Weekly Business News from Myanmar

TPG announced sale of its stake in Myanmar Distillery Company Group to Thai Beverage Public Co Ltd
TPG, a global alternative asset firm, announced it has sold its stake in Myanmar Distillery Company Group (“MDC”) to Thai Beverage Public Company Limited (“Thai Beverage”). Myanmar’s leading whisky producer was acquired by one of Asia’s largest spirits groups, according to a press release on October 12. MDC is the largest spirits company in Myanmar and is the producer of Grand Royal, the nation’s leading whisky brand. The Grand Royal brand employs more than 2,500 staff and supports local businesses through its network reaching 1,300 wholesalers and over 20,000 retailers. Founded in 1995, MDC produces and sells a broad range of spirits including whisky and gin. It operates two distilling, blending, and bottling facilities in Yangon and Mandalay.
Illegal trade, a weaker currency and fluctuation in commodity prices have led to Myanmar’s trade deficit
Myanmar’s trade deficit has widened on the back of fluctuations in commodity prices, illegal trade and a weaker currency. In 2016-17, the trade deficit amounted to over US$5.5 billion, up from US$5.4 billion in 2015-16 and US$4.9 billion in 2014-15, according to the statistics released by the Central Statistical Organisation. Among the country’s imports is diesel. Between September 17 and September 23, Myanmar imported over 64,000 tonnes of diesel worth US$32 million by sea, representing an increase of over 278,800 tonnes compared to the week before, according to government media reports. About a third of the diesel entered the country through Myeik, near the Myanmar-Thailand land border trade camp.
Central Bank of Myanmar (CBM) allows local banks to provide loans without the need for collateral (U Set Aung, Deputy Minister for Planning and Finance)
Local banks are now permitted to extend loans without the need for collaterals, U Set Aung, Deputy Minister at the Ministry of Planning and Finance, told The Myanmar Times at the 5th Asia SME Conference in Naypyitaw on October 14. “The Central Bank of Myanmar (CBM) has allowed local banks to provide loans without movable and resalable assets as collaterals provided the banks set the suitable risk management policies in place. The loan process will become complete when the banks can implement proper risk management,” U Set Aung said. The development should serve as a welcome reprieve for many cash-strapped SMEs. In Myanmar, access to funds is the main barrier in the way of growth and development of small and medium enterprises (SMEs). This is because loans issued to businesses are approved based on collateral –typically property or land - and are mostly over periods of just one year. As such, relaxing the loan collateral system is necessary to help more SMEs qualify for loans.
In separate acquisitions totaling US$ 741 million, Thai Beverage PLC acquires 75 percent share in Myanmar Distillery Co
Singapore-listed Thai Beverage PLC has acquired a 75 percent share in Myanmar Distillery Co in separate acquisitions totalling US$741 million, media reports said. The acquisitions include a $500 million deal with Texas-based TPG Capital, which said in a statement on October 13 it was selling its 50 percent stake in Myanmar Distillery to ThaiBev, owned by Thai billionaire Mr Charoen Sirivadhanabhakdi, the reports said. Reuters quoted a source with direct knowledge of the sale as saying TPG Capital had acquired its stake in Myanmar Distillery, maker of top-selling Grand Royal Whisky and other brands, for $150 million in December 2015. ThaiBev said in a filing with the Singapore stock exchange it had also acquired an additional stake in Myanmar Distillery from other parties, giving it a 75 percent share in the company.
In order to provide limousine services in Yangon, Myanmar’s commercial capital by early 2018, Singapore-based Strides Transportation signed a joint-venture agreement with Toyota Tsusho Asia Pacific and a local company, Alliance Urban Transport, on October
Singapore-based Strides Transportation signed a joint venture agreement on October 12 in Yangon to provide limousine services in Myanmar’s commercial capital in early 2018. Under the partnership, SMRT Strides Toyotsu Alliance will take 60 percent of stakes in the joint venture, Toyota Tsusho Asia Pacific ( a member of the Toyota Group of Companies) and Alliance Urban Transport (AUT) will split the rest equally, at 20pc each. AUT is a local company and partly owned by Elite Telecom Public Company Limited and JFQ Capital, to which SMRT Taxis is the consultant for their vocational school in Yangon. Strides is a subsidiary of SMRT Corp. “As Myanmar is developing its economy, the country has been accepting economic travellers. So we thought that to give limousine service is becoming needed. We want to fulfil and Myanmar needs a good and reliable limousine rental service,” said Tony Heng, SMRT managing director.
