In addition to the reinstated GSP system on EU imports from Myanmar, whereby no duties are imposed on the imports into Europe, investments from foreign countries like China and Thailand have been pouring into Myanmar to set up production facilities. Such forces, when combined, have attracted a steady stream of interested garment buyers from Europe who have been visiting Myanmar on sourcing missions. Smaller production factories, such as family-owned local businesses, have their own niche attraction for EU buyers seeking longer term sourcing partnerships and high-quality, smaller volume orders.
SMART Myanmar was fortunate to be an early entrant in Myanmar’s garment sector re-emergence, recognizing early on the potential for sector growth and the risk from non-compliance that European buyers would face. SMART Myanmar’s matchmaking service has become one of the most effective services in Yangon for European companies wanting to source responsibly in Myanmar. The SMART team has facilitated sourcing trips for dozens of European brands & retailers both small and large. Several of these companies have started sourcing garments in Myanmar as a result of the SMART project.
One recent visitor was the CWS-boco Group, an internationally leading textile service provider and with its integrated CWS-boco Supply Chain Management organisation one of the largest producers of workwear and business fashion. Like other European buyers, CWS-boco is currently looking at possibilities to cooperate in Myanmar and requested SMART Myanmar organize a visits to factories after conducting preliminary market research with SMART’s Project Manager for Marketing & Finance, Su Tayar Lin. This company sees potential in the market and will follow-up with factories visited to see their willingness to cooperate with them. They have expressed a desire to work with the factories in building up long-term relationships based on consistent quality and responsible business practices. Mr Peter Taylor, Chief Operating Officer of CWS-boco said, “We saw at least 3 factories that have promising facilities and world class potential. Overall the quality of the factories that we have visited was very good” after visiting a mix of local and foreign invested garment factories.
Early this year SMART Myanmar organized a visit to Europe with nine different garment manufacturers (Local) to attend the Trade Fairs in Berlin and Paris. This trip has also given the participants the better insight of the multi layered European market. During the visit SMART Myanmar has also arranged a business-to-business (B2B) meeting between international retail chains/brands, professional investors and factories from Myanmar in Berlin to make new potential contacts to support Myanmar factories to access EU markets again.
The B2B meeting in Berlin resulted in valuable contacts between EU buyers and suppliers from Myanmar. One of them was a German work wear company (prefers to remain anonymous) who visited Yangon for further assessments at the end of June to follow-up on the Berlin B2B meeting. They have expressed an appreciation of Myanmar as a wonderful country with nice and polite people with challenging but decent infrastructure. One of the main difficulties this company mentioned after visiting Yangon is the inconsistent electric supply. They had a chance to visit two local factories during their trip but none of the factories visited had enough experience in working with the free-on-board (FOB) business model. However, the buyer’s workwear products are not seasonal and have repeated styles and requirements so they are exploring working with cut-make-pack CMP producers to let them practice an FOB, and they are willing to support the factory with recommendations on the fabric and accessories suppliers and by making advance payments to pre-finance the order. They are a family owned business and prefer the sustainability of working with local family owned smaller businesses, helping them grow together via long-term sourcing partnerships. This has strong potential to benefit both the local producers in Myanmar and the buyer from Germany.
The trade mission conducted by SMART Myanmar last March with 17 EU buyers and more than 20 Myanmar factories was also successful in the eyes of the European participants and the manufacturers from Myanmar. Following up with all participants from the EU and Myanmar 3 months after the mission it was generally agreed that all participants were either satisfied or highly satisfied with the results of the trade mission. Indeed, a few of the European buyers have already placed orders in Myanmar factories which they visited during the visit.
The European buyers appreciated meetings and the expert briefings arranged by SMART Myanmar and AHK. Most of the buyers have set dates in their agendas to revisit Myanmar soon. Many of the EU buyers from the trade delegation visit expressed their interest to participate in another future trade mission. One of the participants, Stephan Fricke from Baumhueter International said “My expectations were met, because I came to learn about the country and the opportunities and challenges. And so I have! I did not expect to find a new sourcing paradise and will be able to place a lot of test orders in the factories straight away”.