pwc myanmar weekly business intelligence · 2019-09-09 · businesses,”said u myo khaing oo, the...

PwC MyanmarWeekly Business Intelligence

Issue 17707 September 2019

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PwC | September 2019

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1. Weekly Key Financial & Business News

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Weekly Key Financial & Business NewsHeadlines

No proposals or plan to permit casinos: Yangon Region Chief Minister

Developers asked to pay security deposit on jointly owned buildings

Dawei-Kanchanaburi road construction expected to start soon

K3 trillion more expected from higher power tariffs

4

Vehicles at the forefront of Myanmar’s drive for industrial growth


Weekly Key Financial & Business NewsHeadlines

British chamber set to work with Mandalay business associations

Bosses of Myanmar’s Controversial New Yangon City Project See Major Shakeup

US-China tiff offers opportunity

Demand sees gold prices surge to nearly K1.3million

5

Questions arise over cost, accessibility of two-step loans

PwC | September 2019 6

Developers asked to pay security deposit on jointly owned buildings

FOR construction of jointly owned buildings,developers will now have to hire an appraiser anddeposit 15 per cent of the estimated value of theproperty with a bank, according to the YangonRegion Collectively Owned BuildingsConstruction Management Committee“Currently, developers don’t have an appraiser tocalculate the partial value of jointly ownedbuildings. So, they are not being issuedconstruction licenses for building jointly ownedbuildings. They have already submitted a requestto the authorities concerned to hire an expatriatepartial value appraiser. Additionally, developerswill have to make a 15 per cent security deposit ata bank. The purchasers will also have to depositmoney at the same bank. We are havingdiscussions now related to when a deposit can bewithdrawn from the account, and also, how it canbe withdrawn,” said U Myo Myint, a member ofthe committee.If the matter of appraising the partial value can beresolved, developers who have alreadyconstructed buildings according to theCondominium law will not have to make the 15-

per-cent security deposit.“Currently, we are making arrangements fordevelopers to hire a partial value appraiser inMyanmar. Construction licenses are expected tobe issued at the end of September to those whoare holding a license for construction of jointlyowned buildings,” said U Myo Myint.“We’ve asked them to deposit 15 per cent for thesake of safety. But, we haven’t decided on a bankyet. When the bank has been chosen, they willhave to deposit 15 per cent with that particularbank, and the purchasers will also have to depositmoney with the same bank,” he said.The collectively owned buildings law was enactedon 29 December, 2016, and its provisions havebeen amended several times since then. Underthe law, foreigners are permitted to purchaseapartments, but foreign ownership of jointlyowned buildings cannot be more than 40 per cent.

Source: Consult Myanmarhttps://consult-myanmar.com/2019/09/02/developers-asked-to-pay-security-deposit-on-jointly-owned-buildings/

NewspapersConsult Myanmar

02 Sep 2019


No proposals or plan to permit casinos: Yangon Region Chief Minister

THE Yangon Region Investment Committee(YRIC) has not received any proposals for casinobusinesses, and it does not plan to green lightsuch businesses, said U Phyo Min Thein, theYangon Region Chief Minister.He made the remarks at a press conference heldon Wednesday at the YRIC office.“There is no proposal for setting up a casinobusiness in Yangon Region. Also, the investmentcommittee does not plan to endorse suchbusinesses,” said U Phyo Min Thein.“The casino legislation is still being drafted. Afterthe rules and regulations are drawn up, the MICwould be able to grant permission for casinobusinesses,” said U Myo Khaing Oo, the secretaryof the YRIC.The Myanmar Investment Commission (MIC) hadreceived enquiries for establishing casinobusinesses, especially from Macau.On 9 February, 2018, U Aung Hlaing Win, arepresentative of the Mingaladon constituency,had raised a question at the Pyithu Hluttaw,asking whether casino businesses would bepermitted in islands where most tourists flock to,

as such businesses can earn revenue and helpimprove the hotel and tourism business.Union Minister for Hotels and Tourism U OhnMaung had responded that the Ministry of HomeAffairs had agreed to allow casinos only after theamendment of the Gambling Law 1986. “Underthe existing law, casino businesses at islands thattourists usually visit cannot be approved. We willwork for this as we have already obtainedapproval from the concerned ministry,” he hadsaid.On 22 August, 2018, the Public AffairsManagement Committee submitted the 2018gambling bill, including six chapters and 23sections, before the Pyithu Hluttaw.However, the two Hluttaws were divided over the2018 gambling legislation.

