Friday, 30 November 2012

Vietnamese mobile telecom company steps into Myanmar

YANGON, Nov. 30 (Xinhua) -- Vietnam's state-owned company -- Vietnam Mobile Telecom Services Company (VMS) has stepped in Myanmar market, launching a representative office in Yangon, official media reported Friday.
The move shows Vietnam's vision on market opportunities in the Myanmar telecom industry.
Nguyen Dang Nguyen, deputy director of Vietnam Mobile Telecom Services Company (VMS-MobiFone) and chairman of Vietnam Post and Telecommunication Group(VNPT)-Global, said Myanmar is altering daily to encourage foreign investors in different fields, especially the telecommunication and information industry.

Myanmar exports raw salt to Bangladesh

The western Rakhine state exported 3,000 tonnes of raw salt to Bangladesh over last three months.
The salt was exported in three shipments via Sittwe border trade centre. The first installment was despatched on September 8.
The rate for 1 viss (1.65 kg) of raw salt has been fixed at 60 kyats.
However, the price will be “adjusted” for the next shipments, Hla Mg from Hla Nyi Tun Company said.
Not all of the 12 groups of salt exporters are currently exporting the salt, he added.

source: Eleven Myanmar

Thursday, 29 November 2012

Burma lacks capital to develop wealth of resources: ADB

The Asian Development Bank (ADB) says that while Burma has a “wealth of possibilities for power generation,” it lacks the capital to develop them.

“Myanmar’s energy sector has suffered from decades of under-investment, and only one in four people currently have electricity access,” said Anthony Jude, the Director of the Energy Division in ADB’s Southeast Asia Department. “As Myanmar continues to open up, there is a remarkable opportunity to utilize domestic energy resources to power the country’s development, but it’s essential that strong, enforceable environmental and social safeguards be firmly in place.”

Japanese bank announces deal with Ayeyarwady Bank

Japan’s Juroku Bank has announced a deal with Burma’s Ayeyarwady Bank, according to a report in the Japan Times on Thursday.

The move marks “the first such arrangement between a Japanese regional lender and a Myanmar financial institution to help Japanese companies set up in the country,” the report said.

Under the agreement, Juroku Bank, which was founded in 1877, will provide its client companies with information about the business environment and the legal system in Burma, the Japan Times reported.

On a consolidated basis, as of the end of March 2012,

Juroku Bank announced it had total deposits of ¥4,881 billion (US $59,387 million), and total assets of ¥5,488 billion (US $66,773 million).

Ayeyarwady Bank, which was founded in August 2010, has capital equivalent to about ¥24.2 billion and has 28 offices.

source: Mizzima

Land Rover's Southeast Asia partner hungry to get into Myanmar

BANGKOK, Nov 29 (Reuters) - Land Rover vehicles in the hundreds have found their way into Myanmar over the past year as the country has opened up. Now Jaguar Land Rover's partner for Southeast Asia is laying the groundwork for its first official foray into the territory.
Discussions are under way with three potential dealership partners in Myanmar and official sales should begin in 2013, Dale Jones, chief executive officer of Guava International, told Reuters at the 29th Thailand Motor Expo.

Myanmar to host US-Myanmar Economic Conference

Myanmar will hold the US-Myanmar Trade and Investment Relationship: The Path Forward Conference in Yangon on February 25, 2013.

Held at the head office of the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (RUMFCCI), “this conference will be the very first economic forum for US and Myanmar. The event will be co-organised by RUMFCCI and US Chamber of Commerce," Zaw Min Win, vice chairman of the RUMFCCI, said.

Citizen investment amounts to 2 trillion kyats

As Myanmar businesspersons have increased their investment of 565 billion kyats (US$662.76 million), the total amount of their capital has amounted to 2 trillion kyats in 2012, according to the statistic of Directorate of Investment and Companies Administration.

Most of the local investments have flowed into construction, transportation, real estate and manufacturing sectors. Between the first week of October and the third week of

GIZ to help Myanmar with loans for SMEs

German International Cooperation (GIZ) will offer 4.5 million euros (US$5.82 million) to Myanmar as an aid for the development of its small and medium enterprises (SMEs).

“We have already signed the Letter of Intent with GIZ in order to offer loans to SMEs,” said an official from the Ministry of Industry.

Aye Aye Win, Assistant Director of SME Development Department, said that 88 per cent of the country’s businesses are SMEs. She added that the government has transformed the Myanmar Industrial Development Banks into SME Banks in some cities, as part of the efforts to boost the development of SMEs.

Loi Hein Company to build industrial zone

A Myanmar company is eyeing foreign investors for an industrial zone on 3,000 acres of land between Yangon and Bago.

Dr. Sai San Htun, president of Loi Hein Company said they can start construction in two to three months if the Myanmar Investment Commission (MIC) grants them the permission.

The project will be an independent economic zone. San San Htun said at least two foreign companies have already shown interest.

The company, which is engaged in manufacturing, selling, distributing and marketing of products, will be focusing on the textile industry for the project.

WTO to review Myanmar trade next year

Myanmar’s trade policy will be under scrutiny at the World Trade Organization (WTO) next year, an official from the Ministry of Commerce said.

Myanmar, one of the world’s least developed countries, joined WTO in 1995. From 1995 to 2012 February, a total of 320 trade policy review meetings were held.

"The Directorate of Trade is making apparent changes in Myanmar's trade policy. It is trying to increase Myanmar’s trade volume," the official requesting anonymity said.

