The Myanmar Garment Manufacturers Association (MGMA) has reported several garment factories that stopped operations as European Union countries, a major export market, canceled orders last week in the midst of the COVID-19 pandemic outbreak. All factory operations which accepted EU orders have stopped.
The bad news came as China’s supply of raw materials resumed flowing back into the country after three months of stoppage due to the virus outbreak. Among the fashion companies that have experienced orders cancellations are the Multinational Apparel Textile Myanmar, which no longer has issues with the availability of raw materials but has left a large inventory due to cancellations of purchases.
Lat War is stuck with 500,000 pieces of garments after a European buyer cancelled the order. Other companies in the same predicaments are Gold Emperor, Hong Text, and Myanmar Irrawaddy.
Before order cancelation from the EU, at least 20 of Myanmar’s 500 factories had been shut down due to the pandemic, leaving more than 10,000 employees unemployed, said industry sources. According to the Ministry of Labor, Immigration and Population, 38 cut-make-pack factories which include the garment factories have shut down since January. This included 22 garment factories. Others also reduced the number of staff at their premises.
The shutdown of more garment factories led to more labour unrest, including the strike at the Grand Enterprises Garment at Yangon’s East Dagon Industrial Zone as the company announced layoff of thousands of workers.