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September 18, 2020

NEWS
ECONOMY

Kachin State Inks Border Business Park Deal With China-Myanmar Joint Venture

The Kachin State Government and Myanmar Heng Ya Investment Development Co. Ltd signed a Memorandum of Understanding for developing the Kampaiti Business Park.

U Wei Lin, Kachin State Minister for Finance, Revenue, Planning and Commerce spoke about implementing the business park project in line with the existing law. He also discussed matters related to job creation, trade promotion at Kampaiti gate, cooperation to combat illegal trade, and business opportunities for local people.

The Kampaiti gate is one of the border checkpoints between Myanmar and China. A proposal to upgrade the border gate was approved by the Kachin State government at the second state meeting’s 18th regular session. The Myanmar Heng Ya Development Company is a joint venture between Kampaiti Development Company and the Yunnan-Teng Yin Trading Company.

At an estimated cost of US$22.4 million (31.85 billion kyats), the Kanpiketi Business Park will cover nearly 70 acres (28 hectares) in the border town in northern Kachin State’s Special Region 1. The area is controlled by the New Democratic Army-Kachin (NDAK) militia, which is allied with the Myanmar military.

The business park project includes plans to construct a South Asia-Southeast Asia Culture Park (Zone A) on 12.65 acres, two Trade and Logistics Zones (Zones B and D) on 8.8 acres and 12.7 acres, a Border Inspection Gate (Zone C) on 5.1 acres and a Business Shop (Zone E) on 1.65 acres.

The joint venture company will implement Zone C first. It will include a border inspection gate, government staff housing, a waiting area and related facilities. The company plans to invite other investors to construct the other zones.

Between 1 October and 21 February of the current financial year, Sino-Myanmar trade at Kampaiti gate soared to US$141.24 million from $73.97 million in the year-ago period, according to data released by the Commerce Ministry.

Source: The Irrawaddy News Magazine

 

Companies to invest $24 m in CMP garment, bag making in Yangon

Companies will engage in CMP garment and bag making businesses in industrial zones in the Yangon Region including Thilawa Special Economic Zone by investing nearly US$24 million.

  • Fineline Company Limited (Hong Kong) will invest US$2.087 million in CMP bag making in Thilawa SEZ;
  • Genesis Myanmar Garment Co Ltd US$4.285 million in CMP bag making in East Dagon Industrial Zone;
  • South Frame Myanmar Limited, Estonia US$0.852 million in making photo frames;
  • Myanmar Journey Bags Co Ltd (Hong Kong) US$1.622 million in CMP bag making in Wataya Industrial Zone;
  • Kai Sheng (Myanmar) Industrial of Taiwan US$0.911 million in CMP bag making in Shwepyitha Township;
  • Jiangsu Soho (Myanmar) Garment Company Ltd (China) US$1.2 million in CMP garment business;
  • Si Yuan  (Myanmar) Co Ltd (Hong Kong) US$0.906 million in CMP garment business in Hlinethaya Township;
  • Sunrise (Myanmar) Fashion Co Ltd (China) US$4.5 million in CMP garment business in Thadukan Industrial Zone;
  • Ziran Non-Woven (Myanmar) Company Limited (Hong Kong) US$2.9 million in producing and exporting polyester fibres in Industrial Zone (4) in Shwepyitha township;
  • Allland Fashion Limited (China) US$1.002 million in CMP garment business in Hlinethaya Industrial Zone and some other Chinese and Taiwanese companies in CMP garment businesses in some industrial zones.

The latest investments approved by the Yangon Region Investment Committee will create 8,920 local jobs.

Source: Eleven Media Group

Myanmar govt reveals 58 national development projects in project bank

A screenshot of the Myanmar Project Bank website captured by The Myanmar Times.

The Myanmar Project Bank is an interactive web-based platform designed to highlight investment projects in line with the implementation of the Myanmar Sustainable Development Plan (MSDP) for 2018-2030. It can be found on www.projectbank.gov.mm.

The 58 infrastructure development projects include road, railway, port, airport, electricity, urban development, industrial estate development as well as agricultural development projects. The loftiest project is the Yangon Central Station, which involves an investment of more than US$2.1 billion.

The project bank represents “an online one-stop-shop, where all information on projects designed to implement the MSDP can be easily accessed with a single click,” according to the website.

It also establishes a reliable and transparent system which links major investment projects with appropriate sources of finance including Public – Private – Partnerships and provides more opportunities for the private sector to contribute to national development.

All the projects are strategic in nature and align with the MSDP.

