S.Korean banks eye Myanmar market

Major commercial banks are poised to actively make inroads into Myanmar as the country is starting to implement an open-door policy toward international activity.

Following Woori Bank and Hana Bank, which opened liaison offices in the Southeast Asian country last month, Shinhan Bank plans to join the movement as early as the first half of next year.

The state-run Industrial Bank of Korea is also preparing to tap the new market in a bid to overcome the saturated market conditions at home.

After building relations with the Myanmar government through liaison offices, the Korean banks are expected to open branches or local subsidiaries when the ban on non-Myanmar banks’ business activities is lifted.

A Shinhan Bank spokesman said one issue is whether to form a joint venture with a local bank or to establish a wholly owned corporation.

Woori Bank is expected to register its Yangon office as either a branch or a local subsidiary by early 2014 and expand its network of branches in the country.

Hana Bank has signed a strategic partnership with Ayeyarwady Bank, Myanmar’s third-largest bank in terms of total asset.

Korea’s major commercial banks have been expanding their business networks in Asia’s emerging markets over the past few years on the back of enhanced diplomatic ties.

In October, Korea and Myanmar agreed to bolster business and diplomatic ties as Seoul looks to firm up its footing in the Southeast Asian country following sweeping democratic and economic reforms.

They agreed to push for an investment protection pact and boost cooperation on trade, energy, resources and infrastructure.

The two countries established diplomatic relations in 1975. The relationship soured in 1983 when a terrorist bombing in Yangon by North Korean agents killed 17 Seoul officials accompanying then-President Chun Doo-hwan. Myanmar severed ties with Pyongyang after the incident.

Korean banks’ targets include countries in central and southern Asia as well as those in Southeast Asia, China and Japan.

“Aside from markets like China, Vietnam and Singapore, the banking industry began actively tapping Kazakhstan, India and Bangladesh,” a local banker said.

But he stressed that banks will still put priority on making inroads into large cities in China and Southeast countries.

“With the 2008-2009 global financial crisis fading, local banks have been rushing abroad to get the upper hand in emerging markets,” a banking analyst said.

He said their aggressive expansion overseas was attributable to limited profitability in the saturated local banking industry.

Source elevenmedia

Discussion of Directorate of Investment and Company Administration

Discussion with Ms. Cynthia Kiang, Deputy Director General of Bureau of Foreign Trade, Ministry of Economic Affairs from Taiwan           Ms. Cynthia Kiang, Deputy Director General of Bureau of Foreign Trade, Ministry of Economic Affairs from Taiwan and Delegates paid a call at office No.(32), Directorate of Investment and Company Administration at (10:30) am on 27th November, 2012.           During the call, they cordially discussed about trade and investment opportunities, procedures of company registration, information of new foreign investment law and land lease and investment opportunities in Myanmar in a cordial and frank manner. News 1

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Discussion with  Mr.Noburo Aoki, General of Kajima Cooperation  Japan           Discussion with Mr.Noburo Aoki General of Kajima Cooperation from Japan delegates paid a call at office No.(32), Directorate of Investment and Company Administration at (11:55) am on 27th    November, 2012.           During the call, they friendly discussed about construction and services invest in Myanmar. News 2

-------------------------------------------------------------------------------------------------- DICA Receives Delegation from Unicharm Corporation of Japan           Responsible officials from Directorate of Investment and Company Administration (DICA) meet the delegation led by Mr. Tsutomu Araki, Department Manager for Corporate Planning Division of Unicharm Corporation of Japan at (18:30) pm at office no. (32), Nay Pyi Taw on 26th November 2012.           At the call, they frankly discussed on investment opportunities in developing the business for the manufacturing of hygiene product in Myanmar. News 3 -------------------------------------------------------------------------------------------------- Discussion with  Mr. Kosuke Takahashi, Manager of Mitsubishi Corporation from Japan           Mr. Kosuke Takahashi  , Manager of Mitsubishi Corporation from Japan and delegates paid a call at office No.(32), Directorate of Investment and Company Administration   at (9:30) am on 26st   November, 2012.           During the call, they discussed investment opportunities in Myanmar in a cordial and frank manner. News 4 -------------------------------------------------------------------------------------------------- Discussion with UNITED NATIONS Economic and Social Commission for Asia and the Pacific (ESCAP) Officials from the Directroate of Investment and Company Administration met Economic Affairs Officer Ms. Marit Nilses and team, at Building No.32, Nay Pyi Taw at 9:30 am on 22nd  November, 2012.             At this meeting, they discussed the matters related to newly enacted foreign Investment Law of Myanmar and procedures and opportunities, and its related law. News 5 -------------------------------------------------------------------------------------------------- Source DICA

Myanmar to export plastic bags to Japan

Lucky Bag plastic enterprise of Myanmar will start exporting HDPE kind of thin, soft plastic to Japan at the end of this month, managing director Hla Win said.

The polyethylene will be exported to Japan, which will be used in making kitchen wares. Only the product, without the logo, will be exported to Japan.

The move came after an agreement between the Myanmar company and some Japanese companies a few months ago. Some Japanese companies discussed plastic exports with the Myanmar company about a year ago.

“Three to four Japanese companies had held discussions with us. Shopping bags and large bags will be exported to Japan later. We have sent samples three times and they liked it and agreed for it to be sent at the end of this month. Only plastic bags without logo will be sent and then Japan will stick its logo on them and they will be locally sold,” the managing director said.
 
The Lucky Bag company will start exporting 13 tonnes of plastic. Malaysia, China and Vietnam are now exporting plastic to Japan. Therefore, Myanmar’s plastic is likely to be competing with these countries.

“We aim to explore the export market. If plastic export is convenient, it can do good things for plastic businessmen and provide employment as well. We hope we will achieve success in our enterprise, but we have problems with regular power supply. The plastic quality depends a lot on power,” the managing director added.