Source: Consult Myanmarhttps://consult-myanmar.com/2019/09/02/no-proposals-or-plan-to-permit-casinos-yangon-region-chief-minister/

NewspapersConsult Myanmar

02 Sep 2019


Dawei-Kanchanaburi road construction expected to start soon

An invitation to tender for the project to build thetwo-lane Dawei-Kanchanaburi road will be issuedsoon, says an official for the Dawei SpecialEconomic Zone Management Committee.“As the road project is a major component of thespecial economic zone (SEZ), we hope to startwork on its construction as soon as possible,” saidDawei Special Economic Zone ManagementCommittee Secretary U Tint Tun Naing.An eight-month study on the possible impacts ofthe road project has already been carried out andits results made public. The project will beimplemented as soon as possible after anagreement for a loan is signed with Thailand, UTint Tun Naing said.He said that the project involves the upgrading ofan existing dirt road and that the PyidaungsuHluttaw (Assembly of the Union) has approvedthe acceptance of the loan for the project whichThailand has agreed to provide, adding that theagreement for the loan is expected to be signedsoon.The loan will be for 4.5 billion baht (K220.6billion) over a 30-year period with an interest rate

of 0.1 percent and interest-free for the first 10years.While the amount of the loan has been agreed, thefigure may change according to the needs of theproject, U Tint Tun Naing said, adding that theMinistry of Construction will oversee the project.According to the Ministry of Commerce, the hopeis that the Dawei Special Economic Zone project,can be completed in three years.Although an agreement was signed with Thaiconstruction company Italian-Thai DevelopmentPLC to build the initial phase of the Dawei SEZ in2008, work was suspended in 2013 due todissatisfaction over the Thai company’sperformance.In 2015, another tender was invited to the resumethe project. The tender was again won by Italian-Thai, although this time around the scale of theproject was reduced.

Source: Myanmar Timeshttps://www.mmtimes.com/news/dawei-kanchanaburi-road-construction-expected-start-soon.html

NewspapersMyanmar Times

04 Sep 2019


K3 trillion more expected from higher power tariffs

The government is expected to collect K3 trillionmore from the electricity generation in fiscal2019-2020 compared to the previous year nowthat power tariffs have been raised since July,Deputy Minister of Planning and Finance UMaung Maung Win said in the PyidaungsuHluttaw (Assembly of the Union) on Wednesday.He added that the new power tariffs wereincluded when computing the budget for thecoming fiscal year beginning October 1.In total, the Ministry of Electricity and Energy isexpecting to collect revenue amounting to K7.5trillion in the coming fiscal year.According to the National Planning Bill, thegovernment aims to produce more than 32,313kilowatt-hours by installing up to 6653 megawattsof power generation capacity via hydropower,coal, solar, diesel and natural gas. This willprovide electricity to some 2923 villages. –Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/k3-trillion-more-expected-higher-power-tariffs.html


05 Sep 2019


Vehicles at the forefront of Myanmar’s drive for industrial growth

Toyota is developing an assembly plant inMyanmar, signaling strong growth prospects inthe local market as the country looks to expand itsmanufacturing output.In late May the Japanese carmaker announced itwill establish its first vehicle assembly plant in thecountry, in the Thilawa Special Economic Zone(SEZ) just outside of Yangon.Once it is fully completed in 2021, the $52.6mplant will have the capacity to assemble around2500 Toyota Hilux pickup trucks per year fromsemi-knocked-down (SKD) kits.At present, Toyota exports some2000 passengerand commercial vehicles to Myanmar for salethrough authorised dealerships. The newdevelopment will see it follow in the footsteps ofSuzuki and Nissan from Japan, Hyundai and Kiafrom South Korea, and Ford from the US, each ofwhich has a production or assembly presence inthe country.There has been a recent rise in car sales stemmingfrom the government’s decision in 2016 to imposeimport restrictions on second-hand vehicles, andthen in 2017 to offer tax incentives for companies

that assemble vehicles locally.Compared to cars that are imported as a finishedproduct, locally produced SKD vehicles tend to beless expensive for the end-consumer. New carsales totalled 17,000 units last year, double thefigurein2017.Furthermore, with a population of around 54m –55pc of whom are under the age of 30 – and arapidly growing economy, industry experts areconfident that demand for new vehicles willcontinue to increase.“There is also increasingly strong business-to-business growth in the market,” YoshihisaTonozuka, chief representative of Toyota inMyanmar, told the Oxford Business Group (OBG).“With strong agricultural, extractive andindustrial sectors, we expect 4x4 vehicles to driveour growth and contribute to the development ofMyanmar industries.”

Source: Myanmar Timeshttps://www.mmtimes.com/news/vehicles-forefront-myanmars-drive-industrial-growth.html


06 Sep 2019


Bosses of Myanmar’s Controversial New Yangon City Project See Major Shakeup

YANGON—The sole developer for thecontroversial New Yangon City project has seensome leadership changes, as two out of fivedirectors have been replaced.New Yangon City Development Company (NYDC)announced on Wednesday that Yangon DeputyMayor U Soe Lwin has assumed the role ofchairman, replacing Daw Nilar Kyaw.Yangon City Development Committee secretaryDaw Hlaing Maw Oo will be a new director ofNYDC, replacing U Han Htoon.Both Daw Nilar Kyaw and U Han Htoon arecabinet members of the Yangon regionalgovernment. The vice chairman and CEO of thecompany is Serge Pun, a property mogul andchairman of Singapore-listed Yoma StrategicHoldings.The changes in the board of directors came 17months after the formation of NYDC by theYangon government to develop the site. Theannouncement said the reorganization was madeby the regional government, without mentioningany reasons for the replacement.On the west bank of the Yangon River, the

