Weekly Business News from Myanmar

Domestic banks have been slowed to act on a Central Bank of Myanmar's decision to allow equity injection of up to 35 percent by foreign banks to invest in their operations
Domestic banks have been slow to act on a reform allowing equity injections of up to 35 percent by foreign banks, with some citing continued confusion over the rules. DOMESTIC BANKS have been slow to act on a Central Bank of Myanmar decision that allows foreign banks to invest in their operations, with industry sources attributing their hesitation to a failure of the Central Bank to provide clarity over the change. A Central Bank regulation issued on January 29 that formally allows foreign banks to have up to 35 percent equity in Myanmar banking institutions was broadly welcomed by a business community eager for greater access to finance. A senior Central Bank official who asked not to be named told Frontier that up to the third week of February, they had yet to receive a proposal from a local bank for foreign equity participation. Some bankers said they were still unsure whether the regulation applied equally to public, private and state-run banks. U Than Lwin, senior adviser at privately owned KBZ Bank, said the regulation, which implements provisions of the Myanmar Companies Law that took effect on August 1 last year, lacks clarity.
Joint venture between Hong Kong based VPower Holdings Limited and local Zeya & Associates Co., Ltd, a 90 megawatt gas fired station was opened in Myingya township in central Myanmar to serve as an additional power supply in summer
A 90-megawatt gas-fired station was opened in central Myanmar to serve as an additional power supply in summer when the domestic electricity demand reaches its peak. Constructed by the Hong Kong-based VPower Holdings Limited and its local partner Zeya & Associates Co. Ltd., under build-operate-own (BOO) system, near a steel factory in Myingyan Township, Mandalay Region, the station will generate 90 megawatts in summer and 45 megawatts in the rainy season, during which the production capacity of hydropower stations is high, said Union Minister for Electricuty and Energy U Win Khaing at the launching ceremony. Normally, the station will burn 20 million cubic feet of natural gas per day supplied by Shwe offshore field, but thanks to the organic rankine cycle (ORC) technology, that raises the efficiency of generators by two percent, it uses less natural gas, the Union Minister explained. He then explained the tender process and test run of the station that has been supplying power for the public and industries of Myingyan, Taungtha, Nwatoegyi and Bagan-NyaungU townships, water pumping stations in Myingyan District and Myotha industrial zone since 1 February 2019 through the 132-kv subpower station.
Myanmar subsidiary of German retail group, Metro AG secured USD $ 20 million loan from the International Finance Corporation (IFC)
The Myanmar subsidiary of German retail group Metro AG has raised a US$20m loan from the International Finance Corporation, the private-sector arm of the World Bank. The subsidiary Metro Wholesale Myanmar is a 85pc-15pc joint venture between Frankfurt-listed Metro AG and Singapore-listed Yoma Strategic Holdings, offering one-stop wholesale food service distribution for hotels, restaurants, retailers, and offices. The IFC said the financing aims to drive up agricultural incomes as well as improve the quality and availability of local produce, benefiting buyers and end consumers. The terms of the loan were not disclosed. It also said the investment will help Metro source the majority of its produce from local farmers and companies, raising food safety standards and creating employment opportunities in food processing and logistic services.
Japanese businesses people are interested to do investments in Myanmar’s livestock and fishery sectors
Japan has taken interest in Myanmar's livestock and fishery sectors with its businesspeople preparing to do business in the country, said Aung Thu, Union Minister for Agriculture, Livestock and Irrigation. The minister disclosed the information during a seminar on all-round development of the country's fishery industry. "When I attended a forum related to investment in Rakhine State, many Japanese businessmen talked about this. They have great interest in the livestock and fishery sectors. Even the second and third largest companies from Japan are reportedly preparing to invest. Entrepreneurs in our country need to make greater efforts to catch up with pending development," said the minister.
World Bank will support the lower Burma Paddyland Development project in order to increase crop production and develop the agricultural sector in Myanmar’s delta regions
To develop the agricultural sector in Myanmar’s delta region, the World Bank supported the Lower Burma Paddyland Development Project, as part of the UN development programme. The Paddy I Project was carried out in Pyapon, Labutta, Ngapudaw, Bogale, and Wakema townships from 1976 to 1985. Paddy II Project was undertaken in Kyaiklat-Maubin, Bogale, Thanlyin, and Labutta townships from 1978 to 1990. The projects led to the formation of polders to expand agricultural areas, build sluices, canals, and other projects that will help with agriculture and irrigation. This has helped in reducing flooding, controlling freshwater, and enabling seasonal planting which have established the region as a formidable agricultural success for many years.
