Weekly Business News from Myanmar

Myanmar will export recycled plastic pellets to China due to the high demand of plastics pellets in China
Myanmar will be exporting recycled plastic pellets to China under a new agreement, according to an industry body. Arrangements are underway to export the plastic pellets, which are made from melting the old plastic materials, to China, said U Soe Min, acting chair of Recycling Subcommittee which is affiliated to Myanmar Plastic Entrepreneurs Association. Plastic resin pellets (also known as nurdles) are raw materials the size of a lentil used in manufacturing plastic products such as soda bottles, caps and food containers. Recycling plastic in this method also keeps it out of landfills where it can take 500 years to break down. Two months ago, a sample batch of recycled nurdles was exported to China, and the country said that it will be purchasing the full volume of export, he said. However, the exact amount and date of the export has not yet been discussed.
French energy giant Total and Germany’s Siemens have proposed scaling back their projects in Tanintharyi Region over the government financial terms
YANGON — The European consortium behind a 1,230-megawatt power project in Tanintharyi Region has proposed scaling back its plans amid stalled talks with the government over financial terms. However, a senior government official told Frontier the revised proposal is unlikely to be accepted and the project now faces the prospect of suspension or cancellation. French energy giant Total and Germany’s Siemens received a notice to proceed in January 2018 from the Ministry of Electricity and Energy for the Kanbauk project, which would reportedly entail investment of US$2.1 billion. The initial proposal included a liquefied natural gas floating storage regasification unit, the power plant and 450 kilometres of 500kV transmission lines linking Kanbauk in Tanintharyi's Yebyu Township with Payagyi in Bago Region.
Government will call for re-tender to upgrade on Kawthaung Airport in Tanintharyi Region
YANGON-As Tender winner Company Golden Myanmar Airlines relinquished rights to carry out the upgrading tasks on Kawthaung Airport in Taninthayi Region, government will be calling for a re-tender to upgrade Kawthaung Airport, according to the Ministry of Transport and Communications. “Golden Myanmar Airlines Public Company backed off from Kawthaung Airport upgrades. So, we are going to call for a re-tender. We have some criteria that must be amended. The remaining two companies will be competing to sign the contract,” Deputy Minister Kyaw Myo from the Ministry of Transport and Communications told The Daily Eleven. Plans were underway to upgrade three domestic airports: Heho Airport in Shan State, Kawthaung Airport in Taninthayi Region and Mawlamyaing Airport in Mon State to the international standard by joining hands with private companies.
Inflation rate in Myanmar reached 7.28 percent during 2018-2019 fiscal year
Inflation rates in Myanmar during the 2018-2019 fiscal year were two percent higher than anticipated. The inflation rate in March reached 7.28 percent, according to U Maung Maung Win, Deputy Minister of the Ministry of Planning and Finance, when he spoke at the recent session of the country’s highest legislature, the Pyidaungsu Hluttaw. Inflation rates reached 6.8 percent in the March of FY 2016-2017, and 4.03 percent during FY 2017-2018. “Because of the higher rate of the [U.S.] dollar, the currencies of many countries dropped against the dollar’s value. This had an impact on the Myanmar Kyat, causing higher local demand and reducing the value of our currency,” he added.
The Asia Foundation with the collaboration of UK's Department for International Development, published the first Myanmar Business Environment Index 2019 (MBEI) in Yangon
Businesses in Myanmar are concerned about infrastructure quality and skilled labour availability, the latest report on private sector economic governance reveals. The Asia Foundation has published the Myanmar Business Environment Index 2019 (MBEI), with support from the UK’s Department for International Development (DFID) through the DaNa Facility. The report is a diagnostic tool for government and the private sector to better understand the local business environment. It aims to provide the authorities at different levels with evidence to pursue decentralised economic governance reforms. Six key findings were highlighted by the report which includes the issue of formalisation, difficulty of bureaucratic procedures, businesses’ concerns, and challenges. Based on a nationwide survey of 4874 businesses in the services and manufacturing sectors, the MBEI reflects the feedback from private enterprises across the country.