20,000-acre New Yangon City is still in itsplanning phase. Yangon Chief Minister U PhyoMin Thein boasted that the new city would create2 million jobs.So far, NYDC has signed a framework agreementwith China Communications Construction Co. Ltd(CCCC) in April last year for US$1.5 billion forStage 1 infrastructural work, including twobridges, roads, power plants, water andwastewater treatment plants and an industrialestate.The NYDC has submitted project details,including technical specifications, a financialproposal and business model of the first stage tothe Union government for approval.Last month, the developer chose Thailand’s PTTGroup, comprising PTT, PTTEP and GPSC, forpower supplies, and India’s Indraprastha GasLimited and Gail Consortium (IGL Consortium)for natural gas supplies.Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/bosses-myanmars-controversial-new-yangon-city-project-see-major-shakeup.html

NewspapersThe Irrawaddy

05 Sep 2019


British chamber set to work with Mandalay business associations

The British Chamber of Commerce Myanmar(BCCM) has signed two memorandums ofunderstanding (MOU) with the two businessassociations in Mandalay.The BCCM signed the MOUs with the MyanmarJapan Alliance Business Association (MABA) onSeptember 2 and with the Mandalay RegionChamber of Commerce and Industry (MRCCI) onSeptember 3 to explore business opportunities inMandalay.“I think both associations are very important forMandalay, and also Myanmar, by doing their partto introduce the best practices to businesses. Weare very keen to work with the associations toexplore the potential of special investments, andbusiness opportunities from the UK. BCCM is alsoeager to introduce best practices from the UK,particularly in areas such as renewable energyand education,” BCCM CEO Peter Crowhurst toldThe Myanmar Times.He added that the signing of agreements withmultiple organisations in Mandalay allows BCCMto work with more businesses in Mandalay.“We plan to hold a number of events with Dana

Facility [a private sector development programmebased in Myanmar, funded with £25 million fromthe UK government’s Department forInternational Development] at the end of themonth.And we want to hold other networking events inMandalay every two months,” Crowhurst said.“Mandalay is important to the BCCM becauseMandalay is the crossroads of the country. Thelocation is very important culturally andeconomically.”MABA Secretary Ko Myo Thant said he is happyabout the signing of the MOUs and is lookingforward to working with the BCCM.

Source: Myanmar Timeshttps://www.mmtimes.com/news/british-chamber-set-work-mandalay-business-associations.html


06 Sep 2019


US-China tiff offers opportunity

While strolling around Yangon’s city centrerecently and reading news alerts about the US-China trade war, something caught my eye atKantharyar Centre across from Kandawgyi Lake.It was a sales gallery at the new shopping centredisplaying SUVs and sedans.What caught my attention was the brand of SUVmost prominently displayed: Gold AYA Motors,which is a joint venture formed in 2017 by aChinese automotive group comprising BYD andChanghe. From production to after-sales service,the brand’s operations are based in Yangon andMandalay’s Myotha Industrial Park. For the firsttime, Myanmar is capable of producing fullylocalised vehicles and establishing a wide networkof local auto-parts suppliers, which is a milestonein the country’s industrialisation.So what’s next for Myanmar?That brings us back to the US-China trade war. AsDonald Trump recently announced an all-outtariff war against Chinese goods and Xi Jinping isenforcing retaliatory tariffs against Americanproducts, economists and commentators havestarted a guessing game as to which countries

would gain the most from this process, with manyputting their bet on China’s neighbour, Vietnam.A closer look at the data, however, suggests aslightly different story – a story that is worthstudying among Myanmar’s policymakers.Firstly, Vietnam lacks a skilled workforce and isable to meet Chinese manufacturing standards inspite of a sharp rise in labour costs in recentyears.Secondly, despite the Vietnamese government’sefforts to upgrade the road and port networkacross the country, the dearth of first-tierinfrastructure is all too apparent when comparedto China’s efficient and advanced transportationnetwork.Rising real estate and industrial estate costs addto a long list of challenges facing foreigninvestors. According to the South China MorningPost, experts are warning that those who have yetto set up shop in Vietnam may have alreadymissed the boat.Source: Myanmar Timeshttps://www.mmtimes.com/news/us-china-tiff-offers-opportunity.html


