Saturday, 6 July 2013

The Irrawaddy: Japanese Firm Closes China Factories, Relocates to Cheaper Rangoon

The Irrawaddy's Burma Business Roundup reports:
Japan is gearing up to make Burma the new sweatshop of Asia, said a report by The Economist citing the case of Famoso Clothing, which is closing its factories in China and moving operations to Rangoon.
Famoso is part of Daiei Ready Made Clothes Corporation, based in the Japanese city of Nagoya, and makes men’s suits for the Japanese market and others. Until recently, most of its production was at three factories in China, where it employed thousands of workers. “Three years ago two of the factories in China were closed and the plant in [Rangoon] was rebuilt at a cost of US$7 million to become the company’s new Asia hub,” The Economist reported. “The company’s last Chinese factory will close within a year and the [Rangoon] operation will triple its output, from 170,000 suits a year to half a million,” the magazine quoted Famoso managing director Kazuto Yamazaki as saying. The reason for the switch is simple, said The Economist: Famoso can hire Burmese workers for US$100 per month—just 25 percent of what it has been paying its Chinese workforce. Famoso’s factory is in Mingaladon Industrial Park in Rangoon. This month it will beginning shipping its first consignment of suits to Britain for the famous Marks & Spencer chain.

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