Source: Myanmar Times

 

Virus outbreak could impact Myanmar garment factories by March

A file photo of a worker in a textile factory in China. The coronavirus outbreak in China has slowed the production of textiles for export to countries such as Myanmar. Photo - EPAThe Myanmar Garment Manufacturers Association (MGMA) said that half the garment factories in the country may have to shut down temporarily as soon as March, due to a shortage of raw materials from China.

Some 90 percent of the raw materials such as fabrics, textiles, and zips used by garment factories in Myanmar come from China, and supplies have been curtailed due to the coronavirus outbreak in China.

There are some 500 garment factories in Yangon Region. Of the total, 263 are Chinese-owned, 67 South Korean, and 92 local. The factories employ an estimated 500,000 workers.

Raw materials for the factories are imported from China by sea as well as across the border, but both routes have stopped flowing. Under the circumstances, garment factories run by South  Korean companies may stop operating in early March. Without any improvement in the situation, the stoppage may continue till the end of April.

For the flow of raw materials to resume, factories in China have to be operating at full capacity, but currently, just less than 60 percent of factories in China have resumed businesses and 50 percent of workers are not able to return to their workplaces yet. Even if factories in China were operating normally, there are difficulties with transportation and truck drivers cannot return their jobs due to travel restrictions in China.

It may take up to a month to obtain raw materials even when the situation returns to normal, and then Myanmar will still have compete with countries like Vietnam and Cambodia to buy the materials.

Source: Myanmar Times

Industrial zone in Kyaukphyu SEZ to be built at $30m

A Rakhine ethnic man collects oil from hand-cooped oil well on the shore of Kyaukphyu, Rakhine. Photo: EPA

An industrial zone project within the Kyaukphyu Special Economic Zone (SEZ) in Rakhine State will be developed for US$30 billion.

CITIC Consortium from China owns 51 percent of the industrial zone while the Myanmar government owns 49pc. The industrial zone will be developed on 2400 acres of land and a high-end housing project will also be constructed across 1235 acres.

The Kyaukphyu SEZ, which is expected to consist of the industrial zone and a deep sea port, will be developed across 4300 acres of land in total.

Myanmar will hold a 30pc stake in the SEZ, which will be developed in phases, while CITIC Consortium will invest 70pc.

Negotiations are now being held to start implementation of the first phase at $1.3 billion. This follows a concession agreement and shareholders’ agreement for the deep-sea port between the two countries during President Xi Jinping’s visit to Nay Pyi Taw last month.

Tenders will be called to carry out social and environmental assessments and geological surveys as part of the development process. Development of the Kyaukphyu port will enhance China’s presence in the Indian Ocean, allowing its oil imports to bypass the Strait of Malacca.

The SEZ is an important asset in the China-Myanmar Economic Corridor, which is part of China’s Belt and Road Initiative, which spans several countries in Asia. It will also be an important connecting point for the high-speed Kunming-Muse-Mandalay-Kyaukphyu railway project.

Source: Myanmar Times

New gas field discovered in offshore Rakhine

Photo: Posco International/poscointlSouth Korean conglomerate Posco International Corporation has discovered a new gas field in Block A3 at the Shwe natural gas project located offshore Rakhine.

The company confirmed that it had found a gas column of around 18 meters at its Mahar-1 exploration well after it began exploratory undersea drilling in Block A3 last month.

The discovery was made more than 2,500 meters into the seabed and could yield about 38 million cubic feet of natural gas per day, the Korea Herald has reported.

Posco International was also quoted as saying that it plans to drill a couple of appraisal wells at the site from 2021 and development plans for the field will be established 2-3 years later.

The Shwe natural gas project consists of Blocks A1 and A3. There are currently two existing gas fields – Shwe and Shwe Phyu – at A1. Up until Posco International’s Mahar-1 discovery, there was only one gas field – Mya – in A3.

Posco International has a 51 percent stake in the Shwe natural gas project, while Myanma Oil and Gas Enterprise, KOGAS and Indian companies Oil and Natural Gas Corporation and Gail Limited hold the remaining 49pc.

Shwe is a 35-year project with a remaining 29-year term. Commercial drillings have already started in A1, and will commence at the Mya gas field in A3 in 2025.

Source: Myanmar Times

China keen to invest in Dawei SEZ

Part of the new road that will connect Dawei to the Thai border in Tanintharyi Region. Photo - WWF

A state-owned Chinese firm has expressed interest to invest in the planned Dawei Special Economic Zone (SEZ) in Tanintharyi Region.

Getting impatient

Meanwhile, the Myanmar government will increase pressure on ITD as well as the Japan and Thai governments to kick start development at the Dawei SEZ. After years of delays and negotiations, changes have been made to the contractual arrangements with ITD for the development of initial industrial estate.

