Sagaing International Textile based Industrial Cluster Project

Status:
Start:
FY2020-2021
End:
FY2029-2030

Sectors

Textiles, leather and substitutes

Project Description

The project will involve a two-phased construction of new buildings and installation of machines across the textile value chain at the state-owned textile factories and supermarket at a ginning factory in Sagaing. Each phase is expected to be implemented in collaboration with the private sector. This will be the first textile based industrial cluster to be developed in Myanmar.

The scope of works for Phase 1 will include construction of 12 new garment related factories, knitting fabric factories, dyeing and printing factories, and down and feather factories; and residential buildings for employees. Eight of these factories will be located at No.3 Textile Factory Branch (Sagaing) while the remaining four factories, including a waste water treatment system, thermal power plant, will be established at No.3 Textile Factory (Sagaing).

The scope of works for Phase 2 will include construction of five garment related factories, embroidery factory, carton factory, and polyester wadding factory at No.3 Textile Factory (Sagaing). An international textile related supermarket at a ginning factory in Sagaing will be implemented.

The project is proposed to be operational for an initial term of 20 years. Following expiration of its initial 20-year term, it could be extended twice for a further term of five years for each renewal.

Project Expected Benefits

The project has the potential to make an important contribution to Myanmar’s economic development through job creation and income generation. It is expected that 20,000 new job opportunities will be generated. It will also benefit stakeholders across the textile value chain (small and medium sized enterprises, employees, fashion designers) by making available locally produced raw materials for textile and garment sectors, and creating entrepreneurial opportunities. It is anticipated that the imported volume of raw materials across the textile value chain will be reduced and export earnings using locally made raw materials will be increased. Establishment of a textile-based industry cluster will reduce transportation cost; enable use a common infrastructure, resource and labour pool advantage; and speed up the learning process leading to an internationally competitive and commercially sustainable textile industry. Currently, the textile factories are spread across Myanmar. Myanmar is a country with a rich textile history. However, in the past few decades, a mix of structural, infrastructure and policy challenges have limited growth across the textile value chain. Currently, manufacturers in Myanmar are operating on a cut, make, and pack (CMP) production system in which producers have no involvement in the design and/or input sourcing processes. Myanmar intends to transform from this CMP to freight–on-board (FoB) basis, where international buyers pay Myanmar’s garment factories for the full value of the completed garments as they are loaded “on board” shipping vehicles. This puts Myanmar in a stronger negotiating position to capture more margins for the country, thus, increasing opportunities for factories to provide better employment terms to workers.

Locations

Sagaing Region

Total Project Cost

371.40M

Financing Type

Private Sector Financing

Implementing Government Agency

No. (3) Heavy Industrial Enterprise

Myanmar Sustainable Development Plan Alignment

Contact Detail

Win Aung
General Manager/No (3) Heavy Industries, Ministry of Planning, Finance and Industry
textile.planning@gmail.com