Japanese clothing retailer Honeys mulling third factory in Yangon

A big Japanese clothing retailer that shifted production from China to Myanmar in 2012 is considering opening its third factory in Yangon, the Nikkei Asian Review reported last week.

The expansion of Honeys operations in Myanmar is highlighted in a NAR report on the bright outlook for the manufacturing sector as it benefits from an end to economic sanctions and low-cost labour.

Honeys, which in 2012 became the first Japanese garment manufacturer to begin production in Myanmar, makes about 18,000 pieces of clothing a day at its two Yangon factories, NAR reported on January 14.

It said the factories account for about 20 percent to 30 percent of Honeys sales in Japan, one of the main destinations of garments made in Myanmar, along with South Korea and the European Union.

The number of production lines at the second Honeys factory had increased from five to 34, and its workforce from about 300 to 2,600, since it began operating less than two years ago, NAR said.

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Honeys began outsourcing to China in the early 2000s but decided to shift part of its production to Myanmar because of cheaper labour.

Labour costs were beginning to rise in Myanmar, which introduced a minimum daily wage in 2015, but at about K200,000 a month were still lower than Bangladesh and Vietnam, Mr Takeshi Iguchi, Honeys head in Myanmar, told the NAR.

Cheap labour and the lifting of sanctions had contributed to rapid growth in the garment sector, and the Myanmar Garment Manufacturers Association, representing domestic and foreign companies, had quadrupled to about 400 members since 2015, NAR said.

MGMA figures show that garment exports were valued at US$1.46 billion in 2015, up from $337 million in 2010.

The association has set an export target of $12 billion by 2020.

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