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PwC MyanmarWeekly Business Intelligence

Issue 18212 October 2019

www.pwc.com/mm

PwC | October 2019

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PwC | October 2019

1. Weekly Key Financial & Business News

3

PwC | October 2019

Weekly Key Financial & Business NewsHeadlines

CB Insurance and Telenor Myanmar Partner for Life Insurance Services

Myanmar, Thailand accelerate plans to link, electrify Dawei SEZ

FMI City Management Back Under the Ministry of Construction Oversight

Car makers up local production despite challenges

4

Myanmar and World Bank’s Ease of Doing Business Index

PwC | October 2019

Weekly Key Financial & Business NewsHeadlines

Inclusive Business Challenge launched to recognise enterprises with social impact

Yangon Region government to sell land in three phases

Spending on electricity tops budget for the first time

Yangon’s ‘new city’ to begin land compensation process

5

Separate plots planned to establish specialized textile and garment zones in Yangon, Mandalay

PwC | October 2019 6

Myanmar, Thailand accelerate plans to link, electrify Dawei SEZ

Myanmar and Thailand will speed updevelopment of a Special Economic Zone (SEZ)and deep sea port at Dawei in Tanintharyi Region,officials said during the 9th Myanmar – ThailandJoint Coordinating Committee meeting last week.Basic infrastructure such as roads connecting theSEZ to Thailand and necessities like electricitywill be prioritised and carried out simultaneouslywith as little delay in between as possible, said UTun Naing, Deputy Minister for Ministry ofElectricity and Energy and chair of the DaweiSpecial Economic Zone Management Committee.Myanmar will accept a loan from Thailand atreduced interest rates to build the two-laneDawei-Htee Khee road, which is expected to linkthe SEZ to Thailand and boost trade and tourismbetween the two countries. Construction on the138-kilometre road, which is being carried out byItalian-Thai Development Company Ltd (ITD),began in 2018, after the Ministry of NaturalResources and Environmental Conservationapproved the environmental and social impactassessment.In July this year, the World Wildlife Fund warned

that Myanmar’s rainforests and at least nineglobally-threatened species in Tanintharyi wouldface significant risks if the Dawei-Htee Khee roadproject continues without a comprehensivebiodiversity protection plan.Myanmar will also receive loans from the AsiaDevelopment Bank to set up the necessaryinfrastructure enabling access to the nationalgrid. “Dawei SEZ will be able to enjoy electricityafter we have extended the grid from Mawlamyineto Ye and Dawei,” U Tun Naing said. Tanintharyiis the only region in Myanmar which doesn’t haveaccess to electricity.Development of the Dawei deep sea port projectwill continue according to a contract between ITDand the Myanmar government. “There are twophases for Dawei SEZ. Projects within the first 27sq km are included in the initial phase and will becarried out according to the original contract,” UTun Naing said.Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-thailand-accelerate-plans-link-electrify-dawei-sez.html

NewspapersMyanmar Times

07 Oct 2019


CB Insurance and Telenor Myanmar Partner for Life Insurance Services

With the aim of expanding its insurance service tomiddle class and low income families, CBInsurance and Telenor Myanmar have partneredto provide life insurance under the name“SateChaLife,” which can roughly be translated as“no worry for life.”The two local giants launched the service onSeptember 27, and will allow Telenor customersto purchase life insurance for 30 days, 90 days, or365 days.“The high penetration of mobile devices isimportant and a game-changer to enable greaterinsurance access. With Telenor’s reach, we aremaking it easy, simple, and affordable forMyanmar people to get insurance for themselvesand their loved ones,” said U Thaung Han, CEO ofCB Insurance.Telenor users will need to provide their name,NRC card number, birthday, address, and thebenefactor’s name. They can then choose fromvarious terms on an insurance policy with aminimum terms of 30 days.Customers who buy a micro-life insurance plancan expect the payout to the beneficiary when in

the event of the death of the insured, a life-longdisability, or cases of serious injuries.Sharad Mehrotra, Chief Executive Officer ofTelenor Myanmar, said that his partnership willenable Telenor users to buy the insurance policyvery easily.CB Insurance entered the Myanmar’s insurancemarket in 2012, and Telenor received a telecomlicense in 2014. Telenor Myanmar has invested$2.7 million in Myanmar, has over 19 millionsubscribers in the country.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/cb-insurance-and-telenor-myanmar-partner-life-insurance-services