06 Sep 2019


Demand sees gold prices surge to nearly K1.3million

Uncertainty and seasonal factors have beenleading more people to jump into gold as a safehaven, pushing up prices of the precious metal,gold traders in Yangon say.Local prices for gold reached K1.278 million pertical (roughly 16.33 grammes) on September 4.Despite the rising price, demand has doubled inrecent days, said U Hla Ohn, the owner of AungThamardi Gold Shop on 29th Street in Yangon.“Now people are jostling at our shop. There arenot many transactions for gold jewellery, butpeople are jostling to buy pure gold due touncertainty over the stability of banks. My shop isnow selling about 2 viss (about 3.26 kilogrammes)of pure gold a day now, up from the usual 1 vissbefore. Demand for pure gold was good before,but it sharply increased this week,” U Hla Ohnsaid.U Myo Myint, chair of the Yangon Region GoldEntrepreneurs Association, said the associationhas issued rules for its members to follow, inorder to stabilise gold prices. According to theassociation, members are now required to “dealonly in cash transactions, not participate in

futures contracts, and not undertake actions thatmay hurt the association’s reputation”.“Demand for pure gold is increasing at gold shopsin each township, because people are worriedabout the economy and the stability of banks. Inmy experience, gold prices will return to normalin about two weeks,” said U Win Myint, thesecretary of the Yangon Region GoldEntrepreneurs Association.A scarcity of gold is also a factor in the rise in goldprices, people in the gold business.“During the early rainy season, local gold panningcamps are closed. As no licence renewals areallowed, gold supplies become rarer. It is notuncommon that gold prices are high towards themiddle and the end of the monsoon season. Itnormally rises, but there are some additionalfactors this year and thus gold prices are seeingrecord-highs,” said U Win Myint.

Source: Myanmar Timeshttps://www.mmtimes.com/news/demand-sees-gold-prices-surge-nearly-k13million.html


06 Sep 2019


Questions arise over cost, accessibility of two-step loans

Despite the important role small and mediumenterprises (SMEs) play in the economy, repeatedrequests for more affordable loans and easieraccess to financing remain a challenge for thesector.One avenue for SMEs to access financing inMyanmar is via funds provided by officialdevelopment assistance organisations such asJapan International Cooperation Agency (JICA).Under these loans, JICA provides funds togovernment and local banks at interest rates of aslow as 0.1pc. The banks then disburse the loans toend users at around 8.5pc. Of this, 4pc isabsorbed by the government, while the remaining4.5pc by the private banks. Recipients are stillrequired to provide collateral or take up creditguarantee insurance.Early last month, the Mandalay Region Chamberof Commerce and Industry (MRCCI) issued itsBusiness Agenda 2022, an advocacy roadmapoutlining MRCCI policy positions on the issues ofgreatest importance to Mandalay employers.In the roadmap, the MRCCI said although the8.5pc interest rate loans are available, many

SMEs and start-ups face difficulties in obtainingthem and many simply opt for the normal loanswith interest rates of 13pc, adding that red tape inapplying for these loans can take up aconsiderable amount of time.“We need to get project loans and other loans asrapidly as possible. If so, we can compete moreeffectively. The Central Bank of Myanmar needsto ease interest rate restrictions imposed onprivate banks,” said MRCCI Deputy Chair U MyatHtut.On August 27, MP U Maung Myint, who is alsothe former union minister of industry, questionedthe current loan system during a regular sessionof Pyithu Hluttaw.“Although 8.5pc is less than the rate of 13pc fornormal loans, it’s still too high for SMEs. It’scrucial for the government to review the 8.5 pcinterest rate if they genuinely want to help SMEsgrow,” said U Maung Myint.

Source: Myanmar Timeshttps://www.mmtimes.com/news/questions-arise-over-cost-accessibility-two-step-loans.html


06 Sep 2019


2. Weekly Key Policy News

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Weekly Key Policy NewsHeadlines

UK shifts trade policy on Myanmar to open markets further

Myanmar steps up on company director accountability

No need to be worried about bank loan rumours: CBM

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India-Myanmar bilateral relations ‘to reach new heights’

Unhappily ever after: Myanmar’s power meter racket


UK shifts trade policy on Myanmar to open markets further

Britain is signalling a shift in its trade policy onMyanmar to focus on opening up specific sectorswhere UK companies already have a foothold,including education, financial and professionalservices, infrastructure and energy.In an interview with The Myanmar Times, WarrenPain, director of international trade at the Britishembassy, set out how the UK is changing itsapproach, also in the context of its loomingdivorce from the European Union.Making its push for further engagement andmarket liberalisation, the UK has already decidedto maintain Myanmar’s tariff-free access, whetheror not the EU eventually decides to withdraw suchtrade privileges because of human rights abuses,as reported by The Myanmar Times.Addressing serious concerns raised by a UNreport last month into crimes against ethnicgroups committed by the military and itscorporate web, Mr Pain called on UK companiesto be “a bit more careful” when doing business inMyanmar but said they should continue to beactive in Rakhine state “with caution”.“We do not think that the recommendations of

the report and its thoroughness are such that weneed to completely revise our policies and adviceto British businesses at the moment. We thinkthat it’s right that the UK government and theDIT [Department for International Trade]continue to support companies which are lookingto help work on the economic development ofMyanmar,” Mr Pain said.Recognising economic progress and changes insome sectors, the DIT now focuses more onworking for companies already present inemerging sectors, Mr Pain explained. Previouslypolicy was centred on classic trade promotion,such as bringing in trade delegations. While DITwill continue to raise awareness about marketopportunities, this will be less of a priority.