The meeting on trade policy is scheduled in Geneva in November 2013.
source: Eleven Myanmar

Theinbyu port area in Yangon leased to presidential adviser

A member of the presidential advisory group has been allowed to run port services in Theinbyu port area in Yangon, including the construction of a jetty, sources from the Directorate of Investment and Companies Administration claim.

The Myanmar Investment Commission (MIC) leased out part of the port area to KMA Shipping Co Ltd owned by Khin Maung Aye, a member of the National Interest and Social Advisory Board under President Thein Sein.

Shangri-La plans to complete $100m commercial complex in Yangon by 2015

About US$100 million will be invested to build the Traders Square Commercial Complex near the Traders Hotel in downtown Yangon, an official from the Hong Kong-based Shangri-La Hotels and Resorts says.

A stake driving ceremony took place on November 14 and the construction is expected to finish by 2015.

Wednesday, 28 November 2012

Myanmar: Gold Mine or Sink Hole?

YANGON, Myanmar—Private-equity firms are divided over whether Myanmar will be a source of huge profits, or just another place to endure losses.

Some private-equity funds already are scrambling to raise cash to pour into the Southeast Asian nation, which has only just cracked open to Western investors after a secretive military junta stepped down in 2011. They see big opportunities in health care, real estate and other businesses that were starved of capital during five decades of military rule, while other Asian nations zoomed ahead. Yet many other firms, including big-name players such as KKR & Co. and Blackstone Group LP, are holding back.

The clash of views has important implications for Myanmar, which struggled to raise money during the years of military control and still has limited options for tapping international finance, despite more than a year of reforms. Western governments have lifted most of the sanctions they imposed over the past two decades to punish Myanmar for alleged human-rights violations.

But while multinational firms such as General Electric Co. and PepsiCo Inc. are looking for opportunities in Myanmar, many have focused mainly on selling products here rather than investing capital to build factories or other assets. To make matters worse, local banks still don't have lending systems in place to finance many major corporate expansions.

Silk Road Finance, an investment firm that recently opened an office in Yangon, says it has raised $25 million so far from private investors. Cube Capital, an investment company with offices in London and Hong Kong and $1.3 billion under management, recently invested in two Myanmar property deals worth more than $20 million. The firm is looking to raise up to $200 million for deals in several emerging Asian markets, with about one-fourth of the funds targeting Myanmar.

Others in the hunt include Leopard Capital, whose chairman is veteran emerging-markets fund manager Marc Faber, which is seeking to raise $150 million for two Myanmar-focused funds. Bagan Capital, with offices in Hong Kong and Myanmar, is also seeking to scoop up $75 million for Myanmar deals.

Some investors, however, worry that the political and economic risks in Myanmar are still too big, and that asset prices are getting pushed beyond reasonable levels. Others figure any deals to be had will simply be too small.

And there are lingering questions about legal protections for foreign investors, and how the funds will be able to exit their investments even if they do well. Myanmar has no corporate bond market or stock exchange of note, and only a rudimentary banking system, limiting the ability of investors to cash out of their investments through the local markets.

"I assure you that all the projects now in Myanmar will fail," said John Van Oost, founder and managing partner of Yishan Capital Partners, an investment firm with offices in Singapore and Indonesia that specializes in real estate. Land prices already are too inflated there, he said, and it isn't yet clear which local partners are reliable.

"A lot of people are rushing into Myanmar. We don't think that market's ready," said Ming Lu, regional leader for KKR in Southeast Asia.

To be sure, business leaders, both foreign and local, widely expect Myanmar to become one of Asia's fastest-growing economies if overhauls continue. But a failure by companies to get capital from outside investors could delay economic growth. In turn, a sputtering economy could dash the hopes of Myanmar's 60 million people, many of whom are expecting to see benefits from recent changes.

More skeptical private-equity players in Asia say they have learned from previous market openings—especially Vietnam in the 1990s—that first movers don't always make money, in part because changes rarely move as quickly as investors hope.

Myanmar also has seen private-equity investments go sour before, during a brief economic opening in the 1990s. Still, more adventurous investors are betting that they will be able to secure relationships with the most reputable local entrepreneurs and lock up some of the best opportunities.

"It's the first in, the early mover, that benefits from the best deals and the best relationships," said Kenneth Stevens, a managing partner at Leopard Capital.

Alisher Ali, who previously launched an investment bank in Mongolia and now runs Silk Road Finance in Yangon, said he became convinced Myanmar's reforms were real on April 1, when famed dissident Aung San Suu Kyi was elected to Myanmar's Parliament after 15 years under house arrest. A few weeks after his first trip to the country, Mr. Ali moved from Mongolia with his family.

By September, he had raised $25 million from wealthy individuals in Russia, Kazakhstan and Mongolia, he said, money he plans to invest in media companies, telecom firms, health-care providers and other businesses. Although there are "massive risks," the opportunity is too big to pass up, he said.

source: WSJ

Myanmar Generates Real-Estate Interest

THANLYIN TOWNSHIP, Myanmar—A possible scene from the future of Myanmar, one of the world's poorest countries, is taking shape on a bluff here overlooking a muddy stretch of the Bago River.

When finished, the Star City development will have an 18-hole golf course, at least 20 residential towers—some as high as 16 stories tall—24-hour security and waterfront restaurants. The million-dollar sales center has model condominium units with amenities rare in impoverished Myanmar, like walk-in closets and flat-screen TVs. More than 80% of the first 850 units under construction are sold.

"We're inventing the market" in Myanmar, says Soe Thiha Hlaing, director of sales at Star City, a project of local developer Serge Pun & Associates and its Singapore-based affiliate company, Yoma Strategic Holdings Ltd.

