PwC MyanmarWeekly Business Intelligence

Issue 14601 February 2019

www.pwc.com/mm

PwC | February 2019

Disclaimer

PricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they’re looking for. We’re a member of the PwCnetwork of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory and tax services.Tell us what matters to you and find out more by visiting us at www.pwc.com/mm.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2019 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved.PwC refers to the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please seewww.pwc.com/structure for further details.

The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. Theapplication and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advicespecific to your circumstances from your usual PricewaterhouseCoopers Myanmar Co., Ltd client service team or your other tax advisers.

2

PwC | February 2019

1. Weekly Key Financial & Business News

3

PwC | February 2019

Weekly Key Financial & Business NewsHeadlines

Yoma Strategic to raise $70m via Thai-denominated bonds

GE’s Vietnam plant embraces manufacturing tech

Myanmar’s Trust Venture picks majority in career advisory firm ‘Live the Dream’

Mandalay moves closer to e-government with data centre

4

Govt. signs two MoUs to produce electricity and sugar in Sagaing

PwC | February 2019

Weekly Key Financial & Business NewsHeadlines

Taiwan to help Myanmar build vertical industry in Textile and Garment production

State counsellor attempts to woo foreign investors

More projects to ensure sufficient water supply to Yangon : YCDC

Grab to launch shuttle bus services in Yangon this year

5

Dam project may go ahead, but scale or location could change

PwC | February 2019

Weekly Key Financial & Business NewsHeadlines

Two-lane road connecting Dawei SEZ to be built

Policy reforms depend on good implementation, UMFCCI says

Massive township development set to proceed

Government’s Message to Investors: Myanmar Open for Business

6

Survey starts for major railway project

PwC | February 2019 7

GE’s Vietnam plant embraces manufacturing tech

US industrial and manufacturing giant GeneralElectric Co (GE) is stepping up its investments inmanufacturing technology and digital innovationwith the first “Brilliant Factory” in the CLMV(Cambodia, Laos, Myanmar and Vietnam)economies. The New York-listed multinational isknown for innovative creations in various sectors,including the electric light bulb, the first US jetengine for commercial aviation, “rotate-only” CTscanner and HA Gas turbines, which recently wona Guinness World Record for efficiency, accordingto Wouter van Wersch, President & CEO of GEAsia Pacific, at a briefing for ASEAN media visit,which The Myanmar Times took part.Among those milestones, the “Brilliant Factory”in Haiphong, northeastern Vietnam, is the latestexample, he continued. The firm boasts 23factories in the region but only five “BrilliantFactories” - production unit with advancedmanufacturing technologies and digital efficiency- worldwide. After almost a decade of operations,GE’s Haiphong multimodal factory has producedand exported more than 6,000 units of generatorsystem to date and reached more than US$1

billion annual exports. The site today countsabout 1,000 employees and is expanding its localworkforce to more than 1,500 employees inresponse to the growing global demand forrenewable energies. Olivier Fontan, GERenewable Energy’s vice president, highlightedthat sourcing is a key factor for the firm’smanufacturing business, and Haiphong is “reallya good place” for this. Vietnam was chosenbecause of the country’s availability of skilledlabour, logistics and government support, amongother factors, according to Mr Fontan. Humancapital - capacity building for local employees -was a key challenge in upgrading the plant. “It is along and challenging journey to transform anddevelop a Brilliant Factory,” Trang Vu, the plant’sgeneral manager, explained in the pressconference. “We have very strong targets in termsof product and service quality, implementingadvanced manufacturing technologies and asustainable improvement culture.”Source: Myanmar Timeshttps://www.mmtimes.com/news/ges-vietnam-plant-embraces-manufacturing-tech.html

NewspapersMyanmar Times

27 Jan 2019

PwC | February 2019 8

Yoma Strategic to raise $70m via Thai-denominated bonds

SGX-listed Yoma Strategic Holdings Ltd is raisingTHB 2,220 million ($70 million) in a Thai baht-denominated bond issue to fund its businessexpansion in Myanmar, according to anannouncement by the company. The five-yearfixed rate bonds, priced at 3.38 per cent perannum, represent a premium of 124 bps above theequivalent maturity of Thai government bonds.The bond issuance was scheduled for January 25,2019. Yoma Strategic Holdings is behind realestate developments like Pun Hlaing Estate, FMIcity and also involved in food and beverage;automotive & heavy equipment; and financialservices. “The bond offering has allowed us todiversify our sources of funding and tapThailand’s strong domestic liquidity … Theproceeds will help to accelerate the growth of ourbusinesses in Myanmar,” said Melvyn Pun, CEO,Yoma Strategic. Part of the proceeds are plannedfor general corporate purposes, including therefinancing of existing debts. Yoma Strategic’sbond issue was granted approval by theThailand’s Ministry of Finance in May 2018. Thebonds have been rated a triple A by TRIS Rating

Co Ltd, a partner of S&P Global Ratings andguaranteed by the Credit Guarantee andInvestment Facility, a trust fund of the AsianDevelopment Bank. Twin Pine Group CompanyLimited and Bangkok Bank Public CompanyLimited were sole advisor and arrangerrespectively for the bond issuance.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/yoma-strategic-to-raise-70m-via-thai-denominated-bonds-118813/

NewspapersDeal Street Asia

27 Jan 2019

PwC | February 2019 9

Myanmar’s Trust Venture picks majority in career advisory firm ‘Live the Dream’