Source: Myanmar Timeshttps://www.mmtimes.com/news/uk-shifts-trade-policy-myanmar-open-markets-further.html


02 Sep 2019


Myanmar steps up on company director accountability

Company directors in Myanmar now face legalrepercussions if they fail in their corporate dutiesunder the new Myanmar Companies Law, whichcame into force last August.Articles 165-172 of the Companies Law includes aset of directors’ duties, aimed at ensuring that acompany is properly run and managed in the bestinterests of shareholders.Eddy Jabnoune, resident director of Audier andPartners, said directors could be held personallyliable under the new law if it can be proven by theaffected stakeholder that the director hasbreached one of his or her duties.“In exercising his/ her powers and discharginghis/her duties, the director must act with care anddiligence,” the lawyer said. A director is notexpected “to be an expert on everything” butshould “always act in good faith”, remain well-informed on the company’s operations and avoidadvancing material personal interest and, whenimpossible, disclose it.He urged directors to read the document“Company Directors Guide” prepared by theDirectorate of Investment and Company

Administration (DICA) to understand their dutiesand carefully review Articles 165-172 of theCompanies Law.The implementation of new director duties aimsto provide a legal framework for enhancedcorporate governance.According to the Myanmar Corporate GovernanceScorecard 2018, the companies surveyed werelagging when it came to board responsibilities. Itrecommended that companies focus on improvingboard composition along with boardaccountability for company decisions.Although there are frequent elections and re-elections of directors, there is a lack ofindependent directors and policies to evaluatethem, the scorecard concluded.Effective director duties are fundamental forsuccessful business operations and ensures thecompany’s competitiveness in the market, MrJabnoune added.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-steps-company-director-accountability.html


03 Sep 2019


No need to be worried about bank loan rumours: CBM

Rumours of runaway non-performing loans(NPLs) at local banks are unfounded and thepublic has nothing to be concerned about, DawKhin San Hlaing, chair of the Pyithu Hluttaw’sBanking and Financial Development Committee,said after a meeting between the committee andcentral bank on Tuesday evening.“The CBM reassured us that private banks arenow adhering to regulations and taking stricteraction on errant borrowers, so there is nothing toworry about,” said Daw Khin San Hlaing, who isalso a Pyithu Hluttaw MP from PearlConstituency of Sagaing Region.The rumours arose after comments made by CBMdeputy governor U Soe Thein in response toquestions by MPs about the CBM’s stance onbusinesses which have difficulty repaying theirloans and if there are plans to classify NPLs.U Soe Thein said that there is a large amount ofunpaid loans that have been rolled overindefinitely and that banks should followregulations issued by the CBM in 2017 in dealingwith outstanding overdraft loans. He added thatbanks should be stricter when issuing new loans

and raise efforts to collect debt from errantborrowers.U Soe Thein said that it was the central bank’sduty to ensure that banking and financialregulations were adhered to and that its mandateincluded oversight on banks’ responsibilities forthe deposits that they accept.As the CBM has done what is necessary to helpborrowers repay their debt, the central bank is nolonger considering any lenient solutions whendealing with NPLs, he said.On Monday evening, the central bank issued astatement to clarify U Soe Thein’s comments,saying they did not align fully with its stance. TheCBM that it would continue to work withborrowers to facilitate loan repayments and as theCBM is the lender of last resort, it will help andfully support the banks should the need arise.U Soe Thein resigned the following day but theCBM has yet to issue an official announcement onthe matter.Source: Myanmar Timeshttps://www.mmtimes.com/news/no-need-be-worried-about-bank-loan-rumours-cbm.html


04 Sep 2019


India-Myanmar bilateral relations ‘to reach new heights’

India’s ambassador for Myanmar, Shri SaurabhKumar, exuded confidence on ‘enhancing bilateralrelations between both the countries to newheights’ as the deeper engagements of recentyears between both the countries has alreadystarted yielding results.Addressing a gathering at Myanmar’s premierforeign policy think tank, Myanmar Institute ofStrategic and International Studies, (MISIS) onTuesday, the Ambassador pointed out, “ In thecoming years, with India’s ambitious ‘Act East’foreign policy, there is going to be a qualitativeenhancement of relations between India andMyanmar. This would be realized not onlythrough government to government efforts, butalso through a sustained people’s awareness,promotion of investment and partnerships withthe private sector, businesses and people; bothcountries need to work together and learn abouteach other.Delivering an invited talk to the august gatheringof policy analysts, former diplomats and faculty ofMISIS, Shri Saurabh Kumar provided anexhaustive presentation on the contemporary

situation on relations between both the countries,issues and challenges and the future perspective.With over 1,600 KMs of shared border, Myanmaris the first stop for India’s Act East Policy as wellas its neighbourhood first policy. India’s focus onIndo-Pacific, as recently articulated by its foreignMinister is also seen as ‘logical step of furtherexploration, beyond Look and Act East policy andbreak out from the confines of South Asia’.It is from this vantage that there is a growingrealization at New Delhi level to accord significantfocus on Indo-Myanmar relations. This has alsobeen reflected in the fact that there have beenHeads of Government level visits between bothcountries almost every year during the past fewyears, expanding the areas of cooperationbetween the two countries. People to people andpolitical party visits also reflect the growing all-round interest in both countries.

