Weekly Business News from Myanmar

Kachin State approved Chinese backed business park project in the border town of Kanpiketi
YANGON—The Kachin State parliament approved a proposal on Thursday to implement a Chinese-backed business park project in the border town of Kanpiketi, a part of Beijing’s grand infrastructure plans for its Belt and Road Initiative (BRI). Proposed in 2018, the Kanpiketi Business Park will cover nearly 70 acres in the border town in northern Kachin State’s Special Region 1. The area is controlled by the New Democratic Army-Kachin (NDAK) militia, which is allied with the Myanmar military. At an estimated cost of US$22.4 million, the project will be developed by Myanmar Heng Ya Investment Development Company Ltd, a joint venture of Myanmar’s Kampaiti Development Company Ltd and China’s Yunnan Tengying Trading Company Ltd. According to the Directorate of Investment and Company Administration (DICA), the sons of NDAK militia founder Zahkung Ting Ying are directors at Kampaiti Development. In 2009, the NDAK was converted into a Border Guard Force (BGF), a government-sponsored militia, and still has significant influence in Special Region 1.
The policies, standards needed for Myanmar steel production as demand rises from foreign investors
Myanmar’s steel consumption is expected to grow in the next five years as government spending on infrastructure ramps up and foreign direct investments rise. At current levels, Myanmar uses just about 3 million tonnes of steel, but this is expected rise by more than 60 percent to exceed 5 million tonnes by 2025, according to U Sit Taing Aung, chair of the Myanmar Steel Association. In comparison, Singapore currently consumes nearly 5million tonnes of steel, while Thailand users about 11 million tonnes. Consequently, the authorities are raising efforts to produce more steel domestically to reduce costs. This is because Myanmar imports 90pc of its steel requirements. During a recent interview with The Myanmar Times U Sit Taing Aung shed light on the country’s progress towards developing a domestic steel production industry:
The feasibility studies conducted in four areas to set up metal industries zone
Feasibility studies are being undertaken in four regions and states as part of efforts to implement an iron and steel industrial zone, said U Sit Taing Aung, chairman of the Myanmar Steel Association (MSA). Studies for the implementation of the iron and steel industrial zone project are under way in Ayeyawady and Taninthayi regions and Rakhine and Mon states. The project is slated to commence three to five year after the studies are completed, he said. At present, Myanmar’s steel demand is estimated at about 2.5 million tons, 92 per cent of which is imported. The demand is likely to grow to 5.4 million tons per year by 2030, according to the MSA. Myanmar imported steel worth US$1.7 billion from foreign countries in the previous FY, MSA data showed. “If Myanmar can fulfill the requirements of local steel consumption and focus on import substitution, the steel industry will strategically contribute to national interest. Steel consumption is included in calculations of economic growth,” said U Sit Taing Aung.
Myanmar’s external trade increased USD $ 2.27 billion between 1 October and 21 February in the 2019 – 2020 financial year when compared to the same period of last financial year
Myanmar’s external trade between 1 October and 21 February in the 2019-2020 financial year was registered at US$15.3 billion, an increase of $2.27 billion compared with the corresponding period of the 2018-2019FY, according to the Ministry of Commerce. During the same period in the previous FY, trade stood at $13.05 billion, according to data released by the ministry. Myanmar’s foreign trade has shown a 10-per-cent increase, year over year, under the incumbent government, said an official from the ministry. In the current fiscal, both maritime and border trade recorded an increase compared with the year-ago period, with exports estimated at over $7 billion and imports valued at $8 billion. Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods, while it imports capital goods, raw industrial materials, and consumer goods.