Yangon-based financial advisory firm TrustVenture Partners (TVP) has picked up a majoritystake investment in ‘Live the Dream’, aneducation and personal development platform,the company announced. ‘Live the Dream’ claimsto empower its audience with products like videointerviews with Myanmar leaders, entrepreneursand public figures. The platform, which claims tohave over 260,000 followers, also aims toprovides guidance to its followers to achieve theirdreams. The platform was founded by ShotaroSasa in August 2017, who is currently studying atCHUO university. ‘Youth in Myanmar oftenpursue career tracks that they don’t really strivefor – of course, they cannot realize their fullpotential. But the demand for well-educatedhuman resources is huge in this growingeconomy. The low level of talent is still one of themajor growth constraints,’ said Shinsuke Goto,CEO of Trust Venture Partners. TVP plans tomake more education investments in 2019, andsome of them could be through its investmentarm Yangon Capital Partners. In an earlierinteraction with DEALSTREETASIA, Goto said

YCP aims to invest in 20 to 30 startups inMyanmar over the next three years. According tothe World Bank’s data for 2017, the Ministry ofEducation of Myanmar spends 2.16 per cent of theGDP on education, which rose from 0.78 per centin 2011. Yet the number is far less thanneighbouring countries like Thailand, which spent4.12 per cent of its total GDP on education in2013. Development in the public educationsystem is expected in the country, with thecurrent challenges seen across schools that have ahigh student-to-teacher ratios and the need for anupgrade in curriculums. At the same time,preparation for the matriculation exam sets a highbar for Myanmar youths which leads youngpeople to spend little time in development valuesand interests. ‘Live the Dream’ aims to fill somepart of the gap. Prior investments made by TVPinclude participating in the venture investment ofMMTutors, a platform that connects students.Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/trust-venture-partners-takes-minority-stake-in-career-advisory-firm-live-the-dream-118672/

NewspapersDeal Street Asia

28 Jan 2019

PwC | February 2019 10

Mandalay moves closer to e-government with data centre

The Mandalay regional government has launcheda data centre as part of its efforts to implement ane-government system.“With this system, people will be able to observethe government’s performance and accessgovernment services more easily and quickly,”said Mandalay Chief Minister U Zaw MyintMaung during the launch of the centre lastThursday.“This is the part of a continuing effort to bring thegovernment and its services closer to the public,”U Zaw Myint Maung said.A tender to build the centre was called in 2017.Mandalay Region’s efforts to set up its e-government system began with the setting up of acommittee and the eMandalay web portal in 2016to offer services to the public from thegovernment’s departments.The project calls for the setting up of acomprehensive “level 4” web portal, establishing adata centre in Mandalay to act as an informationcentre of government offices in northernMyanmar, the establishment of an e-department,and the creation of a mobile application for

visitors to Bagan, said U Aung Kyaw Soe,associate secretary of the E-Government SystemImplementation Committee.Mandalay’s current web portal, which is at level 1,can provide information, forms and informationon procedures to the public for 71 of the 153government departments.“Level 4 will have an electronic payment systemthat will allow the online payment of fees to theregional development committee,” said U AungKyaw Soe. –

Source: Myanmar Timeshttps://www.mmtimes.com/news/mandalay-moves-closer-e-government-data-centre.html

NewspapersMyanmar Times

28 Jan 2019

PwC | February 2019 11

Govt. signs two MoUs to produce electricity and sugar in Sagaing

Sagaing Region government is signed MoUs toproduce electricity from biomass and sugar in theregion during Invest Myanmar Summit 2019 heldat Nay Pyi Taw, sources said.“We signed a first phase of project which worthUS$200 million to produce sugar. The overallproject will cost US$350 million. It will be a joint-ventured business between Great Wall FoodstuffIndustry Company Limited (Myanmar) and HongKong International Sugar Engineering Co. Ltd.(China, Yunnan State),” said an official from theregional government.“Investors from local and overseas, who came toattend the summit, can analyze the projects at thesummit and they can know easily about theprojects,” said Zaw Min Win, Chairman of theUnion of Myanmar Federation of Chambers ofCommerce and Industry (UMFCCI).The projects will be developed in KatharTownship.“We want to invite investors to make investmentin the region. We will help them as much as wecan,” said Dr Myint Naing, Chief Minister of theregion.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/govt-signs-two-mous-to-produce-electricity-and-sugar-in-sagaing-0

NewspapersEleven Myanmar

29 Jan 2019

PwC | February 2019 12

State counsellor attempts to woo foreign investors

State Counsellor Daw Aung San Suu Kyi onMonday urged an audience of business bosses toinvest in Myanmar in the wake of falling foreigndirect investment and slowing growth, pledging to“build an investment-friendly environment”.She was speaking at the first official investmentconference organised by her National League forDemocracy-led government intended to winsupport for her handling of the economy.However, businesses were lukewarm about thespeech, which did not touch upon the impact ofpolitical crises and offered few details on newreforms.Over the last year, Myanmar’s government hasbeen under increasing pressure to bolster theeconomy and support the private sector.Approved FDI fell short of the official estimatesby around 50 percent between April and October2018, while a survey for European companies lastmonth revealed that business confidence hasfallen to a three-year low.This month, research firm Fitch Solutionsdowngraded its 2019 growth forecast forMyanmar to 6.3 percent from 6.6 pc previously.