As Myanmar escapes from years of sanctions that largely locked it out of the global economy, the country's real-estate market is among the first sectors to attract serious investor attention. Global hotel chains including Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc. have expressed interest, while Hong Kong-based luxury chain Shangri-La Hotels and Resorts is working on a pair of 21-story residential towers for serviced apartments set to open in mid-2013.

Yoma Strategic Holdings, whose backers include U.S.-based investment management firm Capital Group, said Monday it was planning a two-million square-foot, mixed-use development in downtown Yangon with two grade-A office towers, a five-star hotel and condominium, a mall, and other properties. The project, with an estimated cost of $330 million to $350 million, is designed to incorporate a Victorian-era red-brick railway headquarters built in 1877 but now disintegrating after years of neglect.

Local and foreign developers have proposed at least three other towers in Yangon, including a $60 million, 34-story apartment building and a $100 million 38-story office building. The president of one of Myanmar's largest local banks recently unveiled plans for a mixed-use satellite city outside of Mandalay, Myanmar's second-largest city, that could cost as much as $2 billion if completed, according to local media reports. Private-equity funds are kicking in millions of dollars to finish real-estate investments that started but never finished during a short-lived economic opening in the 1990s.

The developers are lured by one of the most undersupplied property markets in Asia, if not the world, which is now seeing its first surge in demand in years. Yangon has only about 1,850 high-end hotel rooms, according to Colliers International, and 740 serviced apartments, even as the country is on track to attract around a million visitors this year. There are only about 680,000 square feet of office space—less than some single office towers in New York. Most of Yangon is made up of crumbling colonial buildings and mildewing shop houses with little of note built since the late 1990s, when Western governments slapped sanctions on the then-military regime.

A new, nominally civilian government took over last year and began freeing political prisoners and loosening constraints on the media, among other steps, which in turn has fueled renewed interest in the country of 60 million people from multinationals such as General Electric Co. and PepsiCo Inc. Myanmar leaders are considering passing a law to allow foreigners to purchase condominiums as early as early next year, which could further juice the market.

The average residential property price in Yangon shot up 39% in the first nine months of the year, according to Silk Road Management, a local investment management firm, while hotel room rates increased 65%—among the fastest increases in the world. Office rates have more than doubled since 2011 to as much as $75 a square meter (11 square feet) and will likely rise beyond $110 a square meter in the next two years, Colliers International says. In central Tokyo, office rents average between $60 and $65.

Several big issues stand in the way of a full-fledged real-estate boom. Myanmar's antiquated financial sector and primitive networks for moving money in and out will make it hard for international firms to manage development deals. Meanwhile, land prices are climbing so quickly that it could make many potential deals uneconomical.

"There are a lot of barriers to entry that are going to slow things down," says Matthew Fry, senior vice president of acquisitions and development in Asia-Pacific for Starwood. Even so, "there's definitely a first-mover advantage" for international firms that can overcome the hurdles most quickly, he says, just as there was for some companies like Starwood that launched hotels in Vietnam soon after its opening to foreign investors in the 1990s. Starwood has fielded about 20 inquiries from developers who want to launch Starwood-branded properties in Myanmar, Mr. Fry says, though it hasn't yet made a decision on how to proceed.

Land costs may present the biggest hurdle. Private-equity investors say they are seeing deals with land priced at $5,000 to $7,000 a square meter. At such high prices, many projects such as new industrial developments are unfeasible, says Serge Pun, whose Star City project is being built on land his company acquired many years ago at a time prices weren't as high.

Myanmar's government has responded by raising taxes on property transactions and calling on hotel owners to temporarily cap rates. It also is working on plans to build more low-cost housing and is considering creating a committee to craft further policies to control prices.

Meanwhile, first-mover projects are pressing forward, including Star City. The project, which was launched last December and whose total cost hasn't yet been finalized, is targeted at Myanmar's upper-middle class, which the developers believe will keep growing as Myanmar's economy opens. Spread across 420 acres about 20 minutes outside of Yangon, it is the kind of suburban enclave that is still uncommon in Myanmar, with plans for 9,000 housing units and a population of 25,000 people, as well as a water park, shops and restaurants. Because credit is hard to obtain in Myanmar, the development has counting rooms where buyers can hand over giant stacks of Myanmar kyat currency.

Buyers have included a few local pop stars as well as Myanmar residents living overseas who are becoming more optimistic about their home country. One of them is Htay Htay Yi, a 57-year-old single woman who works in a Singapore hospital performing ultrasound procedures, and wants to retire in Myanmar someday. She bought two units—a one-bedroom unit for about $47,000 and a two-bedroom one for $70,000—which she intends to rent out as investment properties for now.

"There are a lot of people who can afford this," she says.

source: WSJ

Myanmar To Serve As Gateway To South Asia, Says Thai Official

BANGKOK, Nov 28 (Bernama) - Thailand's neighbouring Myanmar will serve as a gateway to South Asia in the near future once physical connectivity within mainland Southeast Asia is fully available, Thai News Agency (TNA) reported.

During an economic seminar here, Akkasiri Buranasiri, director of Neighbouring Countries Economic Development Cooperation Agency stressed the importance of Myanmar as a gateway to the South Asian market comprising India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives.

"South Asia has a population of 1.6 billion people, two times larger than the 10-member Association of Southeast Asian Nations (Asean)," said Akkasiri.

The idea of developing physical connectivity in mainland Southeast Asia was first raised in 1993 as part of the Greater Mekong Subregion (GMS) development initiative.