The plastic will have to be exported to Japan and will not be permitted for local sales.

Source elevenmedia

Mega comples to be built in Yangon

Mall and property developer F.M.I Company will be building a complex designed to be an iconic landmark at the centre of downtown Yangon.

“On 10 acres of land where the Grand Meeyatha Executive Residences is, F.M.I’s centre and the old railway head office will be demolished and replaced with hotels, condominiums, servicing centres, office buildings, and the biggest shopping centre in Yangon,” FMI Company chairperson Serge Pun said during the company’s 20th anniversary on November 22.

Grand Meeyatha Executive Residences, F.M.I and its sister company SPA will be working together for the project. The first phase of the project starts soon.

Source elevenmedia

Myanmar needs to harness energy resources to power growth:ADB

Myanmar needs to develop its vast energy resources to promote growth and reduce high poverty incidence, the Asian Development Bank said.

The Manila-based lender released Tuesday its initial assessment of Myanmar's energy sector. The report showed that the country has abundant energy resources which can be tapped for power generation and oil and gas exploration. The most notable of these resources are hydropower and natural gas.

The hydropower potential of the country's rivers is estimated to be more than 100,000 megawatts. The country also has a proven gas reserves amounting to 11.8 trillion cubic feet and is supplying natural gas to Thailand.

Despite having these resources, Myanmar's current per capita electricity consumption is among the lowest in Asia. Biomass accounts for nearly 70 percent of its domestic energy source. Electrification rates range from 67 percent in Yangon to as little as 16 percent in rural areas.

The ADB said energy resources were not harnessed owing to several problems that plagued Myanmar for decades. These include limited capital; lack of qualified personnel; poor legal and regulatory frameworks; and a lack of coordination and planning among seven energy-related ministries.

"Myanmar's energy sector has suffered from decades of under- investment, and only one in four people currently have electricity access," Anthony Jude, Director of the Energy Division in ADB's Southeast Asia Department, said in a statement.

With Myanmar opening up, Jude said it's possible to use domestic energy resources to power the country's development. But this can only be possible through enforcing environmental and social safeguards.

The ADB said international investment in Myanmar's energy sector could focus on medium- and long-term planning; rehabilitation works in power generation, transmission, and distribution; and the construction of gas power plants in Yangon; the construction of a 500kV transmission line from the north to Yangon; an integrated, comprehensive plan for hydropower development; and the rehabilitation and upgrading of coal and gas- fired generation plants, refineries, and natural gas pipelines.

Source: Xinhua

MDR eyes Myanmar's telco industry

MDR Ltd is planning to set up a joint-venture company with three other firms to break into the telecommunications industry in Myanmar.

MDR signed a non-binding heads of agreement with Be-Well (Myanmar) Company Ltd, Be-Well Corporation Pte Ltd and Avitar Enterprises Pte Ltd, to form a JV firm. MDR will hold a 51 per cent stake in this tie-up.

The JV company aims to provide after-sales services for telecommunication devices.

It is also looking to provide exclusive consultancy and retail franchisee procurement services for Myanmar-based Golden Myanmar Sea Co Ltd (GMS).

Source: The Business Times

UAC eyes Myanmar for projects

The MAI-listed Universal Adsorbents & Chemicals Plc (UAC) will expand its alternative energy and water management projects into Myanmar, with the initial investment set at 2 billion baht.

Kitti Jivacate, the president and chief executive, said the move is expected to double the company's profit margin from 8-10% now.

UAC started out as a chemical trading company that counted the Siam Cement and PTT groups among its main customers.

It has since diversified into alternative energy and water management, both of which generate greater profit margins and more sustainable growth.

The company has earmarked 2 billion baht for the Myanmar projects, with funding to come from a capital increase through a rights offering (RO) and public offering (PO), with warrants issued to existing investors.

Details will be disclosed sometime next month for the RO and at the end of next month the PO.

The warrant exercise period has been set at three years while the capital increase is expected to be completed early next year.

UAC currently has paid-up capital of 198.37 million baht or 276,474,739 shares at a par value of 50 satang apiece, and the RO, PO and warrants will add 132 million shares.

Domestically, a petroleum production plant with annual capacity of 19,681 tonnes is planned for Sukhothai province.

This project will transform crude oil into compressed natural gas, liquefied petroleum gas and natural gas liquids.

This project will require an investment of 620 million baht and start operating in next year's first quarter.

Annual revenue from this facility will be an estimated 200 million baht.

UAC also plans 10 compressed biomethane gas (CBG) projects on its own and six others with partners.

Each one will cost 60 million baht to develop, making UAC's total investment 600 million for the wholly owned projects and 180 million for the the joint ventures.

All CBG projects will be built and start operating next year.

They have been granted tax privilege for eight years.

Another project is a biodiesel plant in Chiang Mai province that will also start operating next year.

UAC has also agreed to join with Hydrotek Plc, another MAI-listed firm specialising in water management, in starting two water supply projects in Myanmar.

One is slated for Yangon at a cost of 800 million baht and the other for Mandalay at a cost of 300 billion.

Both will have local firms for minor partners.

UAC projects revenue next year at 1.1 billion baht, up from 1 billion expected this year.

Next year's profit margin will increase to 15% from 8-10% this year due mainly to the further diversification into alternative energy.

Mr Kitti said half the company's revenue will come from these business areas two years from now, up from 10-15% now.

Combined annual revenue will reach 2 billion baht in a few years, he said.

"Our main problem at the moment is a shortage of engineers to man all the projects," said Mr Kitti.

UAC posted a nine-month net profit of 103 million baht, up from 78.5 million in the same period last year.

For the third quarter alone, net profit was 30.2 million baht, up from 17.5 million.

Shares of UAC closed Friday on the MAI at 7.40 baht, unchanged, in trade worth 3.51 million baht.