NewspapersMyanmar Business Today

08 Oct 2019


FMI City Management Back Under the Ministry of Construction Oversight

FMI City is located nine miles from Yangon’sdowntown area, and six miles away from YangonInternational Airport. Construction on the projectstarted in 1996 by FMI Gar-den Development Ltd.and they have managed it for the last 20 years.On Monday, September 30, 2019, the city’smanagement was handed back to the De-partment of Urban and Housing Developmentunder the Ministry of Construction.FMI City was the very first housing project inMyanmar. The nearly 2,000 properties in-cludedprojects such as Finger Lakes, Orchid Gardens,Cherry Avenue, and Lake View Villas in totalhousing 8,000 residents. It also has a sports andrecreation center, supermarket, wet market,banks, food stalls, and a park.“FMI Garden Development’s management teamhas taken care of post development estatemanagement duties for 20 years and the time hascome to hand back manage-ment of the estate tothe Department of Urban and Development,” saidU Tun Tun, Chief Operating Officer at FirstMyanmar Investment Public Co., Ltd.The company gained a lot of experience from the

project, and has committed to devel-oping evenbetter projects in the future.FMI Garden Development’s parent company isFirst Myanmar Investment Public Co., Ltd (FMI).They providing services in finance, real estate andhealth care sectors. It be-came the very first listedcompany on the Yangon Stock Exchange (YSX) onMarch 25, 2016, and has over 8,000shareholders.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/fmi-city-management-back-under-ministry-construction-oversight

NewspapersMyanmar Business Today

08 Oct 2019


Car makers up local production despite challenges

Car makers in Myanmar have been increasingproduction of locally assembled automobiles inresponse to higher demand.Suzuki Myanmar Motor Co Ltd this year produced15,000 vehicles compared to 12,000 in 2018,representing a 25 percent increase in year-on-year production, the company said.“We are more producing more brand new motorsbased on our factory capacity in Thilawa this yearand now command 60 percent of the market fornew cars in Myanmar,” said Keiichi Asano,Managing Director of the Suzuki Myanmar.Suzuki Myanmar opened its factory in Yangon’sSouth Dagon township in May 2013, where itbegan by assembling Suzuki Carry trucks. Overthe years, it also began producing the SuzukiErtiga and Suzuki Ciaz and moved its factory toThilawa Special Economic Zone to accommodatehigher production volumes.Priced at around K27 million, the Ertiga is nowthe best-selling car for Suzuki in Myanmar. Itsother models, which include the Ciaz, GLX andGL are priced between K20 million and K27million before registration fees and taxes.

But Fitch Solutions warned in a report datedOctober 4 that the sector’s potential for growthmay be hampered by Myanmar’s underdevelopedbanking system. Poor consumer access to credit,it said would be an “ongoing barrier to greatervehicle ownership.”The research firm added that Myanmar’s limitedroad network coverage will deter potentialconsumers from purchasing more vehicles.“We forecast Myanmar’s vehicle ownership rate toreach jus t 26.5 vehicles per 1000 of thepopulation by the end 2019, much lower thanThailand, which will surpass 290 vehicles per1000 of its population over the same period,” itsaid.Nevertheless, Mr Asano said that the firm expectsto increase production in the future as marketdemand and competition from other car makersincreases.

Source: Myanmar Timeshttps://www.mmtimes.com/news/car-makers-local-production-despite-challenges.html


08 Oct 2019


Myanmar and World Bank’s Ease of Doing Business Index

World Bank consultant Mr Jose Ricardo Silva saidon Friday 27 September 2019 that Myanmar wasamong the top 20 improvers list in the WorldBank’s Ease of Doing Business Index 2020.In a time when Myanmar was facing criticismslocally as well as internationally, it was a delightto hear this good news. It was to be expected thatthere still will be local criticism to this news too.World’s Bank Ease of Doing Business Index wasnot widely known in Myanmar. There were manyfactors that complicated the business market inMyanmar. The list would be long and almostnever ending with corruption, red tapes,authorized persons taking advantage of grantedrights and power, not following thecontract/agreement, not following rules andregulations, illegal trade, unauthorized collectionof various fees etc.The first thing to do in straightening andstrengthening the market economy was to re-establish the private sector that was thefoundation of a market economy. However, themajority of the private sector businesses were notin the mainstream or formal sector but rather in

the informal market sector. Most privatebusinesses in Myanmar exist as small andmedium enterprises (SMEs) that were weak inhaving proper accounts. Most don’t have a properbusiness plan and have no way of raising capitalor investment. When companies were permittedto be formed,capitals or investment from thepeople, the unregistered businesses and SMEs,were untaxed and thus could not be put up ascapital or investment in a legal sense. Remittanceof Myanmar nationals working oversea amountedto US$ 2 to 4 billion but most were transferredback to Myanmar through the informal “Hundi”money transfer system rather than through theformal and legal banking system.Raising the Ease of Doing Business Index rankingTo improve the situation the government haddrawn up and was implementing MyanmarSustainable Development Plan.

Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/myanmar-and-world-banks-ease-of-doing-business-index/

NewspapersThe Global New Light of Myanmar

09 Oct 2019


Yangon Region government to sell land in three phases

Plots of land owned by the Yangon Regiongovernment will be sold in three phases for thepurpose of setting up industrial businesses andpublic housing, said U Than, the Joint Secretaryof the Yangon City Development Committee(YCDC). “The land management committee willsell over 500 plots of land in Hlinethaya,Shwepyitha, and four Dagon townships in Phase1; over 180 plots from Myaungtagar IndustrialZone will be sold in Phase 2; and, over 9,000acres, which were previously marked asagricultural zone, in East Dagon and DagonSeikkan townships will be put on sale in Phase 3,”said U Than. “Over 500 land plots, which will besold in Phase 1, are not newly developed ordesignated by the regional government. Instead,they are plots that remained undeveloped whennew townships were created in Hlinethaya,Shwepyitha, and four Dagon townships. Urbanand housing projects have still not beenimplemented on the plots.Therefore, the regional government has beenauthorized to manage those land plots, and itplans to sell them,” said U Than.