Under this initiatvie, networks of land links are to be created and further developed into economic corridors connecting Southeast Asia with China and India and now expanding to cover Myanmar.

Olarn Chaiprawat, president of Thailand Trade Representatives and advisor to Thai Prime Minister Yingluck Shinawatra, said at the seminar that Myanmar also appears to be ready to serve as "garden" to Thailand's Kitchen to the World policy, thanks to the country's abundant resources such as seafood, rice, palm and rubber products.

Thailand could also expand investment projects into Myanmar in the food processing industry to ship processed food products to both West and South Asia, said Olarn.

The Thai government has focused on enhancing cooperation with Myanmar and South Asian countries through government-level exchanges of business visits.

source: Bernama

Country could become Asia's rising star: IMF

Myanmar could become Asia's next economic engine if it enacts vast reforms, the IMF said, signalling the country could receive a Fund monitoring programme in 2013.

"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," IMF mission chief in Myanmar Meral Karasulu said in a statement.

The International Monetary Fund said the discussions pointed to the possibility of a staff-monitored programme next year that would jointly monitor progress on the government's own reform plans.

Karasulu, who wound up weeks of talks with the finance minister, central bank chief and other senior officials, said the government had made rapid strides in reforms to modernise the economy since taking over from a military junta in 2011.

"Nevertheless, the government recognises there is still a long way to go," she said.

The IMF official said Myanmar authorities had discussed reforms over the coming year that would focus on continuing to unify the foreign-exchange rate, strengthening the central bank and improving revenues to fund its development needs.

In May, the IMF published its first report on Myanmar in decades, calling on authorities to step up reforms to enhance the business and investment climate, including modernising the financial sector and liberalising trade.

Myanmar is one of the poorest countries in Asia after decades of economic mismanagement and isolation under army rule.

Meanwhile, a total of 165 micro-credit companies were reported unlicensed in Nay Pyi Taw and other divisions and states, the minister of finance and revenue said at the micro-credit business coordination meeting.

According to the Money Lenders Act (1945) and the Small Loan Enterprise Act (2011), small loans companies are required to apply for a business licence. Any business that fails to obtain the licence will be penalised, the minister said.

source: The Nation

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: Eleven Myanmar

Kanbawza group sets up new office at Strand Road

Kanbawza group, Myanmar’s private company group specialising in a wide range of business such as banking and agriculture, has set up a new office at Strand Road, Kyauktada Township, according to sources from the group.

Kanbawza has the official permission to rent a six-storyed office building on long-lease term, but it remains unclear whether the group will turn it into the Kanbawza Bank’s head office, a spokesperson from Kanbawza Bank said.

The mega business group from Myanmar is expanding their business and office buildings and Kanbawza is constructing a new building next to their head office, according to spokespersons of the bank.

The Myanmar government has taken steps to privatise government-owned buildings since the end of 2008, and most big corporations and top company groups have made a success of tendering.

Kanbawza’s new office was formerly used by government sectors, such as the Civil Service Selection and Training Board.
source: Eleven Myanmar

EIA for Dawei project out by 2013

The environmental impact assessment (EIA) of Myanmar’s Dawei deep sea port and economic zone project will be completed early next year, sources said.

"Right now the draft and field surveys are complete. The environmental management plan is underway and the EIA is being finalised. Two public meetings will be held and they could all be completed in January or February 2013,” said Tin Maung Swe, the chairperson of the supporting team for the development of the zone.

Zaw Aung, a researcher from Chulalongkorn University in Thailand, said an EIA will show if a project has positive and negative impacts on the environment before actual construction begins.

The Team Engineering Group, Environmental Research Group, and Pamya Consultant from Thailand have been hired for the detailed assessment of the environmental impact of the project.

The industrial project will have a total area of 250 square metres and will be located in Ye Phyu Township in southern Myanmar.

The multibillion zone will be established in accordance with the Myanmar Special Economic Zone Law (no.8/2011).

Most government projects in the past never had to produce an EIA before they were built.

Projects such as the Kaladan River All-Round Development, for instance, produced its EIA after the project had started.
source: Eleven Myanmar

Singapore firms eye Burma’s telecommunications market

Singaporean telecommunications giant MDR Ltd announced on Monday that it was making plans to establish a joint-venture company with three other firms with a view to penetrating the nascent telecommunications market in Burma.

MDR’s CEO Ong Ghim Choon signed a non-binding heads of agreement on November 26 with Singaporean telecommunications firms Avitar Enterprises Pte Ltd and Be-Well Corporation Pte Ltd, and the latter’s subsidiary Be-Well (Myanmar) Company Ltd.

“The initial business of the JVC [joint-venture company] is to provide after-sales care and services of telecommunication devices to consumers in Myanmar,” the registration document said.

MDR will hold a 51 percent stake in the JVC, with each Be-Well company taking a 20 percent share, and the remaining 9 percent shareholding going to Avitar.

In addition, the JVC will look to enter into an exclusive agreement to provide consultancy and retail franchisee procurement services to Golden Myanmar Sea Co. (GMS) in the area of mobile handset and accessories distribution and retail.

GMS is owned by the Rangoon-based Myanmar Golden Star Group (MGS), which has interests in such diverse businesses as food and beverages, financial and medical services, farming, agricultural and natural resources, aviation, and consumer electronics trading and distributing.

MGS hit the headlines back in 1996 when, as local partner to PepsiCo in Burma, it was able to buy out the US soft drinks company’s share after campaign groups persuaded PepsiCo to boycott the military-ruled country. MGS went on to dominate the national soft drinks market.

source: Mizzima

Coffee deal brewing at FMI

First Myanmar Investment Co Ltd (FMI) has announced that it is to establish coffee plantations in Burma with a view to exporting coffee.