In her speech, Daw Aung San Suu Kyi toutedMyanmar’s investment opportunities, its lowlabour costs, strategic location and potential inhuman capital. She also doubled down on theimportance of Asia, in line with heradministration’s pivot towards Asian investmentsand tourism.“Throughout the past 40 years, our region hasexperienced the greatest surge in economicgrowth the world has ever seen.“This rapid growth within ASEAN and the rest ofAsia has spearheaded the creation of new traderelations, spurred the invention of newtechnologies, and facilitated the movement ofpeople, ideas, goods, services, and capital,” theState Counsellor told a crowd of investors anddiplomats.“Indeed, we live in an era in which Asiais rising… the global economic pendulum swingsfrom west to east,” she went on.The leader highlighted her government’s majorreforms since coming to office in 2016.Source: Myanmar Timeshttps://www.mmtimes.com/news/state-counsellor-attempts-woo-foreign-investors.html

NewspapersMyanmar Times

29 Jan 2019

PwC | February 2019 13

Taiwan to help Myanmar build vertical industry in Textile and Garment production

Support from Taiwan, and mainland China, isbadly needed in Myanmar especially in buildingbackward linkagesMyanmar is counting on investors from Taiwan tosupport the country with capacity building andtechnical assistance – including in textile andgarment production – even as its beneficial tradeaccess to the European Union (EU) is underreview. Reflecting this, the Union of MyanmarFederation of Commerce and Industry (UMFCCI)and Taiwan’s Chinese National Federation ofIndustries have signed two memorandums ofunderstanding facilitating technology transfersand training programmes for workers,supervisors and technical staff at factories acrossthe country. The agreements were signed in mid-2018 and are now being implemented.At present, there are around 40 Taiwanese textileand clothing manufacturers in Myanmar, most ofwhich are large-scale, such as Tah Hsin Industrialand Wedtex.Observers say such support from Taiwan, andmainland China, is badly needed in Myanmar,especially in building backward linkages.

“Local textile production to supply exportinggarment factories only makes economic sense forvery large investments, which are – at leastcurrently – all Chinese firms with a few factoriesalready in the country,” says Matt van Roosmalen,an analyst with Emerging Markets Consultingwith a focus on the south-east Asian garmentsupply chain. “The government could also domore to incentivise local textile production, ascurrently all the tax incentives are skewedtowards importing production inputs rather thansourcing them locally. Therefore, foreign directinvestment will be absolutely necessary todevelop the textile industry; only they have therequired capital and expertise,” he adds. Theimportance of boosting sustainability throughupstream investment is likely to grow as exportshave become Myanmar’s second largest exportitem after natural gas exports.Source: Consult Myanmarhttps://consult-myanmar.com/2019/02/01/taiwan-to-help-myanmar-build-vertical-industry-in-textile-and-garment-production/

NewspapersConsult Myanmar

29 Jan 2019

PwC | February 2019 14

More projects to ensure sufficient water supply to Yangon : YCDC

To ensure water supply to the growing populationof Yangon, the Yangon City DevelopmentCommittee plans to consecutively implementmore projects until 2040, said U Myint Zaw Than,deputy section head, Department of Engineering(Water and Sanitation), under the YCDC.“The YCDC and the Japan InternationalCooperation Agency (JICA) are jointly drafting amaster plan to supply sufficient water to thepeople of Yangon. As the water reservoir project isno longer being implemented, the Kukkowa,Panhlaing, and Toe rivers are being earmrked forpotential new water resources. Through the newprojects, the YCDC aims to meet the waterdemand of 80 per cent of Yangon’s population in2040, when over 500 million gallons of water willbe daily distributed to 7.82 million people inYangon. The YCDC is currently managing toprovide 40 gallons per person on average,” said UMyint Zaw Than during an inspection at theLagonpyin water supply project.At present, the Lagonpyin and Kukkowa watersupply projects are being implemented in DagonMyothit (East) Township. The Lagonpyin project

started in 2013 and is slated to be completed in2022. Upon completion of the project, fourtownships of Dagon Myothit will be provided 40million gallons of water every day. The Kukkowaproject began last year and after it is finished, 60million gallons of water will be distributed daily.Currently, the YCDC supplies 205 million gallonsof water to Yangon households, with 14 milliongallons provided by the Hlawga reservoir, 27million gallons by Gyo Phyu, 54 million gallons byPhu Gyi, and 90 million gallons by the Nga MoeYeik dam under the Irrigation and WaterUtilization Management Department.Underground water is being supplied in DagonMyothit (south), Hlaingthaya, and Dala. Yangon’swater supply currently covers only 2.3 millionpeople. Therefore, the YCDC will continue watersupply projects, aiming to reach 7.82 millionpeople and cover 80 per cent of the population by2040.Source: Consult Myanmarhttps://consult-myanmar.com/2019/01/29/more-projects-to-ensure-sufficient-water-supply-to-yangon-ycdc/

NewspapersConsult Myanmar

29 Jan 2019

PwC | February 2019 15

Grab to launch shuttle bus services in Yangon this year

Southeast Asia’s technology company Grab willexpand its offerings in Myanmar by launching busservices in Yangon, as part of its 2019 plan toimprove user experience in the frontier country.‘GrabShuttle’ is among the four new ride-hailingservices that Grab plans to introduce in 2019,according to an announcement. The bus shuttleaims to facilitate connectivity to offices anduniversities. Grab is also launching options forbooking a cab through a call centre or onlineportal with its GrabCall and Grab Web Bookingoptions. It is also launching its service, Rent, thatallows users to book a car with a dedicated driver.“We will continue to innovate and evolve ourofferings to create a more efficient transportnetwork and improve the experiences of ourdriver partners and passengers,” said Alvin Loh,acting country manager, Grab Myanmar. AcrossSoutheast Asia, Grab announced hitting the markof facilitating 3 billion rides as of January 20,2019 across six countries. Grab claims that it sawa 300 per cent increase in overall daily bookingsand rides in Yangon in 2018 compared to 2017. Itlaunched GrabShare and GrabThoneBane, its

three-wheel bike service in Mandalay and Bagan,in 2018. In Myanmar, Grab competes with localbrands GetRide, Oway Ride and Ok Taxi acrossthe country. Meanwhile, FastGo, a ride-hailingbrand from Vietnam, is targeting to roll out itsservices across Myanmar.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/grab-to-launch-shuttle-bus-services-in-yangon-this-year-119086/