ITD has also been given until March 27 to reply to a final draft Land Lease Agreement prepared by the government. ITD will be given a period of five years to develop nine projects across 700 hectares of land at the SEZ.

G2G arrangements

The Thai government has agreed to provide a loan to complete construction of a two-lane highway connecting Dawei SEZ to the Myanmar-Thailand border. Construction on the 138-kilometre road actually began in 2018, after the Ministry of Natural Resources and Environmental Conservation approved the environmental and social impact assessment.

The Dawei SEZ project was first announced in 2008 but failed to start when ITD ran short of funds, leading to arrangements to develop the SEZ in two phases. The projects to be developed by ITD in the initial phase include a deep sea port, industrial estate and supporting infrastructure such as a power plant and liquefied natural gas terminal.

The project has also been delayed due to the lack of suitable infrastructure as well as social and environmental issues relating to the location of the SEZ.  When complete, the SEZ is expected to link the southern part of the Greater Mekong region, which includes Bangkok, Phnom Penh and Hanoi. It will also link Myanmar to India, Africa and Europe.

Source: Myanmar Times

Inflation peaks at 8.8% in December 2019

A woman arranges vegetables for sale at a market in Yangon. Government statistics show that inflation peaked last December. Nyan Zay Htet/The Myanmar Times

Inflation  in 2019 peaked at 8.81 percent in December, the highest level in 12 months, according to the latest available data released by the Central Statistical Organisation (CSO). In January 2019, inflation was 6.94pc.

The higher inflation levels are due to steeper electricity tariffs implemented by the government since July last year.

Other reasons include the rising price of food, including rice, oil, meat, vegetables and other basic commodities, which was mainly driven by volatile exchange rates, according to the CSO. That also affected the price of non-food items, mainly fuel, which is imported.

High inflation rates could adversely affect lower-income households and undermine business competitiveness, the World Bank noted in a recent report. That could hurt savers, workers with fixed wages, and lower-income households, which spend a large share of their income on food.

Myanmar’s external competitiveness could also weaken if its inflation rate were to exceed those of its major trading partners over a substantial period, according to the World Bank.

Source: Myanmar Times

Stock trades on YSX cross K1.25 bln in Jan

In the month of January, 196,836 shares worth around K1.25 billion were traded on the Yangon Stock Exchange. Currently, shares of five listed companies are being traded on the exchange.

The five companies listed on the exchange are: First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB), First Private Bank (FPB), and TMH Telecom Public Co. Ltd.

Last month, the price per share closed at K11,500 for FMI, K4,000 for MTSH, K8,400 for MCB, K23,000 for FPB, and K2,850 for TMH on the exchange.

A total of 2.4 million shares worth K13.39 billion were traded on the Yangon Stock Exchange (YSX) in 2019, a significant increase compared to the previous year. The YSX has also sought the government’s support to get more public companies to participate in the stock market and to help more institutional investors, such as financing companies, investment banks, and insurance companies, to emerge.

More than 2.5 million shares of three listed companies were traded on the YSX in 2016, and their value was estimated at K70 billion. In 2017, despite an increase in the stock trading volume to 2.6 million shares, the trade value was only K22 billion. In 2018, 2.3 million shares of five companies, worth K11.5 billion, were traded on the exchange, according to the annual report of the YSX.

Source: The Global New Light of Myanmar

Business matching event for French, Myanmar firms held at UMFCCI

French entrepreneurs met with their Myanmar counterparts at a business matching event organized at the headquarters of the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).

The French businessmen were led by Mr Francois Corbin, President of the French-Myanmar Business Council and ASEAN Committee for MEDEF International. They were accompanied by the French ambassador to Myanmar Mr. Christian Lechervy.

The French delegation included 20 entrepreneurs engaged in energy, water and sanitation, railway transportation services, infrastructure building, banking and microfinance services, gas, food, water transportation services, road transportation, and trading businesses.

Mr Christian Lechervy said the business matching event aimed to explore opportunities to link French entrepreneurs with their Myanmar counterparts, encourage interaction between private sector players, and promote opportunities through business relations.
As part of the programme, French entrepreneurs will also visit the Thilawa Special Economic Zone to explore potential investment opportunities.

In addition, vice president Dr. Maung Maung Lay spoke about the current economic climate and the investment and trade situation in Myanmar. Entrepreneurs from the two countries discussed potential investments and business opportunities. Between 1988 and December, 2019, 22 enterprises from France have brought in foreign direct investments of over $550 million into Myanmar.

Source: The Global New Light of Myanmar

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Thae Oo Myintzu
MMRD Insight—Editor
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