Weekly Business News from Myanmar

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  DaNa Facility and De Henus, international animal feed business have made a joint investment of over $ 3.2 million in a new project to increase the productivity of pig farmers across Myanmar

  The DaNa Facility, a UK Government Department for International Development (DFID) funded programme, and De Heus Myanmar, a leading international animal feed business, have announced a joint investment of over $3.2 million in an innovative new project focused on increasing the incomes and productivity of pig farmers across Myanmar. The investment will be the largest single business investment in Kayah State. The De Heus project will work to address significant issues facing domestic pork production in Myanmar, including problems related to the quality of feed, breeding stock, veterinary services, bio-security issues and the genetics of domestic pigs, which negatively affect pig producers and consumers across the country.
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  U Ngwe Tun, Founder of Genius Coffee tried to experiment with fermenting raw coffee husks and making wine for a strong boost in growth

  The founder of the Genius Coffee business U Ngwe Tun feels there is good potential for the company’s products in local and foreign markets. While the business is focused on growing, processing and distributing coffee beans, U Ngwe Tun is keen on injecting a dose of innovation into the company. He says he is looking into making coffee wine from coffee by-products. “Many coffee businesses just sell coffee beans but discard the husks. I am going to experiment with fermenting raw coffee husks and making wine,” he said.
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  Myanmar is targeting more foreign direct investments from East Asia in the long term in its new Myanmar Investment Promotion Plan (MIPP)

  Myanmar is gunning for more foreign direct investments (FDI) from East Asia in the next 20 years under its new Myanmar Investment Promotion Plan (MIPP), U Than Aung Kyaw, deputy director general of the Directorate of Investment and Company Administration (DICA) told The Myanmar Times at a book launch in Yangon on Thursday. Besides strengthening trade ties with its ASEAN neighbours, Myanmar will also target FDI from East Asia, which includes South Korea, Japan and Greater China under its 20-year investment plan, U Than Aung Kyaw said. “Our aim is to invite East Asian countries to raise their investments in Myanmar. We will work on policies that encourage FDI from that region,” he said. Currently, the bulk of FDI in Myanmar is from China, Singapore, Thailand and the UK. The shift east comes on dwindling expectations of major investments from the west, as international pressure mounts for action to be taken to ease the crisis in Rakhine, according to U Aung Naing Oo, director general of the Myanmar Investment Commision.
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  In cooperation with Japanese and Malaysian investors, Myanmar Agribusiness Public Company Limited (MAPCO) opened an Agri First fertilizer plant at Thilawa SEZ

  Myanmar Agribusiness Public Company Limited (MAPCO) in cooperation with Japanese investors and Malaysian investors opened an Agri First fertilizer plant at Thilawa SEZ on October 10. The plant, which will produce up to 100,000 tons of fertilizers, it has been implemented with $10 million in investments; 40 percent by MAPCO, 30 percent by Japanese investor Mitsui and 30 percent from Malaysian investor Meyer. “This plant will produce fertilizers—combination of minerals and nutrients such as nitrogen and potassium, which are necessary for farmers. In terms of technology, this plant will use machines made in the Netherlands and will produce fertilizer customized specifically for the soil in the country,’’ U Ye Min Aung, Director of Agri First, said.
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  International pressure is mounting in the west to force Myanmar to improve its human rights record although the US and EU are unlikely to impose sweeping sanctions on Myanmar

  Although the US and European Union (EU) are unlikely to impose sweeping sanctions on Myanmar as a result of the humanitarian crisis in Rakhine, international pressure is mounting in the west to force the country to improve its human rights record. In that light, Myanmar could face more trade sanctions in the coming quarters, according to a Fitch Solutions report released on October 17. As a result, the research firm has downgraded its GDP growth forecast for Myanmar to 6.6 percent in 2018-19 and 6.8pc in 2019-20 from 6.8pc and 7pc, respectively. “Although we continue to believe that the imposition of sweeping sanctions against Myanmar by western economies remains a measure of last resort, risks of such economically damaging actions have risen considerably, and we expect limited trade sanctions to be imposed over the coming months,” the Fitch report states.
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  Myanmar government is negotiating several power purchase agreements to meet rising demand: at the same times, there is also concern on whether Myanmar can afford its own gas