“Land-use applications for 500 land plots weresold on 7 October at the office complex of theGeneral Administration Department (EasternDistrict), and the applications have to besubmitted on 8 November,” he added.The Land Management Committee will screen theapplications and sell the plots to selectedindividuals and organizations for setting upbusinesses and housing projects.“Some are competitive in applying for a particularland plot. We will systematically screen theirapplications. Some applications have beenattached with the capital statements and projectplans. The committee will screen the proposals,select the individuals and organizations, andforward their names to the regional government.The land plots will be sold only with the approvalof the regional government,” said U Than.The lands on sale have the grant deed, saidYangon Mayor U Maung Maung Soe.Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/yangon-region-government-to-sell-land-in-three-phases/

NewspapersThe Global New Light of Myanmar

09 Oct 2019


Inclusive Business Challenge launched to recognise enterprises with social impact

The UK-aided DaNa Facility and Myanmar YoungEntrepreneurs Association (MYEA) launched theInclusive Business Challenge last week to raisethe awareness of “inclusive business” in Yangon.The challenge aims to recognise companies thatdevelop scalable and innovative business modelsthat are able to bring about social impact. It isalso endorsed by the Steering Group for InclusiveBusiness/Impact Investing, a public-privateinitiative set up in April this year to promoterelated business practices.“MYEA has long been supporting the introductionof inclusive businesses and social impact inMyanmar. Our Impact Investment Committeestands ready to continue this support and spreadthe inclusive business message around thecountry,” said U Aung Thura, president of theMYEA.For Myanmar, inclusive business is a novel yethighly-relevant concept as it implies involvingpeople across the social spectrum in business inan innovative and financially-viable way.Importantly, it has the potential to addresspoverty and enhance collective economic growth

in a society by engaging local-income population.It could also help corporations and stakeholdersto better develop affordable goods and servicesfor the same population.“Inclusive businesses create triple wins: for thepoor, for companies and for government. Theyalso contribute to the government’s agenda ofreducing poverty, building a more inclusiveeconomy and achieving the SustainableDevelopment Goals,” said U Aung Naing Oo,Permanent Secretary of the Ministry ofInvestment and Foreign Economic Relations in astatement.The challenge is open now to all privatecompanies in Myanmar with the inclusivebusiness aspiration till October 25.The result of the challenge will be announced atthe MYEA Annual Entrepreneurship Summit onNovember 16.

Source: Myanmar Timeshttps://www.mmtimes.com/news/inclusive-business-challenge-launched-recognise-enterprises-social-impact.html


10 Oct 2019


Spending on electricity tops budget for the first time

The energy and electricity sector has beenallocated with the highest volume of funds in theBudget for fiscal 2019-20, which commencedOctober 1. It is the first time the energy sector willtop government spending.The government is expected to spend a total ofK35.2 trillion between October 1, 2019 andSeptember 30, 2020, registering a wider deficit ofK6.7 trillion, or 5.7 percent of GDP, for theperiod.“The budget deficit is expected to widen asgovernment spending will increase this year,” saidDaw Thida Tun, director general at the BudgetDepartment under the Ministry of Planning andFinance (MOPF).“A higher proportion of the Budget has beenallocated to the energy and electricity sector forthe benefit of the public” she added.Parliament approved funds of over K8 trillion forthe Ministry of Electricity and Energy (MOEE) infiscal 2019-20, which is up by more than 28pccompared to the K6.2 trillion received by theministry in the previous fiscal year.The higher budget will cover a short-term

emergency plan for 2020, for which a tender hasbeen called with the aim of generating 1,040megawatts of additional energy from five liquefiednatural gas projects.Electricity distribution sites have been specifiedin areas which are nearest to the main grids,including Kyauk Phyu, Kyun Chaung, Alone,Thalyin, and Thaketa. The budget will also coverinvestments in longer term projects likehydropower construction projects which areimplemented yearly, while the national grid willbe expanded as well.“The budget for completing such constructionprojects is a bit higher this year. It means theprojects are now in the prioritised category due tothe country’s needs. This means more medium-sized projects will be completed in 2020,” said asenior officer at the MOEE.

