Weekly Business News from Myanmar

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  Myanmar’s largest manufacturer and distributor of agricultural technology, Myanmar Awba Group opened the first private agrochemical production complex in Yangon

  Myanma Awba Group, Myanmar’s largest manufacturer and distributor of agricultural technology, launched Myanmar’s first private agrochemical production complex in Yangon Region on August 19. The US$35 million Hmawbi Agricultural Input Complex (HAIC) is located near Wa Nat Kyaung Village in Hmawbi Township, occupying 126 acres of land. Myanma Awba is providing up to $25 million to finance the HAIC, while the remaining funds have been provided by the International Finance Corporation (IFC). The agriculture sector contributes almost a third of the country’s GDP and provides jobs for at least 70 percent of the population. Despite this though, agrochemicals such as fertilisers and pesticides, which are necessary for agriculture, are mostly imported. As high quality agrochemicals are encouraged, farmers are seeing their costs of production rise by the year.
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  Central Bank of Myanmar (CBM) will launch a new currency swap facility in efforts to stabilize the value of Myanmar Kyat

  The Central Bank of Myanmar (CBM) will this week launch a new currency swap facility in efforts to stabilise the value of the Myanmar kyat, U Bo Bo Nge, deputy governor of CBM, told The Myanmar Times on August 19. The move follows a 6 percent deprecation in the value of the Myanmar kyat versus the dollar between July 16 and August 15, during which the CBM also held a series of meetings with local banks to discuss the situation. Following those meetings, The Myanmar Times last week quoted Azeem Azimuddin, CFO and advisor to the Chair at Ayeyarwady Bank, as saying that the CBM had agreed to finally consider permitting banks to trade derivatives such as forwards and swaps. “After careful consideration we have on August 19 decided to launch the first swap facility between the CBM and local banks. We have negotiated with the banks and will commence the swap facility early this week,” U Bo Bo Nge said.
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  Economic Development Zone will be created in Myitkyina with agricultural produce and value added goods given priority

  Union Minister for Commerce Dr. Than Myint said that an economic development zone will be created in Myitkyina. The zone will be established in Myitkyina, the capital and largest city of Kachin state with agricultural and produce section given priority and value added goods will be produced, according to Dr. Than Myint. He said so when meeting with officials from companies doing projects for establishing a new border trade post in Kan Pike Tee, where a border trade camp already exists to perform trade with China.
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  Ministry of Electricity and Energy issued the notice to the proceed to the developers of the 60 megawatt Deedoke hydropower project in Mandalay Region: Andritz of Austria, Kansai of Japan and High Tech Construction Trust (subsidiary of Shwe Taung Group)

  The Ministry of Electricity and Energy has issued a notice to proceed to the developers of the 60-megawatt Deedoke hydropower project in Mandalay Region. Ministry officials signed the notice with the developers – Andritz of Austria, Kansai of Japan and High Tech Construction Trust, which is a subsidiary of Myanmar’s Shwe Taung Group – at a ceremony in Nay Pyi Taw yesterday. The signing is seen as an important development for the hydropower sector, which has languished due to policy uncertainty since President U Thein Sein suspended the Myitsone dam in September 2011. At a power sector working group meeting on August 8, Minister for Electricity and Energy U Win Khaing said the ministry would also soon sign a notice to proceed with a second consortium led by state-owned Électricité de France for the 1050MW Shweli-3 hydropower project in Shan State.
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  Myanmar authorities will launch a livestock insurance policy by the end of this year so that breeders can receive loans from the banks to grow their herd

  Myanmar will launch an insurance policy covering livestock insurance for the first time in 30 years. “We estimate livestock insurance will be launched by year-end,” Daw Sandar Oo, managing director of Myanma Insurance, told The Myanmar Times. State-owned Myanma Insurance, the Department of Livestock Breeding and Veterinary under the Ministry of Agriculture, Livestock and Irrigation (MOALI), Singapore-based InfoCorp Technologies and Myanmar’s RGK+Z&A Group are cooperating to launch the livestock insurance pilot project, which will be supported by the bank. The insurance application process will involve registration of the livestock using InfoCorp Technologies’ tamper-proof livestock identification tagging technology. This involves inserting a digital chip into each animal, said U Zeya Mon, CEO of RGK+Z&A Group. The registration fee per head of cattle is estimated to be around US$2. There is also a premium rate of about 1pc of value of the livestock.
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  Weststar Aviation Service hasn’t received the approval from Ministry of Electricity and Energy to start operations, despite winning the tender to provide helicopter services to offshore oilfields in Myanmar since April 2017

