Weekly Business News from Myanmar

• 

  Pioneering Maubin industrial zone development in Ayeyarwaddy Region moves forward with strong interest from Chinese investors

  A Union committee’s decision removes a key obstacle to plans for a privately owned and managed industrial park on farmland in Ayeyarwady Region that has seen strong interest from Chinese investors. THE DEVELOPMENT of an industrial park in Ayeyarwady Region has taken a major step forward following a decision to designate hundreds of acres of farmland as suitable for industrial use. The decision in July by the National Land Resources Management Central Committee came with work expected to begin early next year. Maubin Development Public Co Ltd received approval from Myanmar Investment Commission last November to develop the park on 250 acres (101 hectares) of farmland in the rural township, on the vast Ayeyarwady Delta plain about 90 kilometres west of Yangon. MDPC has formed a joint venture with Shanghai Yangon Investment Co Ltd, which has a 55 percent share in the project, the Ministry of Information said in a May 2017 news release which noted that some of the 136 shareholders are farmers.
• 

  Bidding for new oil and gas fields to commence in first and second quarters of 2019

  Fresh bidding rounds for offshore and onshore oil and gas blocks will be called during the first and second quarters of 2019, according to the director general of the Ministry of Electricity and Energy’s Oil and Gas Planning Department. “Tenders for one block in an existing onshore field will be called before the end of the year and we’ve started preparing to submit the necessary documents to the President’s Office. For offshore and other onshore fields, bidding will be called in the first and second quarters of next year,” he said. If all goes according to plan, it will be the first time a bidding round is held under the current government. The last tender for work at Myanmar’s oil and gas fields was conducted in 2014 under U Thein Sein’s former administration. State-owned Myanmar Oil and Gas Enterprise (MOGE) will invite international tenders for oil and gas exploration and drilling and production activities in unoccupied onshore and offshore blocks in partnership with foreign oil companies, the ministry announced last month. Projects will be awarded under Production Sharing Contracts and Improved Petroleum Recovery Contract arrangements.
• 

  Government called for the crack-down on illegal border trading at Kachin, Shan, Mon, Kayah and Kayin State which are bordered with China and Thailand

  The government has begun an organised crack-down on illegal border trade at Kachin, Shan, Mon, Kayah and Kayin, which border China and Thailand, after orders were given to the relevant ministries to establish special task forces for the purpose, vice president U Myint Swe said at the (UMFCCI) on August 24. Arrangements are also being made for similar operations to take place in Tanintharyi region in the south, near Thailand, and Rakhine State, which shares the border with Bangladesh in the north. “Drug trafficking has been prominent in Rakhine state and must be controlled and stopped. We have already started preparations to crack down on illegal trade activities there,” U Myint Swe said. U Than Myint, minister for the Ministry of Commerce, said illegal smuggling of goods into Myanmar via the country’s borders has increased with better transport options and unguarded routes.
• 

  Korean Industrial Complex will submit its proposal to MIC and Union Government after signing an agreement with Mon State Government Committee to rent the land plot at the Sittaung Paper Mill in Kyaikhto Township in Mon State

  MAWLAMYAING-A Korean firm had agreed with the Mon State Government Committee to rent a plot at the Sittaung Paper Mill in Kyaikhto Township, Mon State. The firm will be submitting its proposal to the Myanmar Investment Commission (MIC) and the Union Government later on. “Mon State Government Committee agreed with Korea Industrial Complex - KIC about land rent. We are going to submit the proposal on land rent to the MIC as well as the Union Government separately. Now, it is at the beginning stage. They [KIC] told us it would become a mega industrial project which can compete even with Yangon. Plans are underway to prepare the land plot on the industrial zone project site which will include garment, rubber and automobile industries. Later on, they will also offer other entrepreneurs looking to invest in the zone. They had also observed Bago region but are likely to invest in Thein Zayat village, Kyaikhto Township, Mon State. If there will be any sizble vacant land, we are going to implement the industrial zones. Investors are especially, very important. If he or she will invest in our region, the industrial zone will be established. The industrial zone may be small or large as it will depend on the initial host of investors and their amount of investment. It is still just in a signing stage to rent the land plot. The MIC is likely to allow the proposal if the state government committee agrees to it and the proposal can pass this year. The project period will be two or three years long,” said Wunna Kyaw, Minister of Mon State Planning, Finance, Immigration and Population.
• 

  Swine industry faces difficulties due to the rampant illicit export of pigs from Thailand to Myanmar

  The swine industry is in a difficult time, given what is happening in the region and the impact those developments caused, an industry leader said. U Zaw Myo Tun, joint secretary from Myanmar Livestock Federation said that China decided to end imports from Vietnam, due to a territory dispute at sea, and Japan stopped the purchase of swine from Thailand for four months after discovering an infection involving swine-specific disease. As the Vietnam swine market collapsed, Thai brokers bought the animals with low price, resulting in Thai swine farms being infected with the disease. As a consequence Japan stopped Thailand imports for a four-month period. But, pigs from Thailand are still being exported illegally to Myanmar. The pork meat shipments have affected the domestic market.
• 