Source: Myanmar Timeshttps://www.mmtimes.com/news/spending-electricity-tops-budget-first-time.html


10 Oct 2019


Yangon’s ‘new city’ to begin land compensation process

The Yangon regional government has startedproviding substitute land to original landownersas compensation for land acquired for the NewYangon City Project on October 8.According to the previous agreement, landownerswill retain 80 percent of the original land locatedwithin the project area with the remaining 20pcbeing compensated in Kyeemyindaing township.Phase 1 of that project covered 18,390 acres offarmlands and the government returned 1514acres of developed land to 187 farmers withinKyeemyindaing township.“Resettlement procedure took many months as itneeds step by step cooperation of variousdepartments,” said New Yangon DevelopmentCompany’s CEO Serge Pun.The lot drawing for the compensation land inKyeemyindaing township began in earlySeptember. Temporary land transfer orders andland permits have been issued on October 8.“After the construction of infrastructure atresettlement place, landlords can start using theircity lands with necessary permits from respectivedevelopment committee in accordance with rules

and regulations,” he added.Resettlement, the main procedure of New YangonCity’s first phase will be finished in the comingfew months, Mr Pun said. Situated at the westbank of Yangon River, the New Yangon CityProject expects to cost over US$1.5 billion in thefirst phase of infrastructure development.All land acquisition orders were made inaccordance to the procedures stipulated by thegovernment, said Yangon Chief Minister U PhyoMin Thein at the ceremony on Tuesday.Launched by the regional government in March2018, the Yangon new city project covers an areatwice the size of Singapore.New Yangon City Development Company(NYDC), the developer signed an agreement withChinese state-owned enterprise ChinaCommunications Construction Company toprepare detailed Pre-Project Documentsinfrastructure and a 10-square-kilometreindustrial estateSource: Myanmar Timeshttps://www.mmtimes.com/news/yangons-new-city-begin-land-compensation-process.html


11 Oct 2019


Separate plots planned to establish specialized textile and garment zones in Yangon, Mandalay

Separate land areas are being planned to establishspecial zones related to textile and garment inYangon and Mandalay regions, according to theministry of industry.The ministry is cooperating with the privatesector to implement pilot projects for industrycomplexes and clusters, a high-ranking officialfrom the ministry.Union Minister for Industry Khin Maung Cho saidplans were underway to adopt a national leveltextile policy with the help of Germany's GIZ withthe aim of developing Myanmar's textile industry,boosting investment by inviting foreign tradepartners, getting necessary infrastructure,boosting export market and reducing import.He said national textile policy is part of NationalExport Strategy-NES. The minister made suchremarks during the activities of his ministry in thethird year of the government term.The commerce ministry is taking charge ofimplementing the NES with 11 sectors. Amongthose sectors, textile and clothing sector is beingimplemented by the No (3) Heavy Industriesunder the ministry of industry by forming a

committee.Therefore, plans are underway to establishspecialized textile and garment zones.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/separate-plots-planned-to-establish-specialized-textile-and-garment-zones-in-yangon-mandalay

NewspapersEleven Myanmar

12 Oct 2019

PwC | October 2019

2. Weekly Key Policy News

16

PwC | October 2019

“We have made good progress”: minister points to improvements for business

Weekly Key Policy NewsHeadlines

Renewed conflict in Myanmar slows China’s belt and road projects

New bridge boosts Thai-Myanmar ties

Govt goes high-tech in anti-corruption fight

17

Centralised govt stifles economic growth, says senior NLD official


Renewed conflict in Myanmar slows China’s belt and road projects

A recent decision by the Myanmar military, orTatmadaw, not to extend a cease-fire aimed atethnic armed organizations excluded from anationwide peace agreement puts the country’sBelt and Road projects in further limbo.Multiple projects have already been halted,including the key Myitsone dam hydropowerproject in in Myanmar’s northernmost state ofKachin. But ethnic strife is not to blame. Rather,the dam has run up against nationwide oppositionand an International Finance Corp. reportstrongly advising against damming the upperreaches of Myanmar’s major rivers.Meanwhile, work on a feasibility study for anotherproject has been suspended as a result of therenewed hostilities. Tatmadaw forces in lateSeptember assaulted a Myanmar NationalDemocratic Alliance Army base in Kutkai,squarely in the middle of the proposed route forthe China-led Muse-Lashio-Mandalay rail projectin northern Shan state.One day after fighting recommenced, a MyanmaRailways spokesman announced the suspension,blaming the instability.

The attacks signal the failure of Chinese attemptsto broker peace between Myanmar’s vigorouslyindependent military and a group of armedorganizations known as The Northern Alliance.Fighting has also broken out anew in Rakhinestate, where the Arakan Army, part of theNorthern Alliance, is engaged outside Sittwe, thestate capital. The conflict erects yet anotherobstacle to bringing home Rohingya refugeesfrom neighboring Bangladesh.He Baogang, Alfred Deakin professor and chair ininternational relations at Australia’s DeakinUniversity, suggests Beijing might haveoverestimated its capacity as a mediator in bothconflicts.“They thought they could solve the EAO issuebehind closed doors in Kengtung, but they havefailed to do so,” he said, using the acronym forethnic armed organizations.