  Weststar Aviation Service, which won a tender for providing helicopter services to offshore oilfields in Myanmar in April last year, is experiencing losses as it has yet to receive approval from the Ministry of Electricity and Energy (MOEE) to start operations, which were meant to have commenced on March 21, said Daw May Thant Zin, Weststar’s local representative,at a press conference in Yangon’s Park Royal Hotel on August 16. Last year, national oil companies Total and Petronas and PTTEP invited bids for the provision of helicopter services. While companies are able to launch tenders, the winners are still required to apply for approval to operate from the relevant ministries. In September 2017, Myanma Oil and Gas Enterprise (MOGE), the national oil and gas company of Myanmar, also recognised Weststar as the winner of the tender. Malaysia-based Weststar won the tender after completing the process as it was able to offer helicopter services at an affordable price of US$22,900 per month, the company said.
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  U Set Aung, Deputy Minister for Planning and Finance was appointed as the new Chairman of the Kyaukphyu Special Economic Zone (SEZ) Management Committee

  Deputy Planning and Finance Minister U Set Aung has been appointed chairman of the Kyaukphyu Special Economic Zone (SEZ) Management Committee amid the government’s ongoing efforts to renegotiate its agreement with the project’s Chinese developer to give Myanmar a larger stake. The appointment took effect on May 8 and was approved by Vice President and Chairman of the Central Body of Myanmar Special Economic Zones U Henry Van Thio, according to an announcement in the government gazette on Sunday. It said the management committee’s previous chairman, U Soe Win, was now a joint chairman but did not make clear whether the two chairmen would be working as equals. The announcement could not be found on the websites of the President’s Office or the Ministry of Information, however, where government announcements are usually posted first. But Planning and Finance Minister’s Secretary U Tun Tun Naing confirmed to The Irrawaddy that the announcement in the government gazette was correct.
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  Myanmar and Thailand signed two MOUs during the visit of the Minister of Foreign Affairs, Thailand, to Myanmar for the 9th meeting of the Joint Commission for Bilateral Cooperation between two countries

  Myanmar and Thailand yesterday signed several agreements which further cemented ties between the two countries. These included a bilateral airline agreement, inked at the Myanmar Foreign Minister’s office, as well as a second agreement to improve an existing shrimp breeding zone with the aim of facilitating development in Rakhine State. The agreements were signed after 9th meeting of the Joint Commission for Bilateral Cooperation between the two countries during Thai Foreign Minister Don Pramudwinai’s trip to Nay Pyi Taw. The airline agreement will replace the existing agreement, which was inked in 1969. “We need to amend the old agreement to make it more relevant to the present time,” said U Nay Win, director from Department of Civil Aviation under Ministry of Transport and Communications. In the new agreement, rules governing the aviation sector, including airlines and airline service providers were amended or included.
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  Fourth workshop of Myanmar- Japan Joint Committee was held at Yangon Stock Exchange (YSX) with the aim to develop the bond market

  The fourth workshop of the Myanmar-Japan Joint Committee to develop bond market was held at the Yangon Stock Exchange (YSX) yesterday afternoon, with a focus on developing the bond market. Attending the meeting were Deputy Minister for Planning and Finance U Maung Maung Win, who is also Chair of the Securities and Exchange Commission, commission members, managing director of Yangon Stock Exchange and officials, officials from the Japanese embassy, the JICA expert, counsellors appointed to CBM, DICA and IRD from Japan, officials from the Japanese Ministry of Finance, Japan Exchange Group, the Department of Financial Services, and Daiwa Institute of Research Holdings Ltd. During the workshop, they discussed increasing the number of companies listed on the Yangon Stock Exchange by holding discussions related to investment and selling initial shares to the public once every three months and preparations for the upcoming YSX EXPO 2018 in September this year.
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  Central Bank of Myanmar (CBM) may not be able to effectively control the local currency depreciation due to the lack of control over illegal currency exchange markets, a drop in foreign reserves and huge external debts

  Central Bank of Myanmar (CBM) is unlikely to effectively control the greenback appreciation against local currency due to the lack of control over illegal currency exchange markets, a drop in foreign reserves and huge external debts, banking experts and economists have criticized. Local currency has reached a record low. The value of US dollar is expected to hit up to Ks-1500. There is a flow of about US$ five billion in illegal markets every year. There is a trade deficit of about US$ four billion in 2017-2018 FY and US$ one billion in the mini budget period. The country is likely to solve trade deficits with the use of US dollars from illegal markets. The country’s oversea debts have reached over US$ one billion within one year. And the country has to repay over US$ 10 billion oversea debts in installment and foreign reserves amount to about 3.2 months of exports.