Source: Bangkok Post

Hotel Boom in Yangon

Yangon, the biggest commercial city of Myanmar, now hosts approximately 8,000 hotel rooms but the number could rise by 36.7 per cent per annum during 2012-2016.

A new report of Jones Lang LaSalle, a property consultant, shows that due to supply shortage against the large number of visitors to the reopened country, average room rate (ADR) has been growing by 350 per cent from 2007 to 2012. New supply growth is based on the assumption that all projects which are underway or in the pipeline are completed.

There has been tremendous growth in visitors to Yangon in the past year as Myanmar began economic and social reforms, and as a result, hotels are now experiencing significant growth in demand from both corporate and leisure travellers. However, major international brands are relatively scarce in Yangon due to the economic sanctions that have prohibited American and European hotel operators from entering the market.

"We expect hotel supply in Yangon to grow rapidly in the coming years, as a result of this shortage of rooms and pressure from the government to increase capacity. We are estimating supply will increase by around 37 percent per year up to 2016. However, given the continued growth in visitor arrivals, construction lag and potential economic, legal and political risks, we anticipate that Yangon will experience a major shortage of hotel rooms for the next five to ten years until substantial room supply enters the market. The expected supply and demand dynamics over the next few years will give operators the opportunity to substantially increase room rates," said Andrew Langdon, senior vice president of Jones Lang LaSalle.

The market is not without challenges; land acquisition is difficult and sources of funding remain opaque. Certain projects in Yangon are fairly speculative and there is a fair chance they will not move forward. However, Myanmar's new foreign investment law (introduced this month) is aimed at bringing in foreign capital to rapidly address numerous shortages and to grow the economy. The law stipulates that foreign investors will not require a local partner to set up a business. Foreigners will be able to own 100 percent of a company in Myanmar, with any share in a joint venture with a domestic partner mutually agreed upon by both parties. In addition, investors will enjoy various tax incentives such as income tax exemptions of up to five consecutive years, while land leases have been extended to 50 years with options from the government to extend an additional two 10 year periods.

In light of the projected influx of demand over the coming years and limited room supply of international standard in Yangon, hotels have been aggressively renegotiating contracts with travel agents in an effort to increase rates. In response, the government has implemented a USD 150 rate cap to try to mitigate the higher room rates, but this cap is only applicable to lead-in rooms sold to travel agents / tour operators and is due to expire at the end of March 2013. Most hotels have been running at full capacity during weekdays throughout the year and also at weekends during the high leisure season.

"Despite the challenges, Yangon is positioned to grow much faster than many other emerging markets in Asia and is likely to generate high levels of growth across all industries, albeit from a low base. The opportunities in all sectors of real estate are particularly attractive with a severe shortage of supply in the office, hotel, residential and retail sectors. In the hotels sector, even if international hotel supply triples in the next several years, the Yangon market still offers plenty of opportunities for early movers, given the severe lack of current capacity," Langdon concluded.

Source: The Nation

Myanmar's GDP growth to rise to 6.25% next year, IMF say

The International Monetary Fund (IMF) on Wednesday projected a rise in Myanmar’s economic growth rate to 6.25 percent next year as a result of recent economic reforms and increasing foreign investment in natural resources and commodities exports. It praised the reforms and said new policies could turn Myanmar into “Asia’s next rising star.”

The IMF projected GDP growth to accelerate to 6.25 percent in in the fiscal year 2012/13, up modestly from an estimated 5.5 percent growth this year and 5.3 percent in 2010/11. Myanmar’s GDP in 2010/11 was US $45.4 billion, according to IMF data.

In a statement, the fund lauded the Myanmar government for embarking on a historic set of reforms to modernize and open up its economy, which it said could facilitate strong and inclusive long-term growth that reduces poverty.

“These reforms are already bearing fruit. Growth is expected to accelerate to around 6.25 percent, bolstered by foreign investment in natural resources and exports of commodities,” said IMF Mission Chief Meral Karasulu. “With a commitment to strong reforms, Myanmar has the potential to vastly improve the living standards of its people and emerge as Asia’s next rising star.”

The IMF mission chief visited Myanmar this month to hold discussions on macroeconomic policies with Burmese Finance Minister Win Shein, Central Bank Governor Than Nyein, parliamentarians and representatives of the private sector and donors. Discussions on clearing Myanmar’s external arrears were also progressing, the IMF said.

IMF said inflation has declined and should remain moderate at around 6 percent next year. The exchange rate has been stable in recent months, with international reserves increasing to $4 billion, it added.

The fund stressed the need for the government to continue implementing well-paced economic reforms, which were begun about two years ago.

“Myanmar remains one of the poorest countries in Asia, with economic development stymied by many distortions. On the macroeconomic front, the government’s overarching priorities are two-fold: to maintain stability during the transition process, and to build the modern tools and institutions necessary to manage a rapidly changing economy,” it said.

Macroeconomic reforms should focus on three key areas, the IMF said: consolidating exchange rate unification, developing a consistent monetary policy framework and containing fiscal deficits, which will set the stage for higher and stable revenues.

“In all of these areas, the IMF will continue to provide technical assistance to the Myanmar government,” Karasulu said, adding that other international financial institutions and bilateral donors are also supporting the authorities’ broader reform efforts.

The IMF recently re-engaged with the Myanmar after the government began political and economic reforms. In May, the fund published its first report on Myanmar in decades and in July it opened an IMF office for Myanmar in Bangkok, Thailand.

Source: Irrawaddy

US play for Myanmar trade turf

After years of almost unchallenged dominance, China’s influence in Myanmar is under threat as the United States and other nations seek closer ties with the former pariah state, experts say.

The Asian economic powerhouse has long helped keep Myanmar afloat through trade ties, arms sales, and by shielding it from UN sanctions over rights abuses as a veto-wielding, permanent member of the Security Council.

In return, China was assured of a stable neighbour and access to Myanmar’s oil, gas and other natural resources.