Source: Mizzimahttp://mizzima.com/article/india-myanmar-bilateral-relations-reach-new-heights

NewspapersMizzima

05 Sep 2019


Unhappily ever after: Myanmar’s power meter racket

Electricity meters: it’s a good business – if youcan get it.For decades this market, worth tens, if nothundreds of millions of dollars, was closed tocompetition. Under the military junta, analoguemeters were either imported directly from abroador produced in country under a partnershipbetween the Ministry of Industry’s HeavyIndustry Enterprise and Japan’s Mitsubishi.In the early 2000s, a new player arrived on thescene: Ever Meter. From 2004 to 2016 it enjoyeda monopoly on the provision of analogue and thendigital meters to the Electricity Supply Enterprise.But now it is crying foul.Ever Meter’s position in the market began tochange after the National League for Democracygovernment took office in 2016 and introduced atender system to buy digital meters.Ever Meter won two tenders, in 2016 and 2017, tosupply digital meters to ESE but the ministry latercancelled the results. Ever Meter was also oneamong four bidders that passed the technical testfor a third tender in 2017, but the followingJanuary the ministry announced it had selected

Yangon-based Alpha Power and Junction RiverTrading Co Ltd, based in Muse, Shan State, tosupply ESE with four kinds of digital meters.Junction River signed a contract with ESE worthK14.6 billion, while Alpha Power’s contract wasfor K1.28 billion.U Myo Aung, the managing director of Ever MeterCo, Ltd, confirmed to Frontier that he submitted acomplaint to the Anti-Corruption Commissionafter the tender results were announced.The ACC is investigating senior officials in theministry, including minister U Win Khaing andhis deputy, Dr Tun Naing, but it is unclearwhether the probe is related to Ever Meter’scomplaint.ESE managing director U Saw Win Maung saidthe first tender was cancelled because it was “one-horse race”, and the second because there wereattempts to influence the decision.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/unhappily-ever-after-myanmars-power-meter-racket

NewspapersFrontier Myanmar

06 Sep 2019


3. Weekly Investment News

23


Weekly Key Investment NewsHeadlines

Keen investor interest in privatisation of Yangon water system

Influx of Japanese car parts companies expected in Yangon

Yangon approves $238M in hotel, tourism investments

24

Myanmar, South Korea ink agreements on infrastructure, investments

Malaysian firm wins smart-city project in Yangon


Keen investor interest in privatisation of Yangon water system

Investors are showing keen interest in managingand distributing water in Yangon, with a total of32 local and foreign companies having submittedexpressions of interest (EOI) for the job sinceAugust 28, when the Yangon City DevelopmentCommittee (YCDC) first announced itsprivatisation plans.The private sector has until October 28 to submitEOIs, after a tender process will be held.Yangon mayor U Maung Maung Soe said theYCDC has been facing difficulties preventingwater wastage and lacks the manpower requiredto prevent illegal tapping of water from the city’spipelines, which is then repackaged and sold forhigher prices in various municipalities, resultingin losses for the city.As such, the city has opted to allow privatecompanies to manage the supply and distributionof water in Yangon. U Maung Maung Soe addedthat a ceiling price will be fixed to prevent waterfrom becoming overly expensive.‘’Our aim is not to up the water price, but toreduce wastage and build a more efficient waterdistribution system with help from the private

sector,” he told The Myanmar Times.The YCDC currently collects K88 per unit of waterfor residential use and K110 per unit forcommercial use. One unit equals 220 gallons. Atthose levels, water prices charged do not coverproduction costs, with the governmentsubsidising the balance for the benefit of thepublic, U Maung Maung Soe said.To date, the YCDC has yet to increase watercharges in the city, even though around half thewater supplied is wasted, the council said.Yangon city’s water distribution system coversonly 45 percent of its population and as sometownships in Yangon Region do not get enoughmunicipal water.Poorer townships such as Hlaing Tharyar, ShwePyi Thar, Seikgyi Kanaungto and Dala get verylittle municipal water and face water shortagesevery summer.

Source: Myanmar Timeshttps://www.mmtimes.com/news/keen-investor-interest-privatisation-yangon-water-system.html


03 Sep 2019


Influx of Japanese car parts companies expected in Yangon

More Japanese car parts companies are expectedto enter Myanmar to meet demand from existingautomobile manufacturers with facilities inThilawa Special Economic Zone, said JapaneseAmbassador to Myanmar Mr Ichiro Maruyama.Japanese car maker Suzuki currently operates acar assembly plant in Thilawa, while Toyota willbegin operations at the SEZ in 2021, MrMaruyama said at Myanmar Thilawa SEZHoldings’ (MTSH) sixth annual general meetingon September 1 in Yangon.“Suzuki has started to invest in Thilawa SEZ,building factories and producing cars. Toyota hasalso made an official decision to invest. Whenthey come, many car parts companies will beneeded to support manufacturing,” he said.Suzuki has been operating in Myanmar since 1998and set up a plant in Thilawa SEZ in 2015. Thecompany has so far invested US$60million in itsfacility, where it has been assembling the SuzukiSwift since 2018.Toyota is currently building its first factory inMyanmar in Thilawa where it will locally producethe Toyota Hilux from February 2021. Toyota

currently sells the Hilux, Vios, Rush, and othervehicles in Myanmar by relying on imports.The car maker is expected to invest some US$52.6million in the facility. It intends to assemblearound 2500 Hilux vehicles in 2021, said MTSHchair U Win Aung.If more car parts companies invest in Myanmar,they can pass on Japanese technologies andmanufacturing know-how to local small andmedium enterprises, Mr Maruyama said. –Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/influx-japanese-car-parts-companies-expected-yangon.html


