A group of Hong Kong clothing manufacturers are poised to become the first foreign companies to invest in Myanmar’s flagship special economic zone as part of a push to reduce their reliance on factories in China.
Twelve companies have signed a letter of intent to open factories in the Thilawa industry zone outside Yangon, according to Felix Chung, chairman of the Hong Kong Apparel Society. He said the manufacturers, which have not been named, were still negotiating final terms but that they expected to make an initial investment of up to $3m.
The push to open factories in Myanmar comes as manufacturers with operations in China struggle with rapidly rising wages, mounting difficulties hiring workers and a generally stronger Chinese currency. Many apparel companies have in recent years moved parts of their manufacturing operations from mainland China to countries such as Bangladesh in addition to locations in southeast Asia, such as Cambodia and Vietnam.