NewspapersDeal Street Asia

29 Jan 2019

PwC | February 2019 16

Dam project may go ahead, but scale or location could change

Negotiations are underway to change the size,scale or location of the Myitsone dam project inKachin State, U Thaung Tun, Minister ofInvestment and Foreign Economic Relations, toldthe media at the Myanmar Investment Summit inNay Pyi Taw. A special commission comprising ofsenior government officials has been formed toreview the Myitsone dam project and will releasea report on the matter. The Myitsone project doesnot involve just the dam but includes variousother projects. As such, officials are working on asolution, which could involve changing the size orlocation of the project to avoid adverse impact tolocal communities or the environment, U ThaungTun said. The project had been suspended duringU Thein Sein’s administration and is currentlystill under review by the government. FollowingChinese Ambassador to Myanmar Hong Liang’svisit to Kachin State in December, the Embassy ofthe Peoples Republic of China in Myanmar in aJanuary 13 statement said delaying the Myitsoneproject may affect the confidence of investors inMyanmar, adding that the project is crucial forgenerating power required in the China-Myanmar

Economic Corridor. “Both China and Myanmarare making efforts to find a suitable solution assoon as possible to the Myitsone project thatwould be acceptable to both sides. We expect thesupport of people in Kachin State inimplementing the project,” he was quoted assaying to the Kachin people and Kachin parties.In response, U Aung Khan, chair of Kachin StateDemocratic Party, said that “the Kachin andMyanmar people won’t allow the Myitsone projectto go ahead at all. The people have beenprotesting and it is just the government’s decisionto negotiate.” “No project can be allowed atMyitsone, which is owned not only by Kachinpeople but by all Myanmar people. If anythinghappens as a result of a dam constructed atMyitsone, it will have dangerous consequences.So, all must ensure that no dam is constructed onMay Kha and Malikha rivers which are thelifeblood of the Ayeyarwady River,”.Source: Myanmar Timeshttps://www.mmtimes.com/news/dam-project-may-go-ahead-scale-or-location-could-change.html

NewspapersMyanmar Times

30 Jan 2019

PwC | February 2019 17

Policy reforms depend on good implementation, UMFCCI says

Myanmar’s largest business lobby groupsuggested that the government should focus onimproving policy implementation and that furtherliberalisation is necessary for attractinginvestments.U Wai Phyo, vice president of the Union ofMyanmar Federation of Chambers of Commerceand Industry (UMFCCI), said that the countryneeds to open up for foreign investors and at thesame time support domestic players in the wakeof increasing competition.He was speaking at a press conference duringInvest Myanmar Summit 2019, the first officialinvestment conference organised by the NationalLeague for Democracy-led government. Thesummit was intended to bolster support forMyanmar’s economy and it provided a platformfor 10 states and regions to showcase theirinvestment opportunities.“Liberalisation is necessary for economic growth,”he commented, conceding that the country canonly attract investments and grow if the economyis more open for foreign capital.Local companies are generally wary of foreign

competition. For example, the Myanmar RetailersAssociation (MRA) insisted that there should befurther limits imposed on non-Myanmar firms tofend off foreign competition despite theconsiderable restrictions currently in place.Many sectors in Myanmar remain heavilyprotected. For example, the transport ministryrejected two airline joint venture proposals in thelast 14 months.International investors, both European and Asian,have grown increasingly frustrated with the NLD-led administration’s slow pace of reform andprotectionist policies. Around half of theEuropean firms in a recent survey conducted bythe European Chamber of Commerce in Myanmarsaid economic protectionism has had a negativeimpact on their operations. Japanese and Koreanbusiness groups have also called on theauthorities to relax investment restrictions.

Source: Myanmar Timeshttps://www.mmtimes.com/news/policy-reforms-depend-good-implementation-umfcci-says.html

NewspapersMyanmar Times

30 Jan 2019

PwC | February 2019 18

Two-lane road connecting Dawei SEZ to be built

YANGON-Myanmar will be constructing a roadthat connects Dawei Special Economic Zone(SEZ) and the border area with Thailand, says DrThan Myint, Commerce Minister and Chairman ofthe Task Force on SEZ construction.“Myanmar is now discussing about constructionof road to Dawei SEZ with Thailand. We haveconducted the survey for construction.Construction tasks for road will be start soon,”said Dr Than Myint.A tripartite discussion with Myanmar, Thailandand Japan will be held in Myanmar regarding theDawei Special Economic Zone.“There was the original plan. Japan hadsubmitted the suggestion. We are going to makeadjustment after discussion at the tripartite meet.Japan had drawn the plan and then we are goingto discuss with Thailand. We want t the originalplan because it was drawn since 12 or 13 yearsago. At present, the ground condition hadchanged. The Italian-Thai Company also can’twork. So, we are going to carry out the phasesafter discussing with Myanmar, Thai andJapan.Myanmar will form Joint Committee in the

near future,” said Dr Than Myint.As Thai government offers a reasonable loan toMyanmar for the construction a two-lane roadfrom the Thai border area to the Dawei SEZ, animportant first phase of the Dawei SEZ, the SEZManagement Committee had agreed to take outthe loan from Thailand.The Construction Ministry had carried out surveyof the road axis together with the ThaiDepartment of Highways.The Information Ministry announced a statementsaying that the construction of the road wouldbring benefits for the implementation of DaweiSEZ and would also create job opportunities forthe locals. Myanmar Special Economic ZoneCentral Committee formed Dawei SEZManagement Committee on October 12th in 2016involving with 12 members from relevantministries and foreign experts and Dr Tun Naing,Deputy Minister of Electricity and Energy acted asthe chair of Management Committee.Source: Eleven Myanmarhttps://elevenmyanmar.com/news/two-lane-road-connecting-dawei-sez-to-be-built