Source: Consult Myanmarhttps://consult-myanmar.com/2019/10/08/renewed-conflict-in-myanmar-slows-chinas-belt-and-road-projects/

NewspapersConsult Myanmar

08 Oct 2019


New bridge boosts Thai-Myanmar ties

TAK: Bilateral border trade between Thailand andMyanmar is expected to flourish after the secondThai-Myanmar Friendship Bridge becomes fullyoperational, starting from Oct 30.Niyom Wairatpanich, vice-chairman of the ThaiChamber of Commerce, said the bridge is vital toboost border trade between the two countries,increasing trade flow and logistics servicesthrough Mae Sot.Thailand’s border trade with Myanmar totalled193 billion baht last year, up 4.9% from a yearbefore. Border trade through Mae Sot amountedto 80 billion baht in 2018.Thailand’s overall border trade with all fourneighbours rose 4% last year to 1.12 trillion baht,with exports making up 651 billion baht, down0.5%, and imports worth 474 billion, up 11%.Malaysia was the biggest partner for border trade,with two-way border trade amounting to 572billion baht, up 1.3%, followed by Laos (214billion baht, up 3.2%) and Cambodia (146 billionbaht, up 16.4%).For the first eight months, Thailand-Myanmartrade accounted for 18.3% of total border trade

volume, totalling 55.0 billion baht, a 4.27%decrease.Exports made up 47.1 billion baht, down 14.6%,with imports worth 7.88 billion, up 6.63%.The top five export products through the Mae Sotcheckpoint were energy drinks, motorcycles,diesel oil, mobile phones with components, anddried betel nut, while the top five import productswere corn, live cows and buffaloes, old slabs, andtransformers.Mr Niyom said with the new friendship bridge,the border trade value via Mae Sot is expected totop 100 billion baht in 2020.Kich Aungvitulsalit, chairman of the Thai-Myanmar Business Council, said exports fromThailand are likely to increase by more than 30%once the new bridge is open.Mae Sot contributes a major share — up to 60% —of total border trade between Thailand andMyanmar, followed by Mae Sai and Ranong-KawThaung checkpoints.Source: Consult Myanmarhttps://consult-myanmar.com/2019/10/08/new-bridge-boosts-thai-myanmar-ties/


08 Oct 2019


Govt goes high-tech in anti-corruption fight

The government on Wednesday unveiled a high-tech system aimed at fighting corruption atgovernment ministries, a senior official said.The Corruption Prevention Unit (CPU) toolkit willbe tested at 10 important ministries that providepublic services, said Anti-Corruption CommissionChair U Aung Kyi.Under the new system, an official of the minister’soffice or headquarters will use SMS on a mobilephone to ask each citizen who seeks service at anoffice of the department for feedback.Via SMS, the official will ask the citizen questionsabout the quality of service they received andwhether anyone asked for a bribe.“The toolkit can prevent the corruption generallyfound at lower levels of government,” U Aung Kyisaid during the launch of the system in Nay PyiTaw on Wednesday.Ministries where the toolkit would be testedinclude Home Affairs; the Office of the UnionGovernment; Transportation andCommunications; Labour, Immigration andPopulation; Commerce; Education; Health andSports; Planning and Finance; and Hotels and

Tourism.U Aung Kyi said the toolkit would be used in allministries and agencies once they fine-tune itafter the testing.He urged people to support the programme bygiving feedback through the toolkit to help thegovernment stamp out corruption.“This is a tool to help the people. The morepassionate we are about the CPU, the better thepeople will be served,” he said. – Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-goes-high-tech-anti-corruption-fight.html


10 Oct 2019


Centralised govt stifles economic growth, says senior NLD official

Myanmar's centralised system of government hasbeen a major stumbling block in the country’seconomic growth, according to Mandalay ChiefMinister U Zaw Myint Maung, who is a seniorleader of the ruling National League forDemocracy.“We won’t make significant progress as long asthe system is centralised, he told The MyanmarTimes in an interview at his office.He said that investments and major economic andinfrastructure projects have to pass through theUnion government, which is causing unduedelays.“An example is the investment in a solar powerproject,” he said. “It would be much better if thedecision could be made at the regional level.”The former political prisoner and medical doctor,who is the party’s second vice chair, said thegovernment would operate more efficiently if itwas decentralised.As Mandalay becomes a key route in the China-led Belt and Road Initiative, U Zaw Myint Maungis optimistic about the prospects for the country’ssecond largest city, especially since China remains

the top investor in the region.Mandalay Region boasts 77 approved foreigninvestments since the NLD government came topower in 2016, worth a total $3.97 billion. Also inthat time, 174 Myanmar citizens poured in K5.03trillion in investments.The region hopes to post aper capita GDP of K1.7 million this year,compared to K1.2 million in the previous year.On the downside, the region’s economic growth isexpected to ease to between 6 percent and 7pc,down from 7.2pc growth recorded last year, dueto the closure of large mining concessions such asthe Moehti Moemi, which was a major source ofrevenue.Another downside is an inflation rate of 11.53pc,the highest in the country, caused by a risingnumber of migrant workers sending money home,increasing capital outflows, weakening of theexchange rate, and rising inflation.

