Malaysian plastics company to exit Myanmar

The Malaysia-based manufacturer Scientex, which employs more than 100 workers in Yangon’s Hlaing Tharyar Industrial Zone, is reportedly planning to cease operations in Myanmar due to conditions and policies that are unfavourable for business. Scientex—which produces packaging and plastics—agreed to a joint venture with Myanmar Smart Pack Industrial in 2017 during the civilian-led administration of the National League for Democracy (NLD) party, establishing Daibochi Packaging Myanmar. The Malaysian firm held a 60 percent share in the venture, valued at US $6.8 million at the time. Citing ongoing political and economic instability in Myanmar with few signs of recovery, Scientex announced in a June 9 quarterly report that it would be ending its operations in Myanmar. “Accordingly, the Group will work towards minimising the operational and financial impact from this cessation,” the report said, referring to the company by a legal designation. In 2024, plastics production in Hlaing Tharyar Township accounted for just 3.8 percent of Scientex’s total revenue. A source connected to the company told Myanmar Now that the junta’s denial of import licenses for crucial raw materials since the 2021 coup had brought factory operations to a near standstill and forced the company to reduce its workforce by half. “Approximately 90 percent of our raw materials are imported from abroad. Without these imports, we’re unable to maintain production,” the source said. “In summary, the effects of these policies are felt nationwide. Not all companies have been able to find domestic sources for raw materials or sustain production at an acceptable level of quality,” the source added. According to business owners, sourcing raw materials is the greatest challenge for the companies in the Myanmar Plastic Industries Association, which has more than 330 members. Facing a shortage of foreign currency since seizing power in the coup, Myanmar’s military regime has imposed import restrictions to curb the outflow of American dollars, which has in turn led to scarcity in various essential goods like fuel, cooking oil, and medicines. Factories dependent on imported raw materials have experienced the most difficulty under these conditions, with only the garment sector able to maintain its pace of fulfilling international production orders. Low wages have attracted many international brands to Myanmar, but amid inflation and rising costs of living, workers have been protesting for fairer pay. Last week, the International Labour Organization (ILO)—a United Nations agency—reached a decision to impose sanctions on Myanmar for the junta’s violations of its fundamental conventions on freedom of association and forced labour. Labour activists have said the ILO’s decision may encourage further suspensions of collaborative ventures, international investments, and support for Myanmar from the agency’s 186 other member states.

Malaysian plastics company to exit Myanmar

A source close to the firm said the Malaysia-based Scientex, which relies on raw materials bought from abroad, had chosen to withdraw from Myanmar after the military regime denied its requests for import permits

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