But since Myanmar’s military ceded power last year, China has lost some of its leverage over the country formerly known as Burma.

European and US firms are no longer banned from doing business there, leaving them scrambling to catch up with rivals from China, India and elsewhere in Asia in the competition for its resources and consumer markets.

US President Barack Obama’s historic visit to Yangon this week was the clearest indication yet of the sea change in relations under way between Washington and Myanmar.

Myanmar is now in the process of reversing its long-standing dependence on Beijing, said Renaud Egreteau, a Myanmar expert at the University of Hong Kong.

“It’s clear that the monopoly era is finished,” he said, while adding that “strong influence will remain.”

The US diplomatic offensive, part of a strategic “tilt” towards the Pacific in the face of a rising China, became clear with a visit by US Secretary of State Hillary Clinton a year ago and has frayed nerves in Beijing.

“America will use more non-military means to slow or obstruct China’s rise,” according to Yuan Peng, director of the China Institute of Contemporary International Affairs.

Washington will pursue its goal “by strengthening alliances and upgrading partnerships and driving wedges in China’s relationships with North Korea, Pakistan and Myanmar,” he wrote in a commentary earlier this year.

China and Myanmar’s “deep-seated” relationship will not disappear overnight, however, said Professor Chen Qi, a foreign relations expert at Tsinghua University in Beijing.

“If Myanmar is gaining international support, then China will need greater diplomatic skill to maintain its relationship.”

It is not just in the realm of diplomacy that the United States is vying for China’s crown, analysts say. The end of Beijing’s diplomatic monopoly has also ruffled the feathers of Chinese traders who made themselves at home there.

“They didn’t face any competition in Myanmar for more than two decades under the dictatorship. They could do whatever they wanted at that time,” said Aung Kyaw Zaw, a Myanmar dissident intellectual who lives on the border.

The shift has also affected major Chinese-backed development projects.

In September 2011, President Thein Sein ordered a halt to work on a controversial hydropower project in the northern state of Kachin that was due to produce electricity for export to the northern neighbour.

The move, hailed by the West as a rare concession by the regime after a public outcry, was seen as a turning point in relations.

For more than 20 years, according to researcher Josh Gordon of Yale University, the Chinese enjoyed excellent relations with Myanmar’s rulers while largely avoiding contact with civil society groups and local communities.

Now they have been forced to reconsider their methods, in a country where anti-Chinese sentiment is virulent.

“Myanmar has a xenophobic political culture and so this exacerbates its reaction to China’s rise and influence in the country,” Gordon said.

But he believed that Chinese business, which has inundated Myanmar’s population of 60 million with consumer goods, would find a new way to prosper.

“Chinese infrastructure and large-scale projects may decrease in relative importance as other players come in,” he said. “But the US is not going to take over the market for cheap plastic chairs in Myanmar any time soon.”

Cities like Mandalay have long welcomed legions of Chinese traders and businessmen.

Nowadays US firms like Pepsi and Coca-Cola are not their only rivals — Japan and its corporations see Myanmar as fertile ground to grow their operations in the face of a weak domestic economy squeezed by a shrinking population.

Coupled with aid pledges and joint economic development projects, “Japan is the quiet but big mover,” said Sean Turnell, an expert at Australia’s Macquarie University.

Source: Agence France-Presse

Thanlyin oil refinery to be privatised

Thanlyin oil refinery will be the first to be handed over to foreign businessmen, amid the government’s planning to privatise state-owned refineries, petroleum plants, methanol plants and chemical fertilisers plants under the Ministry of Energy, according to sources from the energy planning department.

Thanlyin No.1 oil refinery will be renovated to produce standard oil products with crude oil from overseas. Ministry of Energy will arrange the transfer procedure on December 3 at Nay Pyi Taw.

While before the transfer of the whole factory, the ministry has planned to transfer the machine oil and lubricant oil combined plant under the Thanlyin No.1 refinery to local businessmen, according to sources from Myanmar Petro-Chemical Enterprise.

Currently Myanmar has three refineries, the Thanlyin oil refinery in Yangon region, Chauk oil refinery and Mann Thanpayarkan oil refinery in Magway region. These factories could produce 51,000 barrels per day at first and now they can yield only one-third of the previous output. That’s why the ministry has decided to transfer the factories to local and overseas businessmen to modernise the factories and to increase their output.

The overseas investors are preferred, since local businesses still lack experiences and certain expertise to run the oil refineries in modern ways, said an official from the energy planning department, who asked not to be named.

Source: 11 Media Group

Yoma to Buy 80% Stake in Myanmar Land Parcel

Yoma Strategic Holdings Ltd. said Monday it will acquire an 80% stake in a plot of land in Myanmar's largest city from its affiliate, giving it access to land in the developing country's tightly regulated real estate sector.

The deal comes as U.S. President Barack Obama became the first sitting U.S. president to visit Myanmar when he arrived Monday as part of a wider Asian tour, and could signal the beginning of a property boom in a country where there has been little economic development.

Yoma will pay US$81.3 million to Serge Pun & Associates (Myanmar) Ltd. for an 80% stake in its unit Meeyahta International Hotel Ltd., which is seeking approval from Myanmar's government to develop a 10-acre site in downtown Yangon, the Singapore-listed company said in a statement to the Singapore stock exchange.

Myanmar national Serge Pun has a 50.01% stake in Yoma, which is the Singapore-based affiliate of unlisted Serge Pun & Associates that was founded by Mr. Pun in Hong Kong in 1983. In 1991, he formed Serge Pun & Associates (Myanmar) Ltd., or SPA Myanmar, with a few partners.

Yoma, which has businesses ranging from real estate to plantation development, will jointly develop a mixed-use residential and commercial property development at the site with SPA Myanmar. The development will have a combined gross floor area of 2 million square feet and cost between US$330 million and US$350 million to build.

