Myanmar-Korea MoU to build garment zone
Investment group Olympus Asia has teamed up with Korea's Panko Corporation to build a 500-acre garment zone in Myanmar through a joint venture agreement.
The two organisations signed a Memorandum of Understanding (MoU) in Myanmar at the weekend, and will now begin looking for land in either Yangon, Bago or the Ayeywarwady region. The factories in the new zone will operate under the FOB model, and the agreement will focus on creating jobs for local people, according to The Myanmar Times.
Panko Corporation manufactures and exports clothes in South Korea and internationally. The company says the project is expected to start within one year with a timescale of three years expected for completion.
The project will include an international-standard wastewater treatment plant, it will generate its own electricity, and will include dormitories for employees. The companies will produce their own cotton and buttons in Myanmar, as well as producing clothes for export.
Myanmar's garment industry is growing fast, and is a priority sector for the government.
However, foreign companies sourcing from Myanmar face a number of challenges including underage workers, unsafe factories and high logistics costs.
Last week a Myanmar Textiles Manufacturers Association finally launched, following years of discussion about creating an upstream textile-specific body.
Finished garment exports from Myanmar have more than doubled from 2011-12 to 2014-15, from US$497m to US$1.02bn according to statistics from the country's Central Statistical Organisation (CSO). Yet the local textile industry has not kept up, with backward linkages remaining weak.