NewspapersEleven Myanmar

31 Jan 2019

PwC | February 2019 19

Massive township development set to proceed

The massive New Mandalay Resort City (NMRC)integrated township project is set to moveforward on a 4000 hectare site off the Mandalay-Lashio highway in Mandalay Region’s Pyin OoLwin district.According to the Ministry of Construction,threedevelopers will cooperate on the project that willsee urban and infrastructure consulting firmSurbana Jurong International Consultants Co Ltdserving as the overall consultants for thedevelopment.Surbana Jurong has previously worked on theiLand Industrial Park in Bago Region, Polo ClubResidence in Yangon, the Ayeyarwun and Yadanahousing projects in Dagon Seikkan, YangonAquarium as well as Golden Valley Residences.The feasibility study for the Mandalay projectwhich took about seven months was carried outunder the supervision of the Ministry ofConstruction, said Minister of Construction UHan Zaw. Khin Myanmar Development Co Ltd,Central Irrawaddy Development Co Ltd, andShwe Taung Development Co Ltd will be the threedevelopers working on the project.

As the project falls under the MyanmarSustainable Development Plan, other governmentministries will be involved in the setting ofpolicies to ensure the project’s success, which isexpected to bring benefits to the region, thecountry, investors and ordinary people, said UHan Zaw. This project is divided into threesections. Sections 1 and 3, covering 2800hectares, will be implemented at the union level,while Section 2, with 1200 hectares, will fallunder the purview of the regional government,according to the Ministry of Construction.Section 1 of the project will feature zones forindustry, residential living, education and healthservices.Section 2 will feature residential land, and mixed-development, administrative, economic,agriculture, and industrial zones.Section 3 will feature luxury and affordablehousing, a golf course, and an agriculture zonewith an agricultural park.Source: Myanmar Timeshttps://www.mmtimes.com/news/massive-township-development-set-proceed.html

NewspapersMyanmar Times

31 Jan 2019

PwC | February 2019 20

Government’s Message to Investors: Myanmar Open for Business

NAYPYITAW—Myanmar held its first-everinternational investment summit late last monthin Naypyitaw. The two-day event showcased 120projects worth US$3 billion (about 4.5 trillionkyats) in 10 states and regions.On the second day of the event, Investment andForeign Economic Relations Minister U ThaungTun hosted a dialogue for international guests,offering them reasons why they should invest inSoutheast Asia’s “Final Best Frontier.” Thegovernment is looking for ways to revive theeconomy, which has been sluggish for more thantwo years.“Myanmar is now open for businesses. We aremaking the necessary changes,” U Thaung Tunsaid.A weakening currency, high inflation, armedconflict, unstable policies and the slow pace ofreform have chipped away at growth under thecurrent administration, which had hoped theeconomy would take wing after more than fivedecades of isolation under military rule.Under the government’s “Look East” policy,officials have toured Asia beating the drum for the

country’s economy. The summit was part of thisattempt to raise investment from East Asiancountries. More than 1,600 local and foreigndelegates from 17 countries attended the summitand 40 companies exhibited. The top countrieswere China, Japan, Singapore and Thailand.Here are four takeaways from the minister’sconversation with investors.Major ReformsU Thaung Tun listed some of the major reformsundertaken by the government so far—such asrevision of the legal framework, removingprocedural bottlenecks and launching onlinecompany registration—with the aim of makingMyanmar a more attractive FDI destination.He challenged the World Bank’s ease of doingbusiness index for 2019, on which Myanmarshowed no progress, retaining the No. 171 spot itheld last year.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/governments-message-investors-myanmar-open-business.html

NewspapersThe Irrawaddy

01 Feb 2019

PwC | February 2019 21

Survey starts for major railway project

China Railway Eryuan Engineering Corporation(CREEC) has started a partial survey for theMuse-Mandalay-Kyaukphyu railway line, part ofthe China –Myanmar Economic Corridor (CMEC)and the larger Belt and Road Initiative (BRI).Myanmar signed a memorandum ofunderstanding (MOU) for the project, expected tobe one of the largest road and railway projects inthe country, last October.The project calls for the building of a high-speedrailway line from Kunming, China, to Muse on theMyanmar-China border and from there toMandalay and terminating in Kyaukphyu inRakhine. The survey project Muse to Mandalaythe 430km line is expected to support trainstravelling at up to 160kmh and will feature sevencargo stations and five passenger stations.China is said to view the project to connect theKyaukphyu Special Economic Zone anddeepwater port in Myanmar as something thatwill benefit both countries under the larger CMECumbrella,.“CREEC, at their cost, has started a ground surveyfor the project and wants to proceed with the

construction, but Myanmar hasn’t given anycommitment beyond signing the MOU,” UHtaung Shan Khan, general manager of planningand administration of Myanmar Railways toldThe Myanmar Times.“They want to construct the railway and runtrains, but we have to consider Myanmar’s owninterests and policies and the surveying for theproject in Mandalay has been allowed,” he said.However, former Thibaw MP U Ye Tun, whosetownship is located along the projected route ofthe railway, says the survey should be conductedfor the entire route instead of just from Muse toMandalay.“It would be wrong if just a portion of the projectof the project’s route is surveyed. The surveyshould be all the way to Kyaukphyu. If not, theKyaukphyu deepwater port may not be as viableas expected,” U Ye Tun said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/survey-starts-major-railway-project.html-0