Source: Myanmar Timeshttps://www.mmtimes.com/news/centralised-govt-stifles-economic-growth-says-senior-nld-official.html


11 Oct 2019


“We have made good progress”: minister points to improvements for business

Deputy commerce minister U Aung Htoo spoke toThe Myanmar Times in Nay Pyi Taw about theNational League for Democracy-ledadministration’s latest efforts to improve thecountry’s business environment.U Aung Htoo is the senior official in charge ofimproving Myanmar’s ease of doing businessranking. In an extensive interview, he explainedthe reform programme undertaken by thegovernment, such as improvements in starting upa business, access to electricity and credit,obtaining construction permits, and dealing withinsolvency.Myanmar was ranked 171st among 190 countriesby the World Bank’s Ease of Doing BusinessRanking 2019. The country aims to be among thetop 100 countries by 2020-21 and among the top40 by 2035-36.“The vice president [U Myint Swe] made acommitment that during this five year term, theranking of Myanmar will be improved from 177[in 2014] to under 100. This is a big job,” he toldthis paper.“Improving the Ease of Doing Business Ranking is

like a race. Other countries are also trying toimprove. If you can run faster, you can be rankedhigher,” he added. To that end, Yangon Cityrecently introduced a new digitalised constructionpermit scheme in an effort to improve theefficiency. The pilot project involves anautomated, paper-free system which aims toreduce the processing time from an average of 95days to 49 for about 90 percent of the 4000construction permits submitted annually.The minister said the new Companies Law willimprove protection of minority investors and ishopeful that the draft Insolvency Law could bepassed this year.The government is currently drafting the SecuredTransaction Law and setting up a credit bureau,he added.

Source: Myanmar Timeshttps://www.mmtimes.com/news/we-have-made-good-progress-minister-points-improvements-business.html


11 Oct 2019

PwC | October 2019

3. Weekly Investment News

23

PwC | October 2019

Weekly Key Investment NewsHeadlines

SGX-listed F&N invests $70m in Myanmar with Emerald Brewery venture

Myanmar Investments: another corporate casualty of Myanmar’s ‘harsh realities’

Singapore well-positioned to contribute expertise to infrastructure in region: Infrastructure Asia chief

24

Deal to Be Signed for BRI-Related Economic Zone in Myanmar's Kachin State

VPower Group wins Myanmar’s emergency power tender


SGX-listed F&N invests $70m in Myanmar with Emerald Brewery venture

Singapore-listed Fraser & Neave (F&N) hasannounced the commercial launch of operationsat Emerald Brewery Myanmar Limited (EmeraldBrewery) a year after it committed to invest $70million in the beer production joint venture.Emerald Brewery, a joint-venture between F&Nand local partners, marks the comeback for thefood and beverage firm to the Myanmar market.F&N exited the country in 2015 after selling itsstake in Myanmar Brewery, run jointly with amilitary-owned company, to Japan’s KirinHoldings. F&N has established a greenfieldbrewery located in Hlegu Township in Yangon, tobrew the Chang Lager brand.Through Emerald Brewery, F&N will work withlocal communities in manufacturing and acrossthe supply chain.F&N board executive committee chairman KohPoh Tiong said, “we are pleased to re-establishF&N’s presence in Myanmar’s beer market andour investment reflects the great potential we seein this fast-growing market. We have workedswiftly to build our new brewery, operations andbusiness; and are confident that our two decades’

experience in Myanmar will propel our newventure forward.”The brewery has an annual beer productioncapacity of 500,000 hectolitres.F&N CEO (beer) Edmond Neo said, “Togetherwith our local partner and ThaiBev, our strategicpartner, the opening of this world-class brewerybrings us a step closer to this shared vision.”

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/fn-myanmar-emerald-brewery-155935/

NewspapersDeal Street Asia

30 Sep 2019


Myanmar Investments: another corporate casualty of Myanmar’s ‘harsh realities’

London-listed Myanmar InvestmentsInternational (MIL), the latest of several foreigninvestors to turn its back on Myanmar, hasblamed its decision to wind up on the impact ofthe conflict in northern Rakhine, a “complex”political situation and what it calls the slow paceof reform.Although MIL was a relatively small player with amarket capitalisation of just £26.32 million(US$32.4 million), its decision to wind up willstrike other investors as a resounding vote of noconfidence in Myanmar’s future after riding awave of optimism at its launch in 2013.Since late 2017, big name companies quittingMyanmar have included New York-based law firmHerzfeld & Rubin PC, London-headquarteredBryan Cave Leighton Paisner and insurerSamsung Life. Starbucks called off plans to set upin Yangon, while online travel guide companyTravelfish suspended its research on Myanmar.Reliance Industries and Norway’s Statoil alsodecided to hand back their offshore blocks.Reasons cited for leaving have included sluggishreforms and politics.

MIL, which launched on London’s AlternativeInvestment Market in June 2013, this weekreported a pretax loss of $2.4 million for the yearto March and announced it planned to wind up.Its stock, untraded on Wednesday in London, waslast quoted at $0.85 a share, down 28 percentover 12 months.Its net asset value fell 12pc to $33.3 million in theyear to March 31 due to a reduction in theassessed value of investments in microfinancecompany Myanmar Finance International andpharmacy chain Medicare.The company said factors contributing to itsdecision to close down included “the post-Rakhine crisis difficulties in raising significantcapital in western markets, a fragile domesticbanking system, increasingly complex politicallandscape and the slow pace of reform.”

