More Korean textile units keen to invest in Burma

by Salai Pi Pi
Friday, 25 September 2009 23:14

New Delhi (Mizzima) – More Korean textile industries are keen to invest in Burma with the general elections due in 2010 in the military ruled country.

Speaking to Mizzima, Mr. Lee Seung Woo, a staff member of the Trade and Marketing Team of The Korea Federation of Textile Industries (KOFOTI) said that Burma, where labour is cheap, will be one of its options for further investments in the textile industry in the future after it shifted its interest from China to Southeast Asian countries.

“The labour wages in Myanmar [Burma] are cheaper than in Vietnam and other ASEAN countries. That’s why we are interested in Myanmar,” Mr. Lee said.

Korea has about 30 factories producing garments in military ruled Burma where the labour cost is no more than US dollar 35 a month.

However, Lee said, more investments will be possible if there is democratization in the country after the 2010 election.

“We are watching the political situation in Burma. The more the democratization, more investment will be made in Burma,” he said.

In order to promote bilateral trade and investment, KOFOTI has signed a Memorandum of Understanding with the Myanmar Garment Manufacturers Association (MGMA) in Rangoon, the former capital of Burma on September 10.

“We just concluded a MOU to promote bilateral trade and investment,” Lee said, “We would like to have more friendly relations with Burma.”

While more companies are interested in increasing their investments in Burma, Lee said, Korean garment factory owners complained about the difficulties in importing machines for producing textiles and the export tax imposed by the regime.

“They have a hard time doing business. Especially in importing machines for producing textiles and the export tax imposed,” said Lee and added that the Burmese regime collected 10 per cent as export tax.

However, Myint Soe, Chairman of the Myanmar Garment Manufacturers Association (MGMA) said, he did not acknowledge that Korean companies were having a problem in importing machines for manufacturing textile products.

Korean textile companies including Dae Woo are currently exporting products to Japan and some EU countries as it cannot access the U.S. which is the largest textile market in the world, said Lee.

Burma’s garment industry was hardly hit by sanctions imposed by the U.S for the country’s poor record of human rights and its failure to implement political reforms.

“If there is democratization in Myanmar after the 2010 elections, the US is likely to lift its sanctions,” Lee said.