NewspapersMyanmar Times

01 Feb 2019

PwC | February 2019

2. Weekly Key Policy News

22

PwC | February 2019

Weekly Key Policy NewsHeadlines

UNICEF Boss Urges Myanmar to Enact Kofi Annan’s Recommendations on Rohingya Crisis

NLD Makes First Official Move to Amend Constitution

CBM permits border trades in yen and yuan denominations

23

Joint problem-solving is key to peace

CBM allows 35pc foreign stakes in local banks

PwC | February 2019 24

UNICEF Boss Urges Myanmar to Enact Kofi Annan’s Recommendations on Rohingya Crisis

YANGON — The head of the U.N. children’s fundurged Myanmar on Monday to implement therecommendations of a panel on the Rohingyacrisis led by former U.N. head Kofi Annan, sayingit had yet to create conditions right for the returnof refugees from Bangladesh.Speaking at a forum in the capital, Naypyitaw,UNICEF Executive Director Henrietta Fore saidchildren from the Rohingya Muslim minority, apersecuted and mostly stateless community fromBuddhist-majority Myanmar, were living “aprecarious and an almost hopeless existence” incamps in neighboring Bangladesh.About 730,000 Rohingya have fled Rakhine State,in western Myanmar, since a military crackdownin 2017 after Rohingya insurgents attackedsecurity posts, U.N. agencies estimate. Tens ofthousands remain behind in Rakhine, where theyare subjected to restrictions on movement andhave limited access to healthcare and education.Fore said Myanmar’s “commitment” to enactingthe recommendations of Annan’s committee —which include ensuring freedom of movement andaccess to education — would help mend the lives

of suffering children.“We urge the government to seize this momentand translate this potential into reality for allchildren,” she said on the first visit by a UNICEFhead in decades. “Taking these steps will also go along way towards creating the right conditions forthe return of refugees from Bangladesh.”The Annan commission was created by Myanmarleader Daw Aung San Suu Kyi in 2016 to findlong-term solutions to deep-seated ethnic andreligious divisions in Rakhine.But implementation of its recommendations hasbeen beset by crises and setbacks.A day after the panel issued its report in August2017, Rohingya insurgents launched attacks onsecurity forces, provoking a military crackdownthe U.N. investigators described as “ethniccleansing” with “genocidal intent.” Myanmardenies the charge.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/unicef-boss-urges-myanmar-enact-kofi-annans-recommendations-rohingya-crisis.html

NewspapersThe Irrawaddy

29 Jan 2019

PwC | February 2019 25

NLD Makes First Official Move to Amend Constitution

YANGON—Myanmar’s ruling National League forDemocracy will submit an urgent proposal toform a joint parliamentary committee to work onamending the country’s military-draftedConstitution, the Parliament Speaker announcedon Tuesday. It is the NLD’s first official attempt tochange the charter since the party came to powera little more than two years ago.Drafted in 2008 by the then-ruling military junta,the Constitution has been widely criticized asundemocratic. It reserves 25 percent of the seatsin the Union Parliament for unelected militaryrepresentatives.Union Parliament Speaker U T Khun Myatannounced Tuesday that a proposal to form thecommittee would be submitted to Parliament byNLD lawmaker U Aung Kyi Nyunt in theafternoon.“The proposal urges the Union Parliament toform a joint committee comprising suitablelawmakers … to facilitate attempts to amend theConstitution as soon as possible,” said theSpeaker, who read the proposal out in Parliament.Lawmakers were set to discuss the proposal on

Tuesday afternoon.The announcement drew immediate objectionsfrom military representatives, who questioned theproposal’s legality. They claimed any move toamend the Constitution requires a draft signed byat least 20 lawmakers.“We have no idea what will be changed or how, asthe Speaker [just] said that a joint committee willbe formed,” Brigadier-General Maung Maung saidin Parliament.The Speaker responded that he was merelyinforming the Parliament of the proposal.“You can discuss it when the proposal is openedto debate. The Parliament is a multipartyinstitution, so now we are just calling forparticipation from party lawmakers as a matter oftransparency,” he said.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/nld-makes-first-official-move-amend-constitution.html

NewspapersThe Irrawaddy

29 Jan 2019

PwC | February 2019 26

CBM permits border trades in yen and yuan denominations

The Central Bank of Myanmar (CBM) officiallyintroduced Japanese yen and Chinese yuan assettlement options for banks in cross borderpayments and transfers. With the aim offacilitating border trade, the CBM’s January 30directive permits banks with Authorised Dealerlicenses for foreign exchange to open yen andyuan accounts and settle trades in thosecurrencies. However, opening personal accountsor legal entities in the two foreign currencies arenot permitted."The objective is for easy settlement whenconducting border trades. Local banks can alsomake transfers among themselves,” said U PeMyint, senior adviser to CB Bank.He added that “as China and Japan are strongeconomies, opening personal accounts in yen andyuan should also have been allowed. However, Ithink the CBM will allow this in future.”