  Business people urged State Counsellor to reduce tax and bank loan interest rates in order to attract more local and foreign investors

  Leading businesspeople urged State Counselor Daw Aung San Suu Kyi to reduce tax and bank loan interest rates during a meeting in the administrative capital Naypyitaw on Tuesday. Potential investors are maintaining a wait-and-see attitude and Myanmar’s economy is experiencing a slowdown, said leading builder U Maung Weik. Reducing bank loan interest and tax rates will attract investors, he said. “As the interest rate on bank loans is 13 percent, businesses find it hard to profit. There is a need to reduce this rate temporarily to 8 or 9 percent. We believe many investors will come back into the market then,” said U Maung Weik. “An investor has to buy equipment to start a business and then pay a 30 percent tax. They have not even started the business but have paid a 30 percent tax already. So, we’d like that the tax rate be reduced to 5 percent for one to two years,” he added.
• 

  Vice President U Myint Swe supported access to reliable economic data at the meeting on Myanmar Micro, Small and Medium Enterprises (MSME) 2017 survey in Nay Pyi Taw

  A presentation for the Myanmar Micro, Small and Medium Enterprises (MSME) 2017 Survey was held at the Ministry of Planning and Finance building in Nay Pyi Taw yesterday morning, with Vice President U Myint Swe delivering the opening speech. In his speech, the Vice President said two surveys for the MSME population and two for quality in the production sector will be conducted within the years 2017-2018 and 2019-2020 to aid in establishing the “Myanmar Business Monitoring System” as part of the 2016-2020 Denmark-Myanmar agreement on development implementation with the Danish Government. The Vice President said Myanmar needs reliable data for setting fact-based policies, prioritized sectors, designing strategic plans and monitoring efforts. He thanked the Danish Ambassador and UNU-WIDER for providing financial and technological assistance. The MSME Survey includes over 71,000 commodity production businesses and highlights the needs for the development of SMEs and to increase their competitiveness while identifying their difficulties, said the Vice President. He added that the survey included invaluable data that charts a detailed map of the SME sphere in Myanmar.
• 

  Rakhine State Federation of Chamber of Commerce and Industries proposed the construction of a new port in Sittwe to the Vice President to facilitate Myanmar- Bangladesh trade

  To facilitate trade in Rakhine State, U Tin Aung Oo, chair of Rakhine State Federation of Chamber of Commerce and Industries, last week proposed the construction of a new port in Sittwe during a meeting with the vice president. He said the port, which should be able to handle vessels of up to 20,000 tonnes, could be constructed under a Public Private Partnership (PPP). The proposal was met with approval from the government. The proposal comes after a surge in the volume of goods handled in Sittwe over the past five years. According to statistics from the Ministry of Transport and Communication, the volume of cargo handled at Sittwe rose to some 350,000 tonnes in 2017-18 from 200,000 tonnes in 2013-14. However, the flow of goods bound for Yangon from Sittwe is just 37,000 tonnes, which is around one tenth of the volume at Sittwe.
• 

  Insurance Business Regulatory Board (IBRB) will allow foreign insurance firms to operate locally in the country by 2018- 2019 fiscal year

  The Insurance Business Regulatory Board (IBRB) will allow foreign insurance companies to do business in the country in the new 2018-19 fiscal year, which will commence October 1, U Zaw Naing, the board’s secretary, said on August 28. He said the IBRB, which was established by the Ministry of Planning and Finance in 2016, will allow foreign insurance companies to provide life and general insurance policies in 2018-19. The Insurance Business Regulatory Board (IBRB) will allow foreign insurance companies to do business in the country in the new 2018-19 fiscal year, which will commence October 1, U Zaw Naing, the board’s secretary, said on August 28. He said the IBRB, which was established by the Ministry of Planning and Finance in 2016, will allow foreign insurance companies to provide life and general insurance policies in 2018-19.
• 

  Myanmar’s state owned insurance company signed an agreement with a consortium of local and foreign firms to provide insurance to the buyers of government built housing units

  YANGON — Myanmar’s state-owned insurer has signed an agreement with a consortium of local and foreign companies to provide insurance to buyers of government-built housing units. The insurance will be available on tens of thousands of units – and potentially far more, with the government planning to build and sell up to 1 million homes over the next few decades. Myanma Insurance on Tuesday signed a memorandum of understanding with Myanmar’s Shin Ye Htut Group, which is working with Hannover Re of Germany, Malaysia’s International Risk Management Consultants and DIT of Japan. The agreement will enable Myanma Insurance to provide life insurance and fire insurance to buyers of the units, said director general Daw Sandar Oo. Speaking after the signing yesterday, she said DIT would provide financing for those buying units through the Construction and Housing Development Bank, while IRMC will “calculate the risk of the housing projects”.