An agreement has been made so that the coffee plantations will be overseen by our subsidiary company, Myanmar Agri-Tech Ltd, in cooperation with ED & F Man Asia Pte Ltd, said a spokesperson from FMI in Rangoon.

ED & F Man is a global coffee trading company, founded in London in 1783. It currently operates in some 60 countries and has interests in the sugar, molasses, animal feed, tropical oils, biofuel and coffee industries.

The agricultural arm of FMI, Myanmar Agri-Tech has investments in castor oil, pepper and neem tree plantations, the latter providing much needed organic pesticide in Burma.
For its part, Rangoon-based FMI is a stakeholder in a variety of large-scale ventures, including real estate, manufacturing, trading, agriculture, and the automobile industry.

According to data from the United Nations Food and Agriculture Organization, Burma produced 48.08 metric tons of coffee in 2007. Coffee production is spread over a large number of states and divisions throughout the country. Arabica tends to be produced in the uplands in the north while Robusta is predominantly produced in the lowland southern areas.

source: Mizzima

JCB announces credit card deal in Burma

JCB is to become the third of the major global credit card companies to launch operations in Burma after its international subsidiary, JCB International (JCBI), signed an agreement with Myanmar Payment Union (MPU) to issue JCB cards in the country.

The company said it aims to expand JCB card acceptance early in 2013 and to launch a JCB card issuing program in the near future.

JCB, meaning Japan Credit Bureau, is the leading credit card in Japan and has increased its presence heavily in other parts of Asia in recent years. JCBI says its cards are now issued in 16 countries and territories, with more than 77 million card members worldwide.

Japanese press reported on November 26 that JCB—following in the footsteps of US giants VISA and MasterCard— had signed a Memorandum of Understanding for building a JCB ‘card acceptance network” and for issuing JCB cards in Burma through the member banks of MPU.

MPU was established by the Central Bank of Myanmar in 2011 with 17 local banks to promote the acceptance and issuance of payment cards in the country.

The MPU debit card scheme was officially launched in September among eight private banks out of the 17 members. Those were: Myanmar Citizen Bank, Myawaddy Bank, Myanmar Oriental Bank, Kanbawza Bank, Cooperative Bank, Asian Green Development Bank, and Myanmar Apex Bank.

It was announced that the first ATMs would be installed in the three main cities of Rangoon, Mandalay and Naypyitaw.

The cash amount an MPU card-carrying customer can request is set at a minimum of 1,000 kyat ($1.14) and a maximum of 5 million kyat (about $5,700).

On November 1, Co-operative Bank Ltd launched the first ATM in Burma at its head office in Rangoon. The name of the ATM service is “Easi Banking”.

source: Mizzima

Hitachi branch in Yangon starts operations

SINGAPORE--Hitachi Asia Ltd. on Nov. 26 said it has established a branch in the former capital of Myanmar to gather information and conduct market research in what is expected to be a growing economy.

Yangon Branch of Hitachi Asia (Thailand) Co., in the the city of Yangon, started operations on Nov. 26.

Hitachi has long contributed to the development of social infrastructure in Myanmar, supplying power generation equipment to local power plants since the 1950s.

Like many other companies around the world, Hitachi sees great potential in Myanmar, given its abundance of natural resources and its close proximity to China, India and fellow ASEAN member states. With a population of about 62 million, Myanmar also offers good prospects as a consumer market.


Myanmar: Open for business

Htay Aung, Myanmar's new minister for hotels and tourism, is busy trying to attract new airlines and hotels. "And our employees have to learn to speak English," he says.

Aung's position illustrates Myanmar's remarkable transformation from international pariah to budding Asian tiger. "We've become transparent, we believe in change," he says. And change they have: The country (which is also known as Burma) was ruled by military leaders until early 2011; for decades it was cut off from the rest of the world both politically and economically.

Myanmar's reforms have been handsomely rewarded: Barack Obama just visited the country last week, the first sitting U.S. president to do so. And with tourism a pillar of Southeast Asian economies, Aung plays a key role as Myanmar tries to attract not just political leaders but also the traveling masses.

"Myanmar is one of the world's hidden gems," he says. "The president [Thein Sein] is working to build relationships around the world, and democracy leader Aung San Suu Kyi has traveled around the world to express her ideas about the future development of the country and also to promote Myanmar as a destination."
Pagodas, ancient palaces, jungles and beaches rank among Myanmar's prime attractions -- as does the fact that, because of its long political isolation, it hasn't been ruined by commerce and rampant development. Last year, 313,127 foreigners visited Myanmar, a 5 percent increase from 2010. That figure dwarfs compared to the more than 19 million visitors who chose neighboring Thailand last year. In a new development, Thais now often cross the border to Burma to buy Chinese counterfeits of Western brands.

"We also have weaknesses," acknowledges Aung. "Our infrastructure, including telecommunications, roads and airports, isn't very good."

But Myanmar has succeeded in bringing several international airlines to Myanmar and is vying for more investments. Aung proudly lists his countries many, notable assets: "We're the largest country in Southeast Asia. We have historic edifices [and] hospitable people, and our country is safe."

Where to go

River Ayeyarwady: You can travel in a traditional steamer.
Beach at the Bay of Bengal: Myanmar’s beaches are pristine and not overcrowded.
Yangon: This is Myanmar’s largest city and its commercial and cultural hub.

