China’s Eastern Development International (Myanmar) Co. Ltd. under the Dongzhan Textile Group has submitted a proposal to implement a textile manufacturing cluster project in a town in Myanmar’s Sagaing city, an economic hub, at an expected cost of over $370 million, according to the latter’s ministry of planning, finance and industry (MOPFI).

According to Myanmar’s directorate of investment and company administration, the company was registered in 2018 as a manufacturer of readymade garments. Both directors of the company are Chinese citizens and it is wholly-owned by foreigners.

Sagaing city is home to a number of major state-owned textile factories. The Sagaing region borders India and its economy is largely dependent on trade with the neighbour.

The Myanmar Project Bank said the proposed project will comprise two phases at an estimated total cost of $371.40 million on 356.47 acres in Sagaing owned by No. 3 Heavy Industries Enterprise, a state-owned company. It will involve construction of a total of 17 garment related factories, an international textile-related market at a ginning factory in Sagaing, and other related infrastructures.

According to the Project Bank, construction is expected to be complete within 10 years. Phase 1 will include construction of 12 new garment-related factories, knitting fabric factories, dyeing and printing factories, down and feather factories and residential buildings for employees, according to Myanmarese media reports.

The second phase will include construction of five garment related factories, an embroidery factory, a carton factory, a polyester wadding factory and the international textile related market. Under the proposal, the industrial cluster would be linked with other textile factories across Sagaing Region.

The Chinese company had already carried out a preliminary feasibility study for the project. However, the ministry is reportedly planning to launch a Swiss Challenge to invite other interested bidders.

Under the Swiss Challenge process, an initial development proposal put forward by a company will be made public to allow qualified firms to challenge it with better terms, on the basis that they strictly adhere to the terms and conditions of the tender assessment criteria.

The project is a part of the government’s plan for the privatisation of state-owned enterprises as the country intends to transform from a cut, make and pack (CMP) manufacturer to a freight–on-board (FOB) one.