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-investments-another-corporate-casualty-myanmars-harsh-realities.html


07 Oct 2019


Singapore well-positioned to contribute expertise to infrastructure in region: Infrastructure Asia chief

SINGAPORE – Mention infrastructure inSingapore, and one might think of Jewel atChangi Airport, or the Greater SouthernWaterfront development announced in PrimeMinister Lee Hsien Loong’s recent National DayRally.But the city-state is looking beyond its shores toexport its infrastructure expertise.Since October last year, Infrastructure Asia (IA),which is jointly set up by Enterprise Singaporeand the Monetary Authority of Singapore, has metmore than 300 international developers, financialinstitutions and multilateral development banksto broker deals and share best practices in theregion.The office is now active in seven regional markets,including Myanmar, Indonesia, the Philippinesand India, said IA executive director Seth Tan.For partners used to direct financing, workingwith a “development buddy” like IA that providesin-kind support takes getting used to, said the 48-year-old former banker.An example is the New Yangon City urbandevelopment project in Myanmar, where IA

helped scope the evaluation for power and naturalgas supply and distribution.“When we first approached the New YangonDevelopment Company Limited (NYDC), theycouldn’t quite understand our model, as typicalassistance is through funding to hire a consultant.It took us a few months and seven meetingsbefore they decided to work with us,” he said.NYDC is an entity under the Yangon regionalgovernment that runs New Yangon City.“But this model, leveraging on our partners in theSingapore ecosystem to provide catalytic advice,turned out to be interesting to NYDC, as we arenot bounded by our own office capabilities or anysingle consultant.”

Source: Consult Myanmarhttps://consult-myanmar.com/2019/10/07/singapore-well-positioned-to-contribute-expertise-to-infrastructure-in-region-infrastructure-asia-chief/


07 Oct 2019


Deal to Be Signed for BRI-Related Economic Zone in Myanmar's Kachin State

YANGON – The Kachin State government isplanning to sign an agreement next month on theestablishment of a China-backed economic zone,paving the way for the Belt and Road Initiative(BRI) project.Under the China-Myanmar Economic Corridor(CMEC) agreement, which is also a part ofChinese President Xi Jinping’s grand BRI vision,Kachin State signed a memorandum ofunderstanding (MOU) with Yunnan TengchongHeng Yong Investment Company (YTHIC) in May2018 for implementation of the MyitkyinaEconomic Development Zone.The project, also known as the Namjim IndustrialZone, is 25 km from Myitkyina, the Kachincapital.“We are expected to sign an agreement nextmonth,” the Kachin State chief minister, Dr. KhetAung, told The Irrawaddy.“Currently, we are finalizing detailed negotiationsand a full master plan from the Chinesecompany.”YTHIC and the Myitkyina zone committee,formed by the Kachin State government, are

expected to build the massive site onapproximately 19 sq. km along the historic LedoRoad.The road was built during World War II so theAllies could supply Chinese troops fighting theJapanese. It linked Ledo, in Indian Assam, andKunming in China’s Yunnan Province.The project is expected to cost more than US$400million (612.5 billion kyats) and include nearly500 factories and 5,000 buildings.Kachin’s chief minister said the state governmentwould sign a joint-venture agreement after theinitial deal.He said domestic investors would be invited toback the project.“We hope the project construction will get off theground early next year,” the chief minister said.The development zone is one of the lesser-knownChinese-backed projects in Kachin State and hasreceived criticism over a lack of transparency.Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/deal-signed-bri-related-economic-zone-myanmars-kachin-state.html

NewspapersThe Irrawaddy

07 Oct 2019


VPower Group wins Myanmar’s emergency power tender

Hong Kong-listed VPower Group said itsconsortium with Myanmar’s Zeya & Associateshad been provisionally awarded four of the fiveemergency power projects tendered by the energyministry in June.The consortium said it won three projects thatwould use imported liquefied natural gas inRakhine’s Kyaukphyu, Yangon’s Thanlyin andThaketa, totalling 900 megawatts. It also secureda 20MW project that would use gas supplied bythe government in Kyun Chaung.Letters of acceptance for each of the projects havebeen issued by the Ministry of Electricity andEnergy’s Electric Power Generation Enterprise,VPower said in a statement. “All the projects areexpected to commence commercial operation inthe first half of 2020.”The consortium still needs to negotiate terms ofthe contract - including the power purchaseagreement - with the government. Industryconsultants suggest these negotiations will bechallenging, given the tough terms set down bythe ministry.The energy ministry did not immediately respond

to requests for comment by The Myanmar Times.It is unclear who won the tender for the fifthproject -- a 120-MW plant in Ahlone townshipwhich would also use gas supplied.VPower joint CEO Rorce Au Yeung said:“Together with our existing power projects ofmore than 360MW in operation, the addition ofthe 920MW projects is going to strengthen ourleadership in the distributed power industry inMyanmar and Asia.”As of 2018 Myanmar’s electricity generationcapacity totalled 3539MW, according to ministryestimates, making VPower an important player inthe power market.The tender for the five projects was announced bythe ministry in late June, with a window of merelya month. The LNG-to-power projects’ shortimplementation deadline (210 days) and heavypenalties for missing the deadline have beenwidely criticised by industry experts.Source: Myanmar Timeshttps://www.mmtimes.com/news/vpower-group-wins-myanmars-emergency-power-tender.html