When to go

November through February: You’ll find nice weather and very little rain.

source: METRO

Tuesday, 27 November 2012

ADB: Myanmar Needs To Harness Energy Resources To Power Growth

MANILA, Nov 27 (Bernama) -- 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 on Tuesday released its initial assessment of Myanmar's energy sector which showed the country has abundant energy resources that could be tapped for power generation and oil and gas exploration.

The most notable of these resources are hydropower and natural gas, Xinhua news agency reported.

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, and 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 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," said Anthony Jude, director of the Energy Division in ADB's Southeast Asia Department.

With Myanmar opening up, Jude said it is possible to use domestic energy resources to power the country's development by enforcing environmental and social safeguards.

source: BERNAMA

Monday, 26 November 2012

Demand for hotels booms in Yangon

Yangon, Myanmar's largest commercial city, has up to 8,000 hotel rooms at present, but this number is expected to rise by at least 36.7 per cent per year between now and 2016.

A new report from property consultant Jones Lang LaSalle shows that owing to the shortage of rooms compared to the large number of visitors since the country reopened, the average room rate has grown by 350 per cent from 2007 to 201.

The growth predictions are based on the assumption that all projects underway or in the pipeline get completed.

There has been a tremendous growth in the number of visitors to Yangon over the past year as Myanmar kicked off economic and social reforms, and as a result, hotels are now experiencing a significant boost in demand from both corporate and leisure travellers. However, major international brands from the United States and Europe are still relatively scarce in Yangon as economic sanctions have blocked them from entering the market.

"We expect hotel supply in Yangon to grow rapidly in the coming years, as a result of the shortage of rooms and pressure from the government to increase their capacity. We are estimating supply will increase by around 37 per cent per year up until 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 10 years until substantial suppliers enter the market. The expected supply and demand dynamics over the next few years will give operators the opportunity to substantially increase room rates," Andrew Langdon, senior vice-president of Jones Lang LaSalle, said.

The market comes with challenges as land acquisition is difficult and sources of funding remain opaque. Certain projects in Yangon are fairly speculative and there is a fair chance that they will not move forward. However, the new foreign investment law introduced this month is aimed at bringing in foreign capital to rapidly address shortages and help the economy grow.

The new law says that foreign investors will no longer require a local partner to set up a business.

Foreigners will be able to own 100 per cent of a company in Myanmar, with shares 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 exemptions of up to five consecutive years, while land leases have been extended to 50 years with options from the government to extend for an additional two 10-year periods.

In light of the projected influx of demand over the coming years and limited supply of international-standard rooms in Yangon, hotels have been aggressively renegotiating contracts with travel agents in an effort to increase their rates.

In response, the government has implemented a US$150 (Bt4,600) cap to try and mitigate higher room rates, but this cap is only applicable to rooms sold to travel agents or 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 season.

"Despite these 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 hotel 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

Korean banks eye Burma

South Korean banks are pushing to make inroads into the Burmese market in a bid to find new sources of income amid a saturated local market, The Korea Times reported on Monday, citing Korean officials.

South Korea's third largest lender, Shinhan Bank, is seeking to open an office in Burma as early as next year assuming that regulations banning foreign banks from operating in Burma are eased, the report said.

“The state-run Industrial Bank of Korea said it plans to apply for permission to open an office there [Burma] within this year,” The Korea Times reported.

Shinhan's main rivals Woori Bank and Hana Bank have already begun to tap the Burmese banking market by setting up offices in October.

“Woori Bank said it opened an office in [Rangoon] in late October with an aim to enlarge it into a branch or a wholly-owned unit in early 2014. Hana Bank also set up an office last month and has clinched a tentative deal to boost its strategic alliance with Myanmar's lender Ayeyarwady Bank,” the report said.

The South Korean banks' push into Burma also stemmed from their falling profits in a saturated local market, The Korea Times reported. Combined earnings by the 18 Korean banks amounted to 7.5 trillion won (US $6.9 billion) in the first nine months of this year, down 39 percent from a year earlier.

source: Mizzima

Myanmar to export plastic bags to Japan

Lucky Bag plastic enterprise of Myanmar will start exporting HDPE kind of thin, soft plastic bags 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 carrying kitchen wares. Only plastic without the logo being sealed will   be exported to Japan.

The move came following the agreement between the Myanmar company and some Japanese companies since a few months ago. Some Japanese companies started to discuss plastic export with Myanmar company for about one year ago.

"Three to four Japanese companies discussed with us to send plastic, especially kitchen pack to Japan. Shopping bags and large bags are asked to be exported to Japan later. We have sent sample plastic for three times and they like it and agree it to be sent at the end of this month. Only plastic bags without having logo will have to 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 plastic that is the same as the weight of a container. Malaysia, China and Vietnam are now exporting plastic to Japan. Therefore, Myanmar's plastic is likely to compete with the currently exporting countries.

"We aim to seek the export market. If the plastic export is convenient, that can do good things for plastic businessmen and provide job employment as well. We hope we will achieve success in our enterprise, but we do not see regular power supply. The plastic quality depends much on power," the managing director added.

The plastic will have to be officially exported to Japan for the first time and it is not permitted for local consumption.
source: Eleven Myanmar

Mega complex 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: Eleven Myanmar

Myanmar supports rice bloc, says MRF

Five rice exporting nations within the ASEAN bloc might be organised into a cartel with the aim of boosting prices by 10 percent, as well as lifting quality control, a Myanmar Rice Federation official said last week.

