Myanmar has making a comeback to the textile and apparel business as the country with the most potential to emerge as a formidable player among garment-producing nations, says a study. Myanmar has deep experience in the textile industry but does not cover all parts of the value chain. However, foreign direct investment tripled in the last two years emphasising the high potential, points out Kurt Salmon Global Sourcing Reference. Kurt Salmon, a leading global strategy consulting company focused on the retail industry, conducted the survey based on production cost indices (PCIs) of six garment-producing nations Bangladesh, China, India, Morocco, Myanmar and Turkey.
Bangladesh is the most attractive destination for European retailers among the six nations due to its competence in the supply of quality products at competitive prices, according to the study. The firm analysed import data of apparel items from the six countries from 2005-15. On the other hand China is in the second position because of higher costs of production and a dearth of skilled workers.
Production costs in China are almost reaching the level of Eastern Europe and it no longer has transportation lead times, as a consequence, considerably less sourcing flexibility, its competitive strength is eroding rapidly, the study said. China is no longer a low-cost production country. Wages have tripled over the last decade and productivity gains were unable to level out this effect on overall production costs.
Ongoing efforts to improve social and infrastructural conditions, such as the established minimum wages in Bangladesh and Myanmar, indicate further increases in sourcing costs for the future Bangladesh is gaining market share in sourcing for Europe and North America, the report said.
Denim apparel shows a clear move away from China, which lost 7 per cent in 2014, while most other markets have been able to strengthen their position. Looking at the example of denim, Turkey, Tunisia and Poland have been able to expand their position, although cost structures are significantly higher than in the traditional low-cost Asian countries.