Source: Myanmar Timeshttps://www.mmtimes.com/news/cbm-permits-border-trades-yen-and-yuan-denominations.html

NewspapersMyanmar Times

30 Jan 2019

PwC | February 2019 27

Joint problem-solving is key to peace

The signing of the Nationwide CeasefireAgreement (NCA) in 2015 changed the structureand nature of the peace process to a large extent.While talks with the armed ethnic groupscontinue, whether or not they have signed anagreement, the NCA set the peace process inmotion toward a political and military solution.Unlike the bilateral ceasefires, the NCA creatednew institutions that were to be jointly formedand run. The NCA stipulated the formation of theinstitutions to foster joint problem-solving andbring about joint or collective solutions to end thearmed conflict in Myanmar.Essentially, it is a frank acknowledgement by thegovernment and Tatmadaw (military) thatMyanmar’s problems can only be solved throughjoint problem-solving mechanisms with theethnic armed organisations (EAOs).Under the NCA, Myanmar boasts four main jointinstitutions or meetings to deal with dialogue,ceasefire issues and potential deadlocks at thenational level:The Joint Ceasefire Monitoring Committee (JMC)is for ceasefire monitoring, verification and

conflict resolution. Its main objective is tomaintain and strengthen ceasefires to help thenegotiation process. It has a secretariat and some130 committee members, representing thegovernment, the Tatmadaw, armed ethnic groups,and civilians. Most critically, the JMC has jointlydeveloped 18 Standard Operating Procedures andTerms of Reference.The Union Peace Dialogue Joint Committee is fornegotiations. Its structure is slightly differentfrom that of the JMC as it includesrepresentatives of political parties, as stipulatedby the NCA. Since the NLD came to power, therule on political party participation has changed.Previously, all political parties chose collectiverepresentation; now only those who won at leastone seat in the election are allowed to take part inthe negotiations. The framework for politicaldialogue that governs the mechanics of thenegotiations was jointly developed even beforethe NCA was signed.Source: Myanmar Timeshttps://www.mmtimes.com/news/joint-problem-solving-key-peace.html

NewspapersMyanmar Times

01 Feb 2019

PwC | February 2019 28

CBM allows 35pc foreign stakes in local banks

The Central Bank of Myanmar (CBM), inRegulation No 1/2019 issued January 29, hasformally allowed foreign equity ownership of upto 35 percent in licensed banking institutions inMyanmar.This implements the provisions of the CompaniesLaw that came into force on August 1, 2018, underwhich the country now permits up to 35pc foreignequity ownership in Myanmar-registeredcompanies without them changing in their nature.Still, investors are required to seek approval fromthe CBM by submitting the relevant investment orjoint venture agreement and other supportingdocuments. This step is consistent with theprovisions of the Financial Institutions Law ofMyanmar.

Source: Myanmar Timeshttps://www.mmtimes.com/news/cbm-allows-35pc-foreign-stakes-local-banks.html

NewspapersMyanmar Times

02 Feb 2019

PwC | February 2019

3. Weekly Investment News

29

PwC | February 2019

Weekly Key Investment NewsHeadlines

City Mart and Sandanila Investments launch City Invest Fund

Myanmar Institute of Business acquired by financial adviser

Govt eyes US$200 billion in investments over next 20 years

30

Govt announces ‘project bank’ to get Myanmar building

Lotte buys 80 per cent L & M Mayson shares

PwC | February 2019 31

City Mart and Sandanila Investments launch City Invest Fund

City Mart Holding Co Ltd (CMHL) in conjunctionwith Sandanila Investments will be launching theCity Invest Fund, which will be an investor andpartner to small and medium-sized enterprise(SME) food manufacturers.The primary motivation for the fund is to helpincrease the quality, quantity, and proportion ofproducts made in Myanmar in modern retail.Many business leaders agree that SMEs need tobe further developed in order for a country toprogress. Nowadays, there are many economygroups helping SME manufacturers. Being thebenchmark of excellence for responsible businesspractices and a leading contributor in helping thegovernment create economic value, CMHL willsupport this effort by way of launching the CityInvest Fund.“The City Invest Fund will provide financing andalong with this funding we aim to providetechnical assistance, capacity building, marketingstrategy for wider market access and training toimprove production quality and standards. Weare inviting manufacturers with a strong desire toimprove their products and processes to partner

with us,” said Daw Htet Htet Khaing, BusinessDevelopment Manager of CMHL.The advisory board of the fund will be led byCMHL CEO Daw Win Win Tint. Fundinvestments and operations will be led bySandanila Managing Partner, Daw Thiri ThantMon, who will also serve as the ManagingDirector of City Invest Fund.Sandanila is a business group based in Myanmarthat is a partner and catalyst for internationalinvestment capital entering the Myanmarbusiness economy. Sandanila invests its owncapital and that of its partners into interestingopportunities where it sees potential for the longterm creation of value through dividends andcapital appreciation.Daw Htet Htet Khine will lead the liaison betweenCMHL and City Invest Fund.