03 Sep 2019


Yangon approves $238M in hotel, tourism investments

Yangon’s Regional Tourism Committee recentlyannounced that investments totalling US$238million and K119.63 billion were approved for theregion’s hotels and tourism sector between Mayand August.In the same period, the committee approvedinvestments for 33 new hotels and eight guesthouses, approved 18 new hotels, 400 new travelagencies, and 200 tour guides.The surge in activity comes on the heels of newregulations calling for the formation of regionaland state tourism committees headed by chiefministers of states and regions. The committeesare empowered to approve investments in thehotels and tourism sector in their respectiveregions and states.Meanwhile, Yangon’s department of Hotels andTourism reported that over 743,000 travellersvisited Yangon in the seven months up to July,100,000 more than in the same period a year ago.There are currently some 430 hotels and motelsoperating in Yangon Region, according togovernment data.“Now, we are starting a rating system in Yangon

and working to ensure quality control in tourismservices. We need to encourage businesses in thesector to provide a full range of services toencourage tourists to come more than once,” saidYangon Region Minister of Hotel and TourismDaw Naw PanThinzar Myo.Having a rating system will encourage hotels inMyanmar to pay closer attention to the servicesthey provide and raise the standard and quality ofthe hotel industry, she added.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-approves-238m-hotel-tourism-investments.html


04 Sep 2019


Myanmar, South Korea ink agreements on infrastructure, investments

Myanmar and South Korea inked a series ofagreements on economic and infrastructuredevelopment during South Korean PresidentMoon Jae’s visit to Nay Pyi Taw on Tuesday.These include bilateral agreements for theconstruction of the Dala Bridge, or Korea-Myanmar Friendship Bridge, as well as the Korea-Myanmar Industrial Complex (KMIC) in Yangon.The president said South Korean investors wouldbe encouraged to invest in the KMIC.On Wednesday, the president also attended aceremony in Yangon to mark the beginning of theKMIC project. Located near Nyaun Hna PinVillage of Hlegu Township, the project will bedeveloped by the Korean Land and HousingCooperation (LH) and Ministry of Constructionacross 555 acres of land. Valued at US$100million, the project is expected to be completed in2024.The two governments also inked a memorandumof understanding (MoU) to conduct feasibilitystudies for the construction of the Dala SatelliteCity Project.“We expect the project to strengthen the

relationship between Myanmar and Korea. We’vesigned this agreement with the aim to cooperateon new township projects, economic affairs andother development programmes in the future,”said Yangon Chief Minister U Phyo Min Thein.South Korea’s KB Kookmin Bank and YangonRegion Government signed an agreement underwhich the bank will provide funds to constructaffordable housing for low-income earners.An MoU was also signed between KB KookminBank and Human Resources Development Serviceof Korea to provide support to Myanmar migrantworkers in Korea, facilitate money transfers andimprove working conditions.Earlier in the week, Leaders from the twocountries discussed providing assistance to theagriculture sector to facilitate rural development,cooperating on environmental conservation andpromoting tourism between the two countries.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-south-korea-ink-agreements-infrastructure-investments.html


05 Sep 2019


Malaysian firm wins smart-city project in Yangon

Berjaya Land Berhad, a subsidiary of BerjayaCorporation Berhad, one of the largestconglomerates in Malaysia, has won a tender for aproposed development project in Yangon.Yangon Region Chief Minister U Phyo Min Theinannounced this during the Malaysia-MyanmarConnect event held on August 30.In a filing with the Malaysian stock exchangeBursa Malaysia, Berjaya Land said that thecontract awarded by the Yangon Regiongovernment involves a public housing and mixed-development project on 74.05 hectares of landlocated along Myanandar Road and Shweli Road,Dagon Seikkan Township, Yangon, with anestimated gross development value ofapproximately RM2.63 billion (K941.8 billion).“The development includes affordable housing,mid- to high-end condominiums, shop houses,retail spaces, farmer’s market, community hall,schools and infrastructure, to be built in threephases.“Berjaya Land will announce the details of theproposed development once the group enters intothe definitive agreements with the relevant

parties,” Berjaya said in its statement to BursaMalaysia.U Phyo Min Thein said the public-housingportion of the Dagon Seikkan Smart City Districtproject is expected to provide homes for 30,000civil servants expected to retire next year.The smart-city project initially started as agovernment effort, but a decision was made toinvolve the private sector to speed up the project,he said, adding that the public housing portioninvolves quarters of staff from the Ministry ofConstruction. – Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/malaysian-firm-wins-smart-city-project-yangon.html