Dr Soe Tun, an MRF central executive committee member, told The Myanmar Times that President U Thein Sein had urged the federation to support the initiative, which would group Thailand, Vietnam, Laos, Cambodia and Myanmar together as one exporter.

He added that the preparatory framework for the cartel could be finished by the end of the year.

However, the Bangkok Post reported on Sunday, November 18 that the initiative had stalled because some of the nations were not ready to institutionalise cooperation in the industry.

Thailand initiated the proposal to form the cartel in August, with Laos, Myanmar, Vietnam and Cambodia agreeing to consider the idea, which would be backed by the creation of an ASEAN Rice Federation to help move the idea forward.

However, the Bangkok Post said the plan had drawn criticism from the Asian Development Bank, which labelled it globally irresponsible.

The Post reported that after talks with his Lao, Myanmar, Thai and Vietnamese counterparts on Saturday, November 17, Cambodia’s Minister of Commerce Cham Praseth said formal cooperation between the five countries had been shelved because several countries were not ready.

He said the countries would instead focus on what could be done within the region to improve rice production standards.

But Dr Soe Tun said Myanmar stood ready to back the plan.

“Our president is really willing to organise and cooperate with other countries to promote the agricultural sector,” he said. “So far Thailand is leading the way to organise the ASEAN 5-E group. We are focusing on the export sector.

“This organisation will mainly work on two items: to boost the quality of rice exports and increase prices,” Dr Soe Tun said.

“We discussed the formation of an organisation in Thailand on October 25 and some fundamental agreements and standards came out from that meeting,” he said.

ASEAN 5-E will also work together to set minimum quality standards for exports and to set prices, in much the same was that the Organisation of the Petroleum Exporting Countries does.

However, Dr Soe Tun said some of the nations that might join the bloc need to upgrade their rice production systems.

“In some agreements, we are concern about the weaknesses of some countries [Myanmar, Laos and Cambodia] because farmers in these countries don’t have the techniques and access to high-quality seeds that would allow them to export at a high standard.

“That’s why I am planning to add an agreement for cooperation to update growing techniques and provide quality seeds from the Myanmar Farmers Association,” Dr Soe Tun said.

source: The Myanmar Times

Myanmar to feed growing US appetite for tilapia

Myanmar plans to export farmed freshwater tilapia fish to the United States following the Friday, November 16 easing of an import ban, the vice chairman of the Myanmar Fisheries Federation said last week.

U Han Tun said US consumers have an appetite for tilapia – about the fourth-most popular plate species – but the federation needs to ensure that quality levels reach the standards required.

“Tilapia is the fourth most popular dinner species in the US but we’re trying to work out what we need to do to export to that market,” he said.

He added that the federation would work with Winrock International in a USAID-funded program to upgrade the species of tilapia for export and crab breeding, while another program will target goat breeding.

“We need to export high-quality fish to the US but the species we breed in Myanmar is not good. And we also need to contact potential buyers to assess transportation costs,” he added.

“Moreover, we must also sell our fish at a competitive price because other countries export this fish too,” U Han Tun said.

Myanmar’s fisheries products, including ocean-caught fish and freshwater prawn, will soon be exported to the US, he said.

He added that Myanmar will no longer need to export via third party nations, such as Singapore, as it had done in the past to avoid sanctions, which created a number of problems for exporters.

source: The Myanmar Times

“In the past, we had difficulties with remittance because we could only work through three state-owned banks. But there are more ways to remit money now and we can also link up with international banks,” he said.

Myanmar signs agreement on 120MW power plant in Yangon Region

The Ministry of Electric Power signed an agreement with Toyo-Thai Company to build a 120-megawatt gas- and waste heat-fired power plant in Yangon’s Ahlone township during a ceremony in Nay Pyi Taw on Friday, November 16, state-run media reported last week.

The agreement was signed by Toyo-Thai’s Thailand and Singapore companies and was witnessed by Minister for Electric Power U Khin Maung Soe, Minister for Industry U Aye Myint, Minister for Energy U Than Htay and Attorney- General Dr Tun Shin, as well as deputy ministers, department heads and company officials, the New Light of Myanmar newspaper reported on Sunday, November 18.

Speaking at the signing, U Khin Maung Soe said the project is to be implemented as quickly as possible in order to provide electricity to Yangon in the coming summer months.

He added that the plant would be expected to follow “non-environmental degradation policies”, adding that the ministry will cooperate with local and foreign investors to meet the state’s power needs.

source: The Myanmar Times

National Development Company Group owes four years’ tax: official

National Development Company Group has apologised to shareholders for failing to register the firm since 2008.

Chairman U Khin Shwe said at the 14th company’s annual general meeting on Saturday, November 17 that National Development Company Group has not paid tax to the Internal Revenue Department since 2007 but assured shareholders that the company has the tax owed in hand and was working to re-register the group.

“I tried many times to re-register the company but I failed,” he said.

“Last year the government gave permission for us to re-register. And I tried to re-register at that time but was unable to do so because the company could not provide tax receipts for the past two years.”

However, a company official later clarified that the group actually owes tax for four years.

“We have the money we owe in tax for the past two years but we must get our company re-registered first. If we can do so, we can clear our tax debt,” said U Khin Shwe.

The NDCG company official told The Myanmar Times that the company owes about K400 million (about US$473,000) in back taxes.

A spokesperson for Myanmar Investment Commission said companies that failed to pay the tax they owe will not be allowed to operate.

“If companies don’t meet their tax obligations they will not be allowed to register,” he said.

U Khin Shwe said the company’s failure to re-register meant it could not work in some sectors.