  As the scramble for more power sources intensifies, focus has centered on tapping Myanmar’s gas fields to meet demand. But can the country afford its own gas? Myanmar is under pressure to double its power production capacity to 6000 megawatts (MW) within the next two years, in order to meet rising demand. Several power generation projects, the most recent of which is the 225MW Sembcorp Myingyan combined-cycle gas plant, have commenced operations. Next month, a 40MW solar plant in Minbu is expected to come onstream. The government is also negotiating terms for several power purchase agreements under which it will buy liquefied natural gas (LNG) to meet the bulk of Myanmar’s energy requirements. While official announcements have yet to be made on this front, insiders and analysts warn that the LNG option, which will involve costly infrastructure and complex logistical requirements, is unlikely to come cheap.
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  Myanmar needs to address the rarity of fishery resources in order to boost fishery exports

  In order to boost fishery exports, the Myanmar Fishery Product Processors and Exporters Association highlighted the need to address the rarity of resources in its territorial waters used by commercial companies. “Because of the rarity of raw material [fish and prawn] our fishery processing plants can only prepare 3-4 tons of fish products per day, as opposed to a Vietnamese plant that is producing between 170-200 tons per day. All of this is because of a lack fish for the processing plants,’’ said U Tun Aye, President of the association. Most of the fish and prawn exported from Myanmar are caught in natural settings, which decreases the fishery resources available. The natural resources — fish and prawn — will only recover when they are bred scientifically in commercial fish farms, the stakeholders in the sector said.
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  Illegal trade and smuggling with neighbouring countries via unofficial trade routes took a heavy toll on the country’s economy

  Smuggling and illegal trade continue to be a major problems for the country’s economy, says the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). According to the Business Sentiment Survey issued by UMFCCI in May, illegal trade stands at sixth among the top 10 issues hampering the country’s economy. The survey was conducted to learn more about the current situation of businesses in Myanmar. Illegal trade encompasses products from neighbouring countries entering Myanmar via unofficial trade routes and also domestic products being smuggled out. The survey revealed that businesses feel that illegal trade is the second largest issue dampening sentiment, behind only a weak economy, and is among the top five points the government should address as part of efforts to boost the economy.
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  Myanmar Petroleum Trade Association urged the government to review the taxation system to stabilize local fuel prices

  Local fuel prices have surged in recent months causing the Myanmar Petroleum Trade Association to urge the government to review its taxation system in order to stabilize local fuel prices. As the tax system stands right now, fuel traders must pay a 2 percent advance income tax, 1.5 percent custom duty, 5 percent commercial tax, and 5 percent special item tax for a total of 13.5 percent. The association urged the government to make a review during the regular meeting between the businessmen and vice president U Myint Swe at UMFCCI. U Than Win Zaw, an executive officer of the association, stated that 2 percent advance income tax is triggering fuel prices and government needs to change 2 percent advance income tax payment to quarterly payments.
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  DaNa Facility, Myanmar social enterprise, Myanmar Artisan’s and international NGO Turquoise Mountain will fund a new investment of over $ 750,000 to support traditional Myanmar textiles and weavers industry in next two years

  Myanmar social enterprise, Myanmar Artisan’s, international NGO Turquoise Mountain and the DaNa Facility, a UK Government Department for International Development (DFID) funded programme has announced an investment of over $750,000 during the next two years into the Myanmar traditional textiles industry. The investment will initially take place in Kachin, Chin and Shan States but by the end of the programme will spread to other States in Myanmar. Myanmar is overflowing with rich, and diverse textile traditions that continue to live on through highly skilled weavers. The Myanmar Artisans project, through training, product development and forging better links to higher value markets, will use these traditions and skills to improve the livelihoods of women and underserved groups in the sector. It will work across the country, with an initial focus on the textile traditions of Kachin, Chin, and Shan States. It will also establish a central ‘cut and sew’ workshop in Yangon’s downtown area, keeping a crucial part of the tradition within the country, as well as focusing on product development and quality control.