Yoma Chief Executive Andrew Rickards said Meeyahta is seeking to extend the lease of the land to 70 years, and the deal hinges on government approval for the lease extension and the project.

The two companies are "open minded" about bringing in more partners, he said.

"International partners may be interested in parts of the project," Mr. Rickards told the Wall Street Journal in a telephone interview, but didn't specify whether the company was in talks with potential investors.

The development, which is one of the biggest in Myanmar's real estate sector in recent years and will house hotels of an international standard, could provide relief to foreign visitors who often complain about the lack of good quality hotel rooms in Myanmar.

Yangon has about 8,000 hotel rooms, of which between 1,500 and 2,500 meet international standards, according to a report from Jones Lang LaSalle Hotels issued Monday.

"The provision of first-class hotel rooms, offices, apartments and retail is badly needed...to cope with the dramatic increase in interest in the country. The availability of land in central Yangon is extremely limited," said Mr. Rickards.

Myanmar was ruled by a military junta for almost fifty years, until a nominally civilian government took power last year following a broad set of political and financial reforms in the last two years, which convinced U.S. and European nations to drop most economic sanctions against the country.

The site, which houses an old hotel and a former railway headquarters built in 1877, is situated between Traders Hotel, which is owned by Shangri-La Asia Ltd. (0069.HK), the Sakura Tower, which is one of the few skyscrapers in the city, and Bogyoke Aung San Market, a popular tourist destination.

Under the plan, the Victorian-era railway headquarters will be restored and converted into a heritage five-star hotel. A luxury condominium, a four-star hotel, a serviced apartment complex and two office towers will also be built on the site, Yoma said in the statement.

It didn't specify when construction would begin or provide other details, but Mr. Rickards said the two companies are conducting preparatory work and construction will begin after it receives approval from the government.

To fund its investment, Yoma plans to sell shares in a one-for-four rights issue in the first quarter of next year. It will seek shareholders' approval for the deal before selling up to 241 million new shares that represent roughly 25% of the company's paid up equity, and said the rights issue has the backing of major shareholder Mr. Pun.

Yoma's shares, which were halted from trading in Singapore Monday, closed 0.9% higher at S$0.560 on Friday, while the broader market was flat.

Source: Dow Jones Newswires

Japan to provide Myanmar 602 mln USD new loan

Japan has offered to provide Myanmar a new loan of 50 billion yens (about 602 million U.S. dollars) for the development of the country's nationalities in border areas and construction of Thilawa Port and deep seaports, official media reported Tuesday.

The offer was made by Japanese Prime Minister Yoshihiko Noda to Myanmar President U Thein Sein in Phnom Penh on the sideline of the 21st Summit of the Association of Southeast Asian Nations ( ASEAN).

The loan will also be used in poverty alleviation, communications, Myanmar-host 2013 Southeast Asian (SEA) Games and 2014 Myanmar's ASEAN chairmanship, said the New Light of Myanmar.

Moreover, Japan would help train Myanmar officials in Japan, it said.

Noda reaffirmed Japan's support for Myanmar's reform process taken under the leadership of U Thein Sein, it added.

Japan, Myanmar's largest creditor, announced in October that it will clear Myanmar's overdue debt of 500 billion yens (about 6 billion U.S. dollars) next January and it will resume tens of billions of yens in concessional loan to Myanmar which is expected by early next year.

Japan had agreed to write off more than half of the 500 billion yens' debt already owed to it by Myanmar.

Meanwhile, three Japanese firms -- Mitsubishi, Marubeni and Sumitomo have agreed with Myanmar to develop the initial phase of 2,400-hectare Thilawa special economic zone (SEZ) in southern Yangon's Thilawa Port, which will feature factories, workshops and one natural-gas-fired power plant.

The three Japanese firms will obtain 49 percent's share to run the Thilawa SEZ, while Myanmar entrepreneurs in the form of public company, will take 56 percent.

According to figures, Japan injected a total of 221.25 million U.S. dollars as of August 2012 since 1988, standing the 12th in Myanmar's foreign investors line-up.

In the fiscal year 2011-12 which ended in March, trade between Myanmar and Japan nearly doubled, reaching 822.5 million dollars compared with 2010-11's 493.8 million dollars.

Source: Xinhua

Myanmar focuses on investment on sidelines of ASEAN summit

Thailand solidified agreements to establish a multi-billion dollar special economic zone with Myanmar here on Monday as the once sideliner state looks to jump- start regional investment.

A statement released on the sidelines of the 21st Association of South East Asian Nations (ASEAN) Summit stated that Thailand and Myanmar had agreed to move ahead with the Development of Dawei Special Economic Zone.

Thai Prime Minister Yingluck Shinawatra and Myanmar President Thein Sein also signed a joint statement on the project during a bilateral meeting on the sidelines of the ASEAN summit.

The project is designed to comprise of a world-class deep sea port, industrial estate complex and fully-supported infrastructure as well as a complete transport link to Thailand.

"The Dawei deep seaport together with the industrial estate and related facilities are to be implemented as another logistic and trading hub of the region in response to increasing trade within the East Asian region," the statement noted.

The planned deep sea port and industrial zone will serve as a new commercial gateway for Thailand, China and other ASEAN nations while providing an alternate sea route to India, Middle East, Europe and Africa that will reduce transportation time linking the Gulf of Thailand with the Andaman Sea and beyond.

It was earlier reported that Italian-Thai Development, Thailand 's largest contractor by market value, has been granted a concession to develop the project.

Cost of the project is estimated at 50 billion U.S. dollars with 8.5 billion U.S. dollars being needed for just the first phase of construction, resulting in the project running into funding snags.

In addition, Myanmar is also expected to hold talks with Japan and India on potential investment.

Meanwhile, the Economic Research Institute for ASEAN and East Asia is mapping out a multi-year economic plan for Myanmar that is expected to jump-start investment.

