrastructure, and integrates the comprehensive service functions such as commodity display, purchasing trade, exhibition marketing, living and living. Based on the International Trade Center Singapore, the group has 16 overseas projects in the world, and its land reserves exceed 6 billion, which are located in Southeast Asia emerging countries such as Burma, Kampuchea, Thailand, Indonesia, Philippines, Vietnam and Malaysia, Dubai and the United States, Canada, Australia and other developed countries and regions.

Star Li Ya Yangon Trade City project covers an area of 720 thousand square meters, with a building area of over 3 million square meters. It is located in the Yangon special economic zone of Yangon, 15 kilometers away from the center of Yangon, and 16 kilometers from the international port of Yangon port. It is a key development area in Yangon. At present, the Yangon commercial and Trade City has entered the stage of project construction and investment promotion, and the market property is self-sustaining, and shops are only rented for sale. The industry of inviting business includes: textile leather, accessories and accessories, bags and accessories, clothing shoes and hats and accessories accessories, industrial electrical, hardware tools, hotel kitchen and beverage supplies, automotive and electrical appliances and accessories, household appliances, digital and mobile phone accessories, security equipment, daily general merchandise, etc.

04

Research on local wholesale market

Yuzana Plaza, the largest indoor wholesale market in Burma, opened in early 1995. The market has 5 floors, more than 700 shops, mainly in clothing, furniture, household goods, accessories, electronic products and other small commodities. The market is also one of the main places for local residents to purchase goods in Yangon.

Bogyoko Aung San Market was built in 1926. Its original name is Scott's Market. Since the independence of Burma in 1948, it has been renamed Bogyoko Aung San Market to commemorate general Burma's father. There are more than 1000 shops in the market, mainly for handicrafts and clothing.

Everybody talk

The Delegation thought that the top design of the "one belt and one road" initiative, the Lanmei cooperation mechanism and the China Burma economic corridor will bring important development opportunities for Sino Burmese garment industry cooperation. China is not only a source of investment and important raw materials and intermediate products for Burma's textile and garment industry, but also a consuming country of Burma's textile and clothing products. Chinese textile and garment enterprises have brought the experience of organization and management of industrial production, continuously nurtured management talents for Burma, improved the overall technology and technology level of the garment manufacturing industry in Burma, played a technology spillover effect, and directly promoted the benign development and transformation and upgrading of the garment manufacturing industry in the country.