Weekly Business News from Myanmar

Myanmar authorities wary of Chinese loans to complete the Kyaukphyu SEZ despite deciding to start on a smaller scale and to expand based strictly on demand
YANGON — Myanmar will endeavor to take on no loans from China to complete the Kyaukphyu Special Economic Zone (SEZ) but would offer the developer no sovereign guarantees to mitigate risk if it does, said the project’s new chairman, seeking to allay fears of a debt trap. Sean Turnell, an economic adviser to State Counselor Daw Aung San Suu Kyi, has called the expense of the $7.5-billion project “crazy” and “absurd” and warned of a repeat of Sri Lanka’s experience. The government of Sri Lanka borrowed heavily from China to build the $1-billion Hambantota port but was unable to repay the loans. As a result, it gave China a 99-year lease to the facility in exchange for debt relief. Turnell told a seminar in Singapore in May that Myanmar would have to borrow between $2 billion and $3 billion from the Export-Import Bank of China to make its own port project happen. In an interview with Reuters on Monday, the head of the US Overseas Private Investment Corporation, Ray Washburne, also warned that China’s Belt and Road Initiative was creating a debt trap for many poor nations.
Ministry of Commerce suspended the issuance of re-export licenses for sugar and fuel oil appreciation on 17 August 2018
Ministry of Commerce had started suspending the issuance of re-export licenses for sugar and fuel oil after the greenback appreciation on August 17. Yan Naing Tun, Director-General of Trade Department at the Commerce Ministry said: “The ministry has suspended the issuance of new re-export licenses as there is widespread criticism that the unstable currency exchange rate is linked to the re-export of sugar and diesel. But the licensed re-export process will run as usual.” Since August, 2015, Myanmar has introduced the issuance of re-export licenses. The ministry has allowed re-exports of sugar, betel nut, sesame and cotton. An official from Myanmar Fuel Oil Importers and Distributors Association said: “I think the move aims to control the huge outflow of foreign currency. The authorities need to thoroughly scrutinize whether the currency depreciation against US dollar is linked to this matter at all”.
Ministry of Electricity and Energy defends controversial tender process to provide helicopter transport services in Myanmar’s offshore oil fields which was carried out in line with the international procedures
An official from the Ministry of Electricity and Energy has said the tender process for providing helicopter transport services in Myanmar's offshore oil fields was carried out in line with the international procedures. "We have carried out the tender process in accord with the international procedures for choosing a company to provide helicopter transport services in offshore oil blocks. In this process, we also had to seek recognition from the Civil Aviation Department as technological assessment was necessary. Only after technology sector, we have to consider cost effectiveness. We have announced a tender winning company for the three operating oil companies," said Than Kyaw, director (management) of the Ministry of Electricity and Energy. Officials from tender winner Malaysia-based Weststar Co held a press conference at Park Royal Hotel in Yangon on August 16 voicing out that despite the company winning a tender to provide helicopter transport services in offshore oil blocks of the Ministry of Electricity and Energy, France-based Heli Union Company is still continuing their services instead of handing the reins over.
Myawaddy border trade has declined to USD $ 4.861 million when compared to the same period of last fiscal year due to the fierce heavy rains
As the heavy rain pours rampant in the region, Jaing (Kawkareik) Pontoon bridge in Myawaddy was flooded and completely inaccessible for 20 days. As a result, trade amount compare with previous year amount has declined to US $ 4.861 million according to the data released by Ministry of Commerce. The Myawaddy border trade camp is the second largest camp among other border trade camps. On average, the trade camp is deals in more than US $ 1 million per day. After July 20, trucks had to wait for the water to recede which caused cessation cargo transports from arriving to their destination. According to the data collected by Ministry of Commerce, the volume of import/export till July 13 has surplus US $ 24.168 million compare with last year. After constructing temporary pontoon bridge in Jaing (Kawkareik) , vehicles are now able to resume their normal operations starting from August 9. As a result, there is regular flow of commodities.
Myanmar government invites closed tender applications for various projects in Kayinchaung Economic Zone in Rakhine State
The Government is inviting closed tender applications for various projects in the Kanyinchaung Economic Zone in Rakhine State, western Myanmar. The projects in Lot One (1) include two security guard buildings, one 4-stall restroom. Lot Two (2) includes a 1.1 mile long pre-stressed concrete panel and post fence, and 190 concrete lamp posts with the length of 9 meters. Interested bidders can submit applications to Kanyinchaung Economic Development Company formed by Family Aye Chan Company and Golden Key Company by August 25, or call 09-262977160 and 09795834325 for additional information. A memorandum of understanding (MoU) was signed with Rakhine State Government in May for development of the zone.
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.
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.
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.
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.
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.