Over the weekend, the U.S. also rolled back decades of sanctions ahead of a historic visit by President Barack Obama.

Source: Xinhua

Peanut Oil price down post harvest, say trader

The price of peanut oil has been falling fast since the last week of October, industry experts said last week.

They said the groundnut (peanut) harvest took place in October, which coincided with a significant fall-off in demand from Chinese buyers who bought cheaper, home-grown supplies.

The result is a market flooded with supply.

“Chinese traders pay about 10.5 yuan a kilogram [equivalent to K2200 a viss – 1.6kg or 3.6 pounds],” said U Naing Win, an exporter based at the Muse border trading zone in Shan State.

“If the price of groundnut in Myanmar is higher than K2000 a viss, Chinese traders will not buy and will rely on domestic crops instead,” he said.

Customers are turning from popular peanut oil because the price of Malaysian palm oil is much lower and the product is freely available, say oil traders in Yangon.

“In August and September, peanut oil prices increased to a peak of K5000 a viss, while raw groundnut was selling wholesale for about K2400 a viss,” said U Sein Than Win, the owner of Wa Kyay Hmwe edible oil trading in Theingyi Market in Yangon.

“After the rainy season groundnut harvest, the price of oil fell to K4000, while raw groundnut was selling for K1800 a viss,” he said.

“I expect the price of oil to fall over the next few months. It should be about K3400 a viss in retail markets in order to increase customer demand. Otherwise, they’ll go for imported oil.”

“Many companies are importing palm oil from Malaysia and distributing throughout the country. Actually, sesame oil is more healthy, but Myanmar people prefer peanut oil,” said U Sein Than Win.

U Aung Linn, the owner of Aung Seik Hti peanut oil mill in Myingyan township, Magway Region, said the price of raw groundnut and the oil that is milled from it are linked.

If the peanut oil price falls, the price of groundnuts will also fall, and groundnut farmers will not get a good price for their crop – and will likely sow less the following season.

But edible oil dealers said farmers could make a profit even if the groundnut price falls to K1400-K1500 a viss.

“I believe the price of peanut oil will not rise because the rainy season crop has already been harvested and the winter crop will be harvested in December. On the other hand, Chinese demand is also falling,” U Aung Linn said.

“The price of peanut oil here is K3800 a viss, but with transportation charges and with small profits added, the price increases to K4000 in Yangon,” he added.

Peanut oil is selling for K4000 a viss in Yangon’s retail market, while palm oil is K1600 and sesame oil is K3200, a cooking oil trader said on November 15.

Source: Myanmar Times

Master Card introduced as 1st int'l electronic payment card in Myanmar

MasterCard was introduced as the first international electronic payment card in Myanmar operational with the first automatic tellers machine (ATM) installed in the country.

The introduction of the card is aimed at developing and supporting the existing infrastructure and further electronic payments acceptance to accommodate the growth of the business and tourism sectors in Myanmar, an official of the Cooperative Bank ( CB) authorized to offer service with MasterCard told Xinhua..

MasterCard Worldwide had issued a license to the CB in September this year,

Tourist and business travelers with MasterCard, Maestro or Cirrus card will now be able to withdraw money in local currency ( Kyat) at 36 CB Bank's ATMs across the country, including that in Yangon International Airport.

Using MasterCard at points-of-sale is expected to be available at hotels, restaurants, souvenir shops etc., within four months while Myanmar citizens traveling overseas can also expect to be able to use MasterCard within a year from now, Rona Rakhit, head of Business Development and Strategic Initatives Group of CB Bank told Xinhua.

The move is timely made in preparation for the upcoming Myanmar- hosted 27th Southeast Asian (SEA) Games in late 2013.

Meanwhile, Visa, one of the international credit cards, has signed deals with three Myanmar private banks -- Kanbawza Bank, Cooperative Bank and Myanmar Oriental Bank in Yangon for launching its card with the three banks' automatic tellers machine (ATM) and points-of-sale.

At present, 17 private banks have participated in the MPU program and all private banks would join in soon.

There is a total of 19 private banks and four state-owned banks in Myanmar.

The move-in of the international bank cards came after the United States eased some financial sanctions on the country, before which foreign visitors were unable to use international credit cards on account of such sanctions on money transactions since 2003.

CB Bank, a private bank in Myanmar, is one of the most established commercial banks in Myanmar, with the largest ATM network in the country.

CB bank has 29 local branches in the country. CB bank launched the first ATM in Myanmar in November 2011.

Source: Xinhua

Clothing factory opened at Hpa-an's first industrial zone

The opening of a new garment factory in a recently established industrial zone in Kayin State could relieve pressure on Yangon’s industrial zones, while providing jobs to local people who might otherwise emigrate, industry experts say.
Factory UMH-3 – named after U Myint Htay, owner of UMH Garment Industries – opened in Hpa-an township on November 6.
“Many factories are located in Yangon, which has led to the concentration of the work force there. This could lead to social problems. So U Myint Htay agreed to set up a factory here,” said U Myint Soe, chairman of the Myanmar Garment Manufacturers Association (MGMA).
“The factory can provide thousands of job opportunities. Myanmar has to prepare for entry into the ASEAN Economic Community in 2015,” he said.
“We anticipate that garment factories operating near the border would then move to the industrial zones of Yangon because we have good labour sources. If people can get the same wages in their home town, they don’t have to emigrate. And the government will benefit from their taxes,” he added.
UMH already has two factories in Yangon: UMH-1 in Shwe Pyi Thar township in Yangon Region and UMH-2 in Pyinma Pin Industrial Zone in Yangon Region. UMH-3 will be the first in Hpa-an. It will employ 150 workers, who have been undergoing training at the Myanmar Maternal and Child Welfare Association building in the township since February.
The UMH-3 factory will occupy about 20 acres, and another building, covering 50 acres, is under construction.
“I will set up factories here from UMH-3 to UMH-9,” said U Myint Htay at the opening ceremony for UMH-3.
U Zaw Min, Chief Minister for Kayin State, said, “The main source of jobs here is agriculture, which doesn’t pay enough. Most young people go abroad to find work. Setting up industry in Kayin State provides a great opportunity for local people, who will no longer have to leave home to make a living.”
Foundations for the Hpa-an Industrial Zone were laid in December 2011, in a ceremony attended by U Zaw Min.
“The zone is close to the city and near the airport, the Thanlwin River and the general vicinity of the proposed East-West Economic Corridor road linking Vietnam, Cambodia, Thailand, Myanmar, Bangladesh and India,” he told The Myanmar Times on December 7, 2011.
“This industrial zone will not only be connected to East and Southeast Asia but South Asia as well,” he said.
The zone is 7 miles (11.2 kilometres) outside Hpa-an and close to the recently reopened Myawaddy-Mae Sot border trading area with Thailand.