11 Oct 2019

PwC | October 2019

3. Weekly New Tenders

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PwC | October 2019

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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MOEE: Invitation For Open Tender – Myanma Oil and Gas Enterprise, Closing date: 04 Nov 2019

http://www.mmtimes.com/

https://tender.yangon.gove.mm/

http://consult-myanmar.com/

http://www.myanmar-opportunities.org/mm/tenders

http://www.buildersguide.com.mm/en/

PwC | October 2019

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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WB: TA Activity to establish a city-owned Yangon Flood Resilience Strategy, Closing date: 21 Oct 2019

WB: School and teacher surveys (including filmed lessons), Closing date: 21 Oct 2019

WB: National Electrification Project: Insulators and related fittings, Closing date: 20 Nov 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | October 2019

4. MIC Permitted Projects

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PwC | October 2019

MIC Permitted Projects (Meeting 16, 2019)

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No. Name of Company Type of Investment Form of Investment

1 ISE-OVO Co., LtdLayer breeder farm and sales of chicken and egg

Joint Venture

2Myanmar Huake Industry and Trade Co., Ltd (China 80%:Myanmar 20%)

Manufacturing and sales of liquid oxygen and nitrogen

Joint Venture

3AA Double ACE Construction Material Co., Ltd (Thainwan 50%, China 45%, Myanmar 5%)

Manufacturing and marketing of composite cement

Joint Venture

4 Pyi Phyo Tun International Co., LtdBreeding, rearing of oyster and sales of culture pearl

Wholly Myanmar owned

5 Hubs MK Co., Ltd Losistic HUB Wholly Foreign owned

Source: DICA

PwC | October 2019

5. Upcoming Events

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PwC | October 2019

Upcoming Events (October 2019) List

Date Location Name of Event Sector Price Focus Points

18-20 Oct Yangon Yangon Hotel Expo Hospitality TBC

“Yangon Hotel Expo 2019 will be a one-stopshop for promoting and exchanging businessideas among Hoteliers, investors and touroperators in Yangon.”

30-31 Oct YangonMyanmar Textile Summit

Apparel and Clothing

USD1700

“Myanmar Textile Summit 2019, organizedby Shanghai ECV International, is going tobe held on Oct. 30th - 31th, 2019, in Yangon,Myanmar. The garment industry ofMyanmar has a huge potential to contributeto national economic growth as a substantialemployment giver, and attract foreigninvestment.”

31 Oct-02 Nov Yangon MyanFurnitureHome andOffice

TBC

“MyanFurniture is an internationalfurniture, architecture and interior showwhich showcases furniture for home, office,gardens, along with opportunities togenerate business in a comprehensiveplatform.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

https://www.go-myanmar.com/events-and-conferences

https://10times.com/myanmar

PwC | October 2019

Upcoming Events (November 2019) List


01-02 NovMandalay

International Conference on Sustainable Water Management (ICBMSE)

Environmentand Waste

TBC

“International Conference on SustainableWater Management aims to be one of theleading International conferences forpresenting novel and fundamental advancesin the fields of Water Management andEnvironmental Science.”

06-07 Nov Yangon Oil & Gas MyanmarPower and Energy

Free

“Oil & Gas Myanmar is the only specializedoil & gas event in Myanmar that bringstogether an international congregation ofboth upstream and downstream oil and gascompanies and also its supporting industriesgathered in Yangon to showcase the latestdevelopments in the oil and gas industry.”

06-07 Nov Yangon

International Conference on Advanced Information Technologies

IT andTechnology

MMK 70,000

“International Conference on AdvancedInformation Technologies will cover theareas of research and development in thefields of advanced informationtechnologies.”

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PwC | October 2019

Upcoming Events (November 2019) List (cont’d)


13-15 NovYangon

ASEAN LPG Forum Series: LPG Myanmar

Power and Energy

TBC

“With the latest announcement to increasethe tariff rate, LPG demand is expected tosurge for both household and commercialconsumption. Massive infrastructure andinvestment in LPG is ongoing in Myanmar.”

28-30 Nov Yangon MyanbuildBuilding and Construction

TBC

“Myanbuild is an international building andconstruction industry exhibition andconference which showcases a wide range ofindustry-related products and services fromvarious international brands. The event alsoprovides the attendees with a comprehensiveplatform to showcase construction brands inthe Myanmar market..”

29 Nov- 01 Dec YangonElectricity & Energy Expo

Power andEnergy

TBC

“Electricity & Energy is the largest andlongest running regional electricity & energyconference and exhibition in South EastAsia, making it a well-known and trustedbrand. The event boasts both a strategicconference and a large trade exhibition.”

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© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Mark RathbonePwC Capital Projects and Infrastructure Leader, Asia+65 6236 [email protected]

Jennifer TayPartnerCapital Projects & Infrastructure, PwC Singapore +65 8876 [email protected]

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