Ministry of Electricity and Energy is striving its effort to produce 1,400 megawatts in Yangon in 2020
The Ministry of Electricity and Energy is making efforts to produce 1,400 megawatts in the Yangon Region in 2020, all of which will be used for Yangon. “Despite being the smallest in terms of area among other states and regions, Yangon consumes over half of the country’s electricity. Yangon electricity consumption is around 1,500 to 1,600 megawatts per year as its consumption rate increased to 20 percent despite the estimation of 15 percent,” she added. At present, the Ministry of Electricity and Energy is preparing to produce more electricity in the Yangon Region. Currently the Yangon Regional Government is working to build more power lines and power distribution points.
Thai listed company, TTCL Myanmar Power Co Ltd is making the progress on purchase agreement negotiation with the Myanmar Government for its liquefied natural gas power project (LNG) in Yangon
YANGON — Thai-listed firm TTCL says it is making progress on power purchase agreement negotiations with the government for its liquefied natural gas power project in Yangon and expects a deal to be reached by the end of the year. TTCL Myanmar Power Co Ltd general manager U Htet Aung Mon told Frontier on June 12 that the cost of the project had also risen significantly because of Myanmar Port Authority objections to the original plan. TTCL initially advised shareholders the project would cost around US$350 million, but recently disclosed it had risen to between $620 million and $640 million. Under its initial proposal, TMPC planned to deploy a floating storage and regasification unit on the Yangon River near its existing Ahlone power plant, and build 22 kilometres of transmission lines and 16km of gas pipelines. The plant would have been 356 megawatts. However, it was forced to come up with an alternative because of objections from the MPA, Htet Aung Mon said.
Myanmar Government needs to support the building of cattle pens in suitable local in order to help lower costs of transportation for the overland cross-border trade with China
The government should set up suitable holding pens for cattle on the Myanmar side that will help lower the costs of transportation for the overland cross-border trade with China. Currently, China buys one million head of cattle from Myanmar on a quota system with discussions over an agreement ensuring more stable demand being held. Points of discussion include demand that cattle health conform to World Organisation for Animal Health standards. Myanmar Livestock Federation for Mandalay chair U Kyaw Htin said while an agreement with the Chinese would soon be signed, the government should support the building of cattle pens in a suitable location rather than rely on the overland trade with China at Muse. He said costs could be lowered on the Myanmar side should there be such pens as cattle would only be transported to the border on demand. “No cattle will pile up at the border while waiting for Chinese buyers, should there be demand, we will transport it,” U Kyaw Htin said.
Yangon Region Government will invite local and foreign investors to participate in Yangon Industrial Zone development projects
At a press conference on June 3, Chief Minister of Yangon U Phyo Min Thein said that he welcomed the participation of both local and foreign investors to help establish new industrial zones, and upgrade existing ones. “Yangon has 29 industrial zones,” he said. “We have to rebuild or renovate all of them. Moreover, we have 11 industrial zone projects in hand, which will be implemented outside of the YCDCs [Yangon City Development Committee’s] administration. The projects that we have in mind will not be implemented only by the government, but instead by collaboration between the government and the private sector.” He added that beyond the industrial zone construction or upgrade projects, foreign investments are welcome for projects intended to improve the water treatment and sewage system. The new or upgraded industrial zones will use as a pattern the example of Thilawa Special Zone, which is considered to have been the most successful special economic zone in Myanmar.
Ministry of Commerce will allow foreign companies in Myanmar to export rice, specific foods and commodity items in order to raise the quality of Myanmar exports and boost international demand on local goods
The Ministry of Commerce (MOC) will now allow foreign and joint venture companies to export specific food and commodity items, according to Notification 24/2019 released on June 6. Foreign companies with recommendations from relevant ministries can buy the commodities from local producers will be issued licenses to export the goods. The aim is to raise the quality of Myanmar exports and boost international demand for local goods as well as to raise earnings for domestic producers. The MOC allowed a total of seven items including rice, meat and fish, value-added crops, pulp and paper, seeds, refined metals, semi-finished or finished fruit products and wood based furniture.