Source mmtimes

Myanmar's corn farmers could gain from US drought

The worst drought in more than 50 years that is affecting large parts of the United States is expected to reduce the nation’s corn output by about US$40 billion, according to the government and analysts.
At its height in July, more than 80 percent of prime US farmland was in drought and corn production this year is expected to fall by 13pc to 272 million tonnes, the US Department of Agriculture said. If the predictions prove to be accurate, the crop would be the smallest in nearly 10 years.
Dire crop forecasts have circulated for much of the summer and have been responsible for driving corn prices to record highs of $8.4375 a bushel (equal to 56 or 72 pounds or 25.4/32.7 kilograms depending on condition) on August 10, Dow Jones Newswires reported on October 23.
The reduced output is already putting pressure on exporters, ethanol producers and livestock owners by increasing the cost of doing business.
“We don’t have buffer stock and if we have another weather problem next year corn prices could explode again,” said Don Roose, president of US Commodities, Des Moines, Iowa. “We kept saying last year that we couldn’t afford a weather problem this year and look what happened, I kept telling people that weather is 80 percent of the market.”
According to global food price monitor Food and Agricultural Organization (FAO), export prices of corn in August remained close to the record levels reached in July 2012. The benchmark US corn averaged $328 a tonne, about 5pc higher than in August 2011.
Deteriorating crop prospects for corn in the United States initially underpinned export quotations, but prices eased towards the end of the month following heavy rains in areas hardest hit by drought.
After the US, China is the world’s second largest corn producer. Corn production in 2011 in China was forecast at 191.8 million tonnes and 8.1 million tonnes were imported. Average export of corn from 2008-11 was 100,000 tonnes based on FAO statistics.
Corn production in 2012 was forecast at 190 million tonnes, with a further 9.6 million tonnes slated to be imported, based on the forecast for 2012-13.
It is in this climate that Myanmar could benefit by feeding China’s need for corn.
Myanmar’s corn crop is mainly sown during the monsoon months, which typically stretch from May through September. The country’s corn sown area in 2011-12 was estimated at 1.017 million acres by the Department of Agriculture (formerly Myanmar Agriculture Service); of this, 88pc was sown during monsoon.
Total production was estimated at 1.46 million tonnes , with an average yield of 1.43 tonnes an acre.
Yields are comparatively high because many farmers use hybrid corn varieties, mainly CP brand, which are also requested by Chinese traders.
Average yields of hybrid corn are 60-70 baskets (1.47 -1.71 tonnes) an acre, compared with 30-40 baskets an acre (700-900 kilograms) for non-hybrid corn. However, hybrid variety corn also needs more fertiliser than non-hybrid strains.
CP company is involved in many aspects of the trade – it sells hybrid corn to farmers and then buys the milled feed, which is then used as nutrition for its chickens.
However, Myanmar’s corn is also sought after by Chinese traders, who buy up to 91pc of total exports.
Corn sown in northern Shan state is sent straight to the town of Muse on the Myanmar-China border, and then traded to Shweli (Ruili) in China. CP corn in Myingyan (Mandalay Region), Monywa (Sagaing Region), and Taunggyi (Shan State) is shipped to Mandalay, where it’s bought by traders to sell to China.
In Muse, the Ministry of Commerce established a trading zone at the 105-mile mark to facilitate Chinese trade. Commerce Journal, which is run by the Ministry of Commerce, maintains a regular corn price record based on free on board prices in Yangon. E-Trade Myanmar also keeps records of corn prices for 2012.
These show that corn price have been generally rising throughout 2012, hitting a high of about $414 a tonne in early September but have since fallen to about $316. By contrast, the average export price of corn ranged from $90-$250 a tonne during the 2010-11 year.
Myanmar’s corn exports have varied from 90,800-465,000 tonnes between 2001-02 and 2010-11. The 2010-11 fiscal year was the highest on record at nearly 465,000 tonnes, with 90.5pc exported to China.
However, with the shortfall in production in the US, prices are tipped to increase in China, India, Japan and Malaysia, which could be good news for Myanmar’s corn farmers.
The higher prices might affect poultry farmers by increasing the cost of feed, which will surely result in higher egg and chicken meat prices for consumers.
U Kyaw Myint is a former civil servant, and consultant with the United Nation’s Food and Agriculture Organisation’s Market Information Service Project, the Agriculture Market Information Service (AMIS) and E-Trade Myanmar.



