Exports from garment factories that operate under the Cut-Make-Pack (CMP) system earned US$2.2 billion in the previous six-month mini-budget period (from April to September), which is an increase of $1 billion compared to similar period of last FY, according to the Ministry of Commerce.
The garment sector is one of the prioritised sectors that drives increasing exports. The CMP garment industry has emerged as a very promising one with preferential trade from western countries.
The export value of CMP garment was only $850 million in the 2015-2016 fiscal year, but it significantly increased to three times in the past two FYs. The 2016-2017 FY saw an estimated earning of some $2 billion from garment exports, and export income from CMP garment was estimated at $2.5 billion in the 2017-2018 FY.
Garment exports are primarily targeted to Japanese and European markets. Additionally, garments are exported to markets in South Korea, China and United States.
The majority of Myanmar’s garment factories operate under the CMP system, while those engaged in this industry are striving to transform CMP into the free on board (FoB) system, according to the Commerce Ministry.
Myanmar’s manufacturing sector is largely concentrated on CMP garments and textiles, which contributes to the country’s GDP to a certain extent.
There are more than 400 garment factories in Myanmar, with a labour force of more than 300,000 workers. Myanmar’s inexpensive labour attracts investments from foreign manufacturers to the country, which sometimes leads to a conflict over wages between workers and employers.