Internal Revenue Department (IRD) received K2.2 trillion of total tax revenues between April 1 and September 30, which is K500 billion more than what it collected during the same period last year
The Internal Revenue Department (IRD) received total tax revenues of some K2.2 trillion between April 1 and September 30 of the current fiscal year. That is K500 billion more than what it collected during the same period last year. During the current government's term, the number of taxpayers and tax revenue has increased, but the amount obtained reveals there is still some shortcoming in paying taxes according to taxable incomes, U Min Htut, director general of the IRD, told The Myanmar Times. "If we look at the current situation, while more taxpayers are following instructions better than before, many others are still not complying by paying taxes according to their income. So, in order to increase the number of taxpayers, we are reviewing the taxable income brackets to make sure everyone plays their part,” U Min Htut said.
In a joint venture with Cisco System, an American multinational technology conglomerate, CB bank will deliver secure services with high availability via cyber banking
banking The Co-operative Bank (CB Bank) and Cisco System, an American multination¬al technology conglomer¬ate, has made a technical collaboration agreement to transform the bank’s data center and core net¬work infrastructure to enable core banking ap¬plications, digital banking and international services to be delivered to its cus¬tomers and partners in a secure manner, accord¬ing to a joint statement from CB Bank and Cisco System. The signing cer¬emony was held at Melia Hotel, in Yangon’s com¬mercial hub, on Septem¬ber 26. Myanmar’s financial service industry is going through a period of rapid transformation as the cus¬tomer base expands and connectively improves at a breakneck pace. At the same time, there are in¬creasing threats to the fi¬nancial institutions’ tech¬nological infrastructure. It is for this reason that tech¬nology is crucial to build¬ing solid infrastructure to deliver secure services with high availability, the joint statement said.
More investments are needed to develop Yangon into a regional economic and trading hub (U Phyo Min Thein, Yangon Region Chief Minister)
Plans are underway for Yangon, Myanmar’s largest city, to be developed into a regional economic and trading hub, Yangon Region Chief Minister U Phyo Min Thein told representatives from the Oxford Business Group (OBG) on October 9. There are opportunities for Yangon to become a gateway hub for its landlocked neighbours by enabling them to gain access to international markets through the Port of Yangon, for example. The city can also leverage on its status as the country’s commercial and trading hub to draw business activity and growth. To achieve this, the city will need to invest in improving its current transportation infrastructure, U Phyo Min Thein told OBG. The research firm met with the chief minister as part of its work on a fifth in-depth report on the Myanmar economy.
A port electronic data interchange system and new import fees will be introduced at Myanmar's ports this month
Eighteen container shipping lines with 51 vessels are providing container-handling services at the container ports in Yangon. Yangon has six container ports – AWPT, HPT, MIP, MITT, BSW and AIPT – with berths for 69 vessels. A total of 51 vessels are currently operating. “Eighteen container shipping lines are currently allowed and there are 51 vessels running, but 19 have stopped,” said an official of Myanmar Port Authority.
Due to sluggish investment demand, World Bank cut Myanmar’s growth forecast by 0.6 percent for 2017-18 to 6.4 percent
The World Bank has cut its growth forecasts for Myanmar, citing that investment demand slowed down as businesses wait for greater clarity of Nay Pyi Taw’s economic agenda. In its latest report released October 4, it cut Myanmar’s growth forecasts by 0.6 percentage points for 2017-18 to 6.4 percent. Growth over the medium-term is also reduced to an average of 6.9pc per year. Earlier this year in April, the bank stated that economic growth is projected to average 7.1pc per year over the next three years. “Myanmar’s macroeconomic environment remains stable, though economic growth is slowing to 5.9pc in 2016-17 compared to 7pc in 2015-16, weighed down by slower investment demand,” the Washington-based lender noted.