Source mmtimes

Discussion of Directorate of Investment & Company Administration(Myanmar) (5)

Discussion with Mr. Jerry Schiff (JS) from IMF Staff Monitored Program Mission            IMF Staff Monitored Program Mission paid a call at office Building No.(32), Directorate of Investment and Company Administration at (14:00) pm on 12nd   November, 2012.           During the call, they discussed on investment incentives in the newly enacted Foreign Investment Law and the situation of establishing the Special Economic Zones in Myanmar in a cordial and frank manner. News 1 -------------------------------------------------------------------------------------------------- DICA Receives Delegation from Halla Group of the Republic of Korea           Responsible officials from Directorate of Investment and Company Administration (DICA) meet the delegation led by Mr. Chul Whan Je, Director of Mokpo Newport Terminal Co., Ltd. and Mr. Dong-Eung Min, Team Manager of Halla Engineering & Construction Corp which are the affiliate companies of the Republic of Korea at Office (32), at (11:00) am on 12th November, 2012.           During the discussion, they exchanged views on investment opportunities in the area of hotel and service apartment construction and motor car assembly factory in Myanmar. News 2
Source DICA

Index Creative Village to form two more JVs in Myanmar

Leading event organiser Index Creative Village plans to set up two more joint-venture companies next year to support its business in Myanmar after the establishment of Myanmar Index Creative Village.

MICV is a 50:50 joint venture formed this year with Yangon-based media and entertainment giant Forever Group.

"Myanmar will become a source market for the company in the near future," co-chief executive officer Kriangkrai Kanjanapokin said |yesterday.

"Under the country's political stability, its gross domestic product is estimated to grow by 7-8 per cent annually as foreign investors keep seeking new business opportunities there."

After a series of bold economic and political reforms, there will be a number of key international and regional events held in Myanmar through 2015.

Next year, Nay Pyi Taw will host the 27th Southeast Asian Games, while the country will also hold the 22nd World Economic Forum on East Asia in May.

In 2014, Myanmar will take the Asean chair and be responsible for hosting at least 700 related meetings and events.

Myanmar has also announced 2015 as its Tourism Year.

In light of all these planned activities, Index Creative Village plans to invest at least Bt100 million in event-related equipment and technology in the neighbouring country to increase its capacity to meet demand from government, multinational companies and Thailand-based businesses operating in Myanmar.

Kriangkrai said his company's subsidiaries - equipment supplier Event Solutions and market and consumer research agency Environsell - had sealed separate deals with Forever Group's |subsidiaries to set up JVs in Myanmar.

SUPPORT

Meanwhile, Index Creative Village's strategic partner, Xcon - Thailand's leading exhibition solutions provider - plans to form another JV with subsidiaries of the Myanmar media and entertainment group. These three new companies will support MICV and secure its business sustainability, particularly after the Asean Economic Community comes into force |in 2015, he said.

The company has also set up a dedicated team to take care of the Asean market for business development, marketing and sales, led by Asean regional director Narindej Thaveesangpanich.

Narindej said the events industry in Myanmar, estimated to be worth Bt300 million, was expected to enjoy growth of 15-20 per cent year on year.

This year, the company has so far generated Bt50 million in revenue from Myanmar and Vietnam, below the target of Bt100 million, Narindej said, adding that next year it hoped to achieve Bt150 million in those countries via its TVM Index Advertising joint venture.

Index Creative Village hopes to enjoy a 38-per-cent surge to Bt2.8 billion in overall 2012 income, above its original target of Bt2.25 billion.

Source: The Nation

SCB enters Myanmar

Siam Commercial Bank will open its first representative office in Myanmar's capital late this month.

The move is part of its plan to broaden its business in the region ahead of the upcoming Asean Economic Community (AEC).

SCB is focusing on expanding its services in Asia, starting with Asean and then East Asia.

The Myanmar branch is a major step for the bank, especially now that Myanmar's foreign investment law has been revised to support more foreign investment, said Manop Sangiambut, executive vice-president for international banking business.

The bank plans to set up a joint-venture bank or upgrade a branch to fully serve customers in accordance with liberalisation plans being introduced by Myanmar's government.

SCB's Yangon office will serve Myanmar customers looking to invest, trade and do business abroad.

SCB has cooperated with eight local banks in Myanmar to provide cross-border fund transfers, import-export services, currency exchange and business matching.

Source: Bangkok Post

Foreign Investors eye wood production sector

Asian countries are preparing to enter Myanmar’s teak and hardwood business, a source from the Ministry of Environment Conservation and Forestry said.

Delegations from China, Japan, India, South Korea and Thai have met officials from the ministry early this year.

Inspections have been conducted on teak and hardwood products manufacturing factories, paper mills and teak plantations.

Prospective companies include MKTI and HANA from South Korea; Daio Paper, Oji Paper, Mitsui, Kansai and JOPP from Japan; JK Paper and PL Global IMPEX from India; and Thai-based Japanese company Double A.

Myanmar produces about 283,000 cubic metres of teak and 1.98 million cubic metres of hardwood annually. It is also a major exporter of teak, taking up 75 per cent of the global market. It ships teak to China and India, among others.

Myanmar plans to ban timber exports by April 2014 to save its forests.

In 2011-2012, the country exported 371,000 metric tonnes of teak and 1,789,400 metric tonnes of hardwood.

Source: 11 Media Group

Japan plans to buy Myanmar food and beverages

Kokubu & Co Ltd from Japan is interested in importing food and beverages from Myanmar and came here to analyse seven food products and beverages businesses in October, according to sources from the Myanmar Agro-based Food Processors and Exporters Association.

The company studied seafood and processing, a chilli sauce factory, beverages, beer and liquor, a noodle factory and jam processing factory.

Source elevenmyanmar

Myanmar shipyards picks Vietnam firm for JV

Myanma Shipyards will enter into a joint venture with Dong A Shipbuliding Industry JSC from Vietnam, said Kyi Soe, director general of the local firm.

Dong A Shipbuliding Industry JSC is the mother company of Myint Mo Oo Company in Myanmar.

Myanma Shipyards, however, needs permission first from the Myanmar Investment Commission. If the commission approves, this will be the first joint venture with a foreign company under the new government.

The Vietnamese firm will invest 49 per cent of the total capital of US$81 million. The venture is expected to start in 2013.

The joint venture is meant to improve the company’s market competitiveness and acquire advanced technology.

Source: Weekly Eleven Media