Rakhine State has the lowest workforce and the highest unemployment rate among all other states and regions in Myanmar
Despite having abundant natural resources such as a vast oil and gas deposits, Rakhine State has the lowest workforce and the highest unemployment rate among all other states and regions in Myanmar, according to an investment opportunity survey for the state. In the whole country, 67 percent of the population works and the unemployment rate is just 3.9 percent. However, in Rakhine State, working class represents only 52.6 percent while unemployment rate is 10.4 percent. Of all the states and regions, Shan State has the largest workforce with 75.9 percent and the lowest employment rate with just over 2 percent.
Yoma Strategic Holdings Ltd and Kokubu Group did the joint venture partner with KOSPA Limited to widen its service scope to other categories of logistics solutions Express Delivery and cross border deliveries
Yoma Strategic Holdings Ltd. and Kokubu Group today welcomed SF Holding Co., Ltd., a technology-led international logistics service provider based in China, as a joint venture partner in KOSPA Limited, subject to the satisfaction of certain conditions, according to a press release. SF Holding will acquire a 25 per cent stake in KOSPA for a consideration of US $ 4 million in newly issued shares, primarily to fund the expansion of KOSPA 's current fleet and its warehouse capacity. KOSPA offers warehousing and third-party logistics services in Myanmar including cold chain solutions, inventory management and transportation. For The newly formed partnership will build on KOSPA's Capabilities as one of Myanmar's Leading integrated Logistics service providers and aims to widen its service scope to other categories of Logistics solutions Express Delivery and cross-border deliveries. KOSPA intends to leverage SF Holding's technological expertise to strengthen its service offering.
Rakhine State Investment Fair 2019 attracted the total 30 proposals worth USD $ 5 billion from both local and foreign investors
A total of 30 agreements worth US$5 billion were signed at the Rakhine State Investment Fair 2019, with the state’s hotels and tourism sector topping the list of both local and foreign investors. “Local and foreign investors have submitted proposals to invest in Rakhine State as they see the State’s prospects. Thirty agreements were signed at the fair. Of them, 27 are Expressions of Interest, two are project proposals, one is a B-to-B MoU. The proposals are valued at $5.249 billion,” said Dr. Htoo Min Thein, the Secretary of the Rakhine State Investment Committee. The hotels and tourism sector has topped in the list of investments, followed by agriculture, energy, livestock and fishery, production, construction, human resource development, and other sectors. “Investors in the hotels and tourism sector focused on areas around Manaung, Ngapali beach, and Gwa beach. They have also shown interest in the livestock and fishery sector in northern and southern areas in Rakhine State. Fish and prawn units are expected to enter there,” said Dr. Htoo Min Thein.
Myanmar Investment Commission (MIC) gave the approval for establishment of South Korean- Myanmar Industrial Complex (KMIC) in Hlegu township
The Myanmar Investment Commission (MIC) has approved the setting up of a South Korean - Myanmar Industrial Complex (KMIC). During a meeting on February 20, the MIC gave its go-ahead for the complex to be established as a joint venture. The development and operations of the first phase of the complex, which will be run by the Korea - Myanmar Industrial Complex Development Co Ltd, will be on land in Hlegu Township, Yangon Region. Phase one of the project is expected to utilise 127 hectares out of 224 hectares allocated for the complex. KMIC will run as a 60/40 partnership between South Korea’s Land and Housing Cooperation and Myanmar’s Department of Urban Housing and Development under the Ministry of Construction.
Most of the international companies are demanding to amend the terms of the Production Sharing Contracts (PSCs) which can benefit for more oil and gas profit and attract more investments
Prospects in the Myanmar oil and gas sector are expected to improve this year, with the government planning to hold its first international exploration and production tender since 2015 next month. On February 22, the Ministry of Electricity and Energy (MOEE) announced that it will be holding international tenders for 18 onshore and 15 offshore blocks in Rakhine State this year. The tenders have been scheduled at a time when domestic demand for oil and gas far outweighs production levels. Currently, Myanmar is only producing around 50 million cubic feet of natural gas per day and around 6000 barrels of oil per day, according to U Than Tun (Oil), a former official of Myanmar Oil and Gas Enterprise (MOGE). At that level, Myanmar is producing just around 10 percent of the oil it imports and that is driving up costs for basic necessities such as electricity in the country, said U Than Tun, who was a director and advisor to the MOGE for 35 years.