Strengthening relationships between Myanmar garment factories and buyers

Facilitating relationships to improve labour standards and develop specialised services to support industry development and growth.

The BIF garment market strategy is based on a detailed market analysis conducted by BIF from October 2013 to October 2014. Our market analysis identified:

  • Constraints around the quality of jobs, including an apparent inability to pay workers more, reduce overtime, improve health and safety, remove low paid below age workers and invest in other areas of worker welfare; and
  • Constraints to the industry being able to achieve potential growth and thereby provide a lot more good quality jobs.  

To understand the second set of constraints better the BIF team designed an intervention to help the local industry find out from regional supply-chain actors the potential for growth and what would be needed to achieve that that.

 

Why this Intervention is important for Market System Change

The relationships between buyers, and in particular those serving EU and US markets, and many garment factories in Myanmar was non-existent, or very weak. Opening up the EU and US markets is critical if Myanmar is to become a large-scale supplier and to the creation of many new good quality jobs in the industry.

To date, three landmark garment industry conferences have been organised by BIF. All of these contributed to the development of a plan for the industry to grow, as is credited in the ‘Myanmar Garment Industry 10-year Strategy 2015 – 2024' which was published in August 2015.

 

Hong Kong, August 2014

The Business Innovation Facility (BIF), Coats Plc and Pyoe Pin hosted a 2-day workshop to examine how brands and other garment supply-chain companies can work with the Myanmar garment sector to deliver growth and create good quality jobs for its employees. The workshop premise was that Myanmar is the next sourcing location that can reach scale, but that the industry needs to avoid some of the problems and set-backs that other countries in the region have experienced. It invited international brands and supply chain companies to attend to help the local industry in Myanmar to ‘get it right first time’ so that it can provide the industry with a new sourcing location for garments that meet the need for quality garments from a sector that is compliant to international standards.

In the first part of the workshop a vision for the Myanmar garment sector in 2020 was developed. The vision was for a sector with 10bn USD turnover, employing 1 to 1.5 million people and creating decent jobs for all. The group next set out the pathway by which the vision could be achieved. This started with the discussion of ‘showstoppers’ that could block any progress, which included high costs of production, and the lack of a clear position on labour standards.

The group brainstormed some of the early actions that would be necessary to achieve the vision. These included steps to move factories from CPM to FOB and then towards a full service offering, and how to develop partnerships between companies in the supply chain through specialisation at factory level. Practical ways to improve compliance to labour standards were shared, as were ideas on how to develop skills amongst the workforce, including the need for industrial engineers to increase productivity.

In a powerful final session, participants outlined some of the things that they were doing, or prepared to do, in order to take forward issues discussed at the workshop. The Myanmar Garments Manufacturers Association representatives responded strongly to the message that they had heard from brands about labour standards, committing to develop their 10-year strategy to include the eradication of child labour. The brands offered to visit Myanmar to share their messages with other local companies, and also to bring more brands and suppliers in to the process.

 

Yangon, November 2014

In response to the offer from brand representatives to visit Myanmar, a two-day conference was held in to engage international garment sector supply chain companies and Myanmar factory owners in a dialogue aimed at strengthening the emerging strategy for the Myanmar industry. Over 100 participants, including around 70 from Myanmar garment factories, discussed the emerging MGMA strategy and undertook work to develop it further. Inputs from the Deputy Ministry of Commence, and companies such as Tesco, Next, Adidas, and Coats highlighted the opportunity that the Myanmar industry has to grow significantly if the needs of European and US brands are to be met for international labour standards, value for money, high quality products and increased specialisation.

Many suggestions were made for how to build a strong reputation among buyers and brands. The Myanmar industry was encouraged to give thought to issues related to values and culture alongside consideration of the strategic positioning of Myanmar; operationalization of the draft 10-year garment strategy; and meeting international standards in challenging areas such as child labour. 

 

Yangon, May 2015

In order to help the local industry to develop a plan of action for their strategy a one-day conference was held to bring together the international garment industry, the Myanmar Government, including the Ministry of Commerce and the Customs Department, local factory owners and unions, multi-lateral donors, brands such as Gap, and H&M Myanmar, and other relevant stakeholders. The conference was organised by BIF in partnership with Pyoe Pin and the MGMA.

The conference aimed to lay the foundations for increased collaboration and coordination between the industry and Government by identifying recommendations and actions for: (i) fostering a regulatory environment to sustain the sector’s growth and (ii) creating a supportive business environment for supply chain development. It also gave local manufacturers and the Government an opportunity to update participants on the progress made to date and the challenges that the industry is still facing.

Discussions demonstrated that most participants were in agreement on areas that needed the most development and there was also consensus that the industry needs substantial support to gather information and to compare different manufacturing scenarios before making decisions, and a comprehensive action plan was developed.

 

What happened next...

Following these workshops and the publication of the 10-year Strategy a multi-stakeholder group was set up and project management for action arising from the strategy put in place.  The BIF team decided that its participation in this process was not necessary and that there was no need for further workshops bringing brand and factory representatives together, Instead, BIF has integrated its work with brands into another intervention that is aimed at stimulating local service provision.

 

Project Details

Country
Sectors
Partners
Low-income focus
Revenue model
Improving worker welfare and productivity in garment factories

Resources

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BIF is recruiting a Garment Market Manager in Myanmar.

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IMPROVING PROFITABILITY & WORKER WELFARE IN MYANMAR GARMENT FACTORIES [Myanmar Language]

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