Source: Myanmar Timeshttps://www.mmtimes.com/news/city-mart-and-sandanila-investments-launch-city-invest-fund.html

NewspapersMyanmar Times

28 Jan 2019

PwC | February 2019 32

Myanmar Institute of Business acquired by financial adviser

Yangon financial adviser Trust Venture Partners(TVP) has acquired the Myanmar Institute ofBusiness (MIB), an education and trainingprovider for professionals in financial services, foran undisclosed amount.Demand for financial talent has spiked over thepast four years, since foreign banks werepermitted to open offices in Myanmar in 2015 andthe bond market was first launched in 2016.That demand is expected to continue rising, nowthat foreign banks and insurance providers areallowed to operate in the country.Yet, there remains a lack of financial talent inMyanmar, given that it takes time to set uprequired institutions, draft curricula, find trainersand then have students graduate from theprogrammes, TVP CEO Shinsuke Goto said in astatement last Friday. “Every company we talk tois struggling to find suitable executive personnel,especially for finance positions,” he said.While top management is often recruited fromabroad, expat compensation is generally too highfor middle management positions. As such,finding the right candidates remains one of the

biggest operative obstacles for many foreigncompanies.TVP’s acquisition of MIB will not only give itaccess to the best financial talent as they becomeavailable, it will also enable the firm to nurtureand build talent that can be deployed across theeconomy.Set up in May 2015, MIB targets professionals infinancial services and related industries. ItsFinance, Leadership and Entrepreneurshiptraining, Master in Finance and CorporateFinance Diploma programmes are the highestranked in Myanmar. MIB also trains the largestnumber of chartered financial accountants in thecountry.TVP will also introduce MIB to local and foreignemployers, who will help establish newprofessional programmes, such as Securities orTreasury. This will allow professionals to developtheir skills to match international standards.Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-institute-business-acquired-financial-adviser.html

NewspapersMyanmar Times

29 Jan 2019

PwC | February 2019 33

Govt eyes US$200 billion in investments over next 20 years

The government reiterated its target of attractingmore than US$200 billion in investment over thenext 20 years, said State Counsellor Daw AungSan Suu Kyi. The effort will be carried outaccording to the Myanmar Investment PromotionPlan (MIPP), the state counsellor said at theInvest Myanmar Summit 2019 in Nay Pyi Taw onMonday. “Under the MIPP, the investment targetwill be more than US$200 billion for localbusiness sectors. We will transform Myanmarfrom a low-income country to middle-incomecountry,” Daw Aung San Suu Kyi said. Whileoverall foreign investment in Asia-Pacific declinedslightly last year, the region received the mostforeign investment in 2017 and Myanmar saw45pc growth in foreign investment that year, shesaid. At the summit, the 10 chief ministers exceptfor the ministers from Bago, Magwe, Kachin andKayah presented briefings about investmentopportunities in their respective states. AsMyanmar still has opportunities for economicdevelopment in numerous sectors, and needs agood economic environment, that vision ispossible, said Union of Myanmar Federation of

Chambers of Commerce and Industry VicePresident U Aung Kyi Soe. “Efforts are beingmade to make areas such as infrastructure, realestate, the garment industry, manufacturing,tourism, and ports to make the country moreattractive to investors,” said U Aung Kyi Soe. “Asvarious sectors of the country’s economy are ripefor development, there isn’t any reason that wecan’t meet US$200 billion investment target in 20years,” said U Aung Kyi Soe. To improve strategicplanning and conditions to attract foreigninvestors, a project bank has been implemened bythe Ministry of Planning and Finance and theMinistry of Foreign Economic Relations, said DawAung San Suu Kyi. The effort will see attempts tooptimise conditions for investors utilisingavailable options like the national budget,development assistance, and private investment,to attract participation in projects prioritised bythe government.Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-eyes-us200-billion-investments-over-next-20-years.html

NewspapersMyanmar Times

30 Jan 2019

PwC | February 2019 34

Govt announces ‘project bank’ to get Myanmar building

The government has announced the launch of anonline “project bank” which will change the wayinfrastructure programmes are planned,determined and funded. Speaking at the InvestMyanmar Summit in the capital city, deputyfinance minister U Set Aung said the project bankwill contain priority infrastructure initiativeswhich have been screened and approved by NayPyi Taw. The centralised and publicly-accessibledatabase will enable the government tocoordinate ministries and departments andprioritise proposals which are in line with theMyanmar Sustainable Development Plan(MSDP). In other words, the project bankprovides a mechanism to implement MSDP’s 251strategic action plans. The online database shouldinclude technical specifications, type of projectcontracts and other essential details for investorsto readily access the information and makeinformed decisions about, according to Jacobusdu Plessis, an energy and infrastructure expertfrom law firm DFDL. The initiative aims to alignprojects with the development objectives of lineministries, and will provide a new framework for

public-private partnerships and enable theprivate sector to invest in state assets. “The maingoal is to bring an element of consistency andplanning to the projects as opposed to havingthem randomly suggested by businesses in theform of unsolicited proposals,” Mr du Plessisadded In her speech to an audience ofinternational investors on Monday, Daw AungSan Suu Kyi emphasised the need for socially andenvironmentally sound investments. “We only askour investors to ensure that their investments areresponsible, by incorporating environmental,social and governance factors into theirinvestment and business undertakings,” shehighlighted. For that to happen, projects shouldcome “pre-screened” by the DICA, EnvironmentalConservation Department and the relevantministry to identify whether or not they are in ornear protected areas or ones which are sensitivefor environmental social or conflict reasons.Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-announces-project-bank-get-myanmar-building.html

NewspapersMyanmar Times

31 Jan 2019

PwC | February 2019 35

Lotte buys 80 per cent L & M Mayson shares

South Korea based Lotte has bought 80 per centstake worth US$69.2 million from L & M Maysonand the ceremony to mark the stake selling washeld at Lotte Hotel in Yangon on January 30.The Lotte Confectionery entered the food industryof Myanmar by acquiring L & M Mayson, whichowned the lion’s share of the food market.L & M Mayson was founded in 1996 and producedbread, cake and biscuits. It has three factories, 12branches, ