YANGON – Thirteen factories in Yangon and Bago regions have closed or cut back staff in Myanmar since January due to factors like a lack of raw materials, no orders and no buyers, according to the Ministry of Labor’s factories inspection department.
U Nyunt Win, director general of the department, told The Irrawaddy on Wednesday that seven factories had closed permanently, four had shut temporarily and two had reduced their workforces.
Most are garment factories, with the others making shoes, steel, wood, paper and printed goods.
The Labor Ministry declined to name the factories.
”The factory closures were due to loss of business, lack of orders and lack of raw materials,” said U Nyunt Win.
He said some of the factories faced challenges like industrial action and labor disputes. As a result, businesses lost partners, as they could not supply products on time.
Due to the factory closures, more than 3,000 workers were now unemployed. The shutdowns were not all linked to the coronavirus, according to the director-general.
The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) said clothing factories were facing a shortage of supplies from China because of COVID-19.
Many factories were planning to lay off staff or stop operations if they faced long-term shortages of supplies, according to the trade organization.
The UMFCCI requested that the government allow employers to compensate workers based on the minimum daily wage of 4,800 kyats (US$3.4)—not their current salaries—if they close a factory.
It also requested the government suspend enforcing the new minimum wage until September rather than in May, as previously planned.
The federation called on banks to increase lending at low-interest rates to factories dealing with the coronavirus.
It also called on the government to prevent a planned strike for those factories that might have to close.
The Myanmar Garment Manufacturers Association (MGMG) vice-chairman U Aung Win this week said 20 clothing factories had threatened to close.
Meanwhile, 10 labor organizations, including trade unions and labor rights groups, on Tuesday issued a joint statement saying that some of the factories were closing to break unions and using the coronavirus as an excuse.
It called on the government to inspect factory closures because some had already reopened with new employees after officially closing down, allegedly because of the coronavirus.
“We do not argue if factory closures are really linked to a lack of supplies,” said Ko Nay Lin Aung, assistant secretary of the Myanmar Industry Crafts and Services Trade Union Federation.
He told The Irrawaddy that the Labor Ministry needed to pass legislation to prevent employers from closing factories under the pretext of the coronavirus.
A labor activist said the Lucky Sky bag factory in Hlaing Tharyar Township had already restarted operations with new staff after closing on Feb. 24 and blaming the coronavirus.
On Feb. 29, the Hua Meng garment factory in Ayeyarwady Region’s Pathein Township closed and sacked 1,000 workers because of what it said was a lack of supplies.
However, the Labor Ministry had not recognized the closure because employment disputes were ongoing with the company, a ministry official said.
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