Military MP called for privatization of unprofitable garment factories in Sagaing Region
A military MP has called for privatization of garment factories in Sagaing Region that have been making losses of over Ks30 billion under successive governments. According to the report for 2017-2018 financial year, No. 3 Garment Factory (Sagaing), No.3 Garment Factory Branch (Sagaing), No.6 Garment Factory (Salingyi) and No.6 Garment Factory Branch (Monywa) under the No.3 Heavy Industries are making losses yearly. “The losses those factories have made are worth Ks36,801.46 million. This is a tremendous loss. I here raised my question as to how the region government will do— hand over those factories to the private sector or privatize them,” said Military MP Major Soe Win Myint. In the 2016-2017 FY, No.3 Garment Factory (Sagaing) spent Ks2,497.67 million and earned Ks480.88 million, making a loss of Ks2,016.786 million.
Mother Finance Co., Ltd and NearMe Digital Services collaborate to expand fintech reach in Myanmar
Mother Finance Co Ltd and NearMe Digital Services on February 28 signed a collaboration agreement to provide credit to NearMe's agent and partner network. Mother Finance, a licensed non-bank financial institution which provides small loans to customers via a mobile app, will be providing unsecured SME loans to NearMe. NearMe currently has over 50,000 partner stores nationwide. The maximum amount that can be borrowed is K500 lakh, said Daw Theta Aye, CEO of Mother Finance. U Linn Htike Aung, managing director of NearMe, said "SMEs contribute a lot to the economy and this is an excellent way to help them grow quickly by making use of the latest digital technology." NearMe is a mobile application which enables users to make a variety of payments and purchases such as taxes and public utilities as well as flight tickets, bus tickets and over 70 other products.
The Beneficial Ownership Disclosure Press Conference held in Yangon to raise awareness the transparency of the mining process and to implement the international standard economic industry in Myanmar
The Beneficial Ownership Disclosure Press Conference held in Yangon to raise awareness the transparency of the mining process and to implement the international standard economic industry in Myanmar
Myanmar logistics firm, Ever Flow River Group Public Co (EFR) receive approval to list on Yangon Stock Exchange (YSX) in March
Ever Flow River Group Public Co (EFR) has received approval to list on the Yangon Stock Exchange (YSX) on March 20, according to an announcement by the local bourse on February 28. The listing, which will result in the sixth company on the YSX, is in accordance with Section 41(c) of the Securities Exchange Law and Section 7 and 8 of the Securities Listing Business Regulations. The share price will be announced on March 19. EFR provides logistics services including shipping, air freight, warehousing, containerisation and distribution. It was founded in 1998 by chair U Kyaw Lwin Oo. The company plans to invest in and develop the country’s logistics infrastructure under the National Logistics Master Plan and recently restructured to sharpen its focus on logistics.
Siam Commercial Bank is waiting for on new Myanmar licence to upgrade the existing representative office to a branch
Siam Commercial Bank plans to open its first branch in Myanmar this year if the Central Bank of Myanmar (CBM) grants a bank subsidiary licence, says a SCB senior official. If approved, SCB will upgrade the existing representative office to a branch, said first executive vice-president Kamalkant Agarwal. The bank needs time to develop infrastructure in Myanmar before deciding on a new branch opening, he said, though the country has high growth potential. According to CBM regulations, those holding foreign bank subsidiary licences are allowed to operate wholesale and retail banking business and have up to 10 branches or off-site ATMs. They are required to have minimum paid-in capital of US$100 million. To become eligible to upgrade their business, foreign bank subsidiaries must operate in Myanmar for at least three years.
Thailand approved a preferential loan worth 777 million THB under 30 year contract for infrastructure development in Myawaddy city in Myanmar
The Thai Cabinet has approved a preferential loan worth 777 million THB (over 25.76 million USD) under a 30-year contract for Myanmar for infrastructure development in Myawaddy city, vietnamplus reported. Government deputy spokeswoman Ratchada Thanadirek said the Cabinet meeting on December 24 endorsed a proposal for the Neighbouring Countries Economic Development Cooperation Agency (NEDA) to provide financial assistance for Myanmar to fund the third phase of the Greater Mekong Sub-region development project for Myawaddy.