06 Sep 2019


3. Weekly New Tenders

30


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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MOTC: Invitation for Bids – Yangon Mandalay Railway Improvement Project Phase II, Closing date: 18 Oct 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/


ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (Administrative Staff - 2 Persons), Closing date: 30 Sep 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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ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (National Finance Manager), Closing date: 30 Sep 2019

ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (Accounts Assistant - 2 Persons), Closing date: 30 Sep 2019

ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (National Procurement Officer - 2 Persons), Closing date: 30 Sep 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/


Tenders (Multilateral organizations) List (cont’d)

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

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ADB: LOAN 47152-002 MYA: Irrigated Agriculture Inclusive Development Project (Translator cum Interpreter), Closing date: 30 Sep 2019

ADB: GRANT-9184 MYA: Economic Empowerment of the Poor and Women in the East-West Economic Corridor (48322-001), Closing date: 13 Sep 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/


4. MIC Permitted Projects

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MIC Permitted Projects (Meeting 14, 2019)

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No. Name of Company Type of Investment Form of Investment

1

Myanmar C.P. Livestock Co., Ltd.- Thana Holding Co., Ltd. (Thailand) 27%- Charoen Pokphand Enterprise Co., Ltd.(Thailand) 25%-CPG Enterprise Ltd. (British Virgin Islands) 48%

Breeder Farm and SalesOf Piglet

Wholly foreign owned

2

Myanmar C.P. Livestock Co., Ltd.- Thana Holding Co., Ltd. (Thailand) 27%- Charoen Pokphand Enterprise Co.,Ltd.(Thailand) 25%-CPG Enterprise Ltd. (British Virgin Islands)48%

Broiler Breeder Farm andSales Of Day Old Chick


3 GTIG (Myanmar) Industrial Park Limited.Development, Construction and Leasingof Factories and Supporting Dormitory


4 Shwe Sin La Min Co., Ltd.Construction and Leasing of Shopping Complex

Wholly Myanmar owned

5 Shwe Sin La Min Co., LtdConstruction and Leasing of Business Center and Shop House

Wholly Myanmar owned

Source: DICA


5. Upcoming Events

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Upcoming Events (September 2019) List

Date Location Name of Event Sector Price Focus Points

12-14 SepYangon Printech Myanmar IT Free

“Printech Myanmar convenes manufacturersof technologies for rotogravure, flexography,offset printing, digital printing, hybridtechnologies, and converting technologiesand it features a display of Machinery andequipment for prepress and printing forms,Machinery, lines and special equipment forthe papermaking industry, Co-extrusionequipment for packaging plastic films,Machinery, equipment, lines for corrugatedboard production, Machinery, equipment,lines for solid board and folding boardproduction, and much more.”

17-19 Sep Yangon Myanmar Connect Telecom TBC

“Myanmar Connect is the only conference toconnect the entire telecoms industry withinMyanmar and this year will explore thetelecoms sector and the wider ecosystem inMyanmar’s continued journey towards adigital future. The event unites local andinternational, well-established telecomsplayers with start-ups and projects withpotential, making this a fantastic opportunityto forge new business connections”

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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


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


26-29 SepYangon Power Expo Myanmar

Electric & Electronics

TBC

“Power Expo Myanmar is an internationalexhibition which showcases electricalappliances, electronics and electricalequipment. This event is the best sourcinghub in Myanmar for Electrical, Electronics &Electric Power Equipment.”

26-29 Sep Yangon

Myanmar International Auto Parts, Accessories & Motor Show (AMPAMyanmar)

Automotive TBC

“Myanmar International Auto Parts &Accessories Exhibition event will displayproducts like engine parts, automotive parts& accessories, automobile electronics, repair& maintenance, products, oil & gas products,motorcycle parts & accessories, car tuningproducts, wheels, tires & rims, wholevehicles etc.”

26-28 Sep Yangon Agri Myanmar Agriculture Free

“Agri Myanmar 2019 is the biggestinternational trade exhibition andconference on fertilizer, agro chemicals,machineries and products in Myanmar.”

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Upcoming Events (October 2019) List


03-05 OctYangon Myanmar Build & Decor Construction Free

“Myanmar Build & Decor is the best sourcefor architecture & interior buildingmaterials, interior design, furniture anddecor as well as the industry platform foreducational and knowledge sharing. Its offera networking platform to industry playersboth local and international during thisevent.”

09-11 Oct Yangon

International Construction Power & Mining Exhibition

Construction, Power & Energy,Mining

Free

“Building & Construction Myanmar is theleading event for Building & Construction,Electric Power & Renewable Energy, andMining & Minerals Recovery. It is truly theNo. 1 and largest industry event of its kind inMyanmar and provides the best platform toconnect to the country's rapidly expandinginfrastructure industries.”

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.”

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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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pwc myanmar weekly business intelligence · 2019-09-09 · businesses,”said u myo khaing oo, the...

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