“Without a valid registration, the company can’t be involved in the export and import business as well as other international investments. Moreover, we can’t accept any foreign investments without a permit,” U Khin Shwe said.

“But we try to pay a dividend to shareholders every year,” he added.

NDGC has more than 3000 shareholders, who own more than 320,000 shares, with 680,000 shares unsold so far, the company official said.

The highest dividend paid to shareholders was equal to 36 percent of a share – and was paid out in 2002-03 and 2003-04 financial years. However, dividends were not paid in the 2007-08 and 2010-11 fiscal years, he said.

The company sold shares for K10,000 each in 1998 and the share price has increased to K14,000. However, the company only allowed shareholders to trade their shares with other buyers and did not buy them back.

“My father bought 50 shares before he passed away,” said shareholder Daw San San Aye.

“I like it when the company pays dividends but I’d prefer to sell my shares and invest the money in other ventures.”

source: The Myanmar Times
National Development Company Group has apologised to shareholders for failing to register the firm since 2008.

Siam Commercial Bank opens Yangon representative office

Thailand's largest commercial lender – Siam Commercial Bank – opened a representative office in Yangon on Friday, November 23.

Siam Commercial Bank (SCB) was granted approval to open the office by the Central Bank of Myanmar in April this year, and in the intervening months has organised seminars and information sessions to boost its profile ahead of opening the office.

The office, at 17 Kabar Aye Pagoda Road in Bahan township, was opened by chairman of SCB’s executive committee Dr Vichit Suraphongchai and watched over by officials from the Central Bank, Myanmar private banks and representatives of noteworthy Thai companies operating in Myanmar.

The opening was followed by a gala dinner in the evening that featured speeches by Dr Vichit, Thailand’s ambassador to Myanmar, and U Win Aung, chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry.

Dr Vichit said the bank’s presence in Myanmar represented a “mutual growth partnership”, and the bank wanted to play a role in the nation’s blossoming in the next 20 to 30 years.

“With this new office in Myanmar, SCB will have a presence in all countries in Indochina,” he said, adding that he was personally excited to be working in Myanmar.

“My excitement arises not just from the tremendous upgrade in business volume or the booming investment climate in Myanmar. My excitement stems from my personal desire to be part of something that could last 20 or 30 years and that later will be regarded as something historic,” he said.

“All of us can make history by being part of the emerging economic story of Myanmar,” he said.

“SCB has been active in Myanmar long before today. Today’s grand opening of our on-the-ground presence can only serve to further our commitment to Myanmar and its people,” he said.

source: The Myanmar Times

Myanmar reforms to lead growth: IMF

The International Monetary Fund has found that Myanmar’s growth in the coming year will be bolstered by the continuation of the nation’s rapid reforms.
In a statement issued on Wednesday, November 21, the IMF said that it expects growth to reach to 6.25 percent for the 2012-13 fiscal year.
“These reforms are already bearing fruit,” said IMF mission chief Meral Karasulu in a statement.
“Growth is expected to accelerate to around 6.25pc in FY2012-13, bolstered by foreign investment in natural resources and exports of commodities,” the statement said.
“Inflation has declined rapidly and should remain moderate at around 6pc next year. Meanwhile, the exchange rate has been stable in recent months, with international reserves increasing to US$4 billion,” the statement added.
The findings come after a November 5-22 visit by an IMF delegation. Over the course of the trip IMF officials met U Win Shein, the Minister for Finance and Revenue, U Than Nyein, Central Bank of Myanmar Governor and other senior Myanmar officials. They also met representatives from the private sector.
The IMF cited a number of steps undertaken by the Myanmar government as the reasons for its confidence in the country’s economic potential.
“The exchange rate regime has been changed from a peg to a managed float. The financial sector is being gradually modernised, starting with partial deposit rate liberalisation and the relaxing of some restrictions on private banks.
“This year’s fiscal budget was debated in parliament for the first time, yielding increased spending in critical areas such as health, education, and infrastructure,” the statement said.
New laws focused on microfinance and the long-awaited foreign investment law, which was passed by the hluttaw on November 1 and signed into law by President U Thein Sein the following day, were also noted as key positive changes.
Despite the positive forecast and improvements, the IMF warned that Myanmar still has obstacles to overcome after decades of economic mismanagement that plunged the country into poverty.
“Nevertheless, the government recognises there is still a long way to go. 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,” the statement cautioned.
To achieve these two goals, the IMF laid out three priority areas for Myanmar’s macroeconomic reforms to continue moving forward.
Two of the areas focus on the transition to the managed float of the national currency – the kyat – that the government undertook in April, ending 35 years of a fixed exchange rate.
“First, consolidating exchange rate unification, which will be an important foundational step for securing macroeconomic stability, while at the same time boosting competitiveness and trade,” the statement said.
“Second, the recent move to a managed float will be accompanied by a consistent monetary policy framework, focused on achieving low and stable inflation.”
The IMF’s third recommendation was the lowering of debts and an increase in stable revenues in order to address the country’s substantial development needs that span multiple sectors.
The IMF said this could be achieved through a multifaceted approach but will not happen quickly.
“This will take some time, but steps are planned to strengthen revenue administration, simplify tax rates, broaden the tax base, improve public financial management, limit non-concessional external borrowing, and develop government securities markets,” the statement said.
The IMF is hopeful that the trip will lead to the formation of a Staff-Monitored Program in 2013. Staff-Monitored Programs are described as “informal and flexible instrument for dialogue between the IMF and a member country on its economic policies”.
No financial support is provided by the IMF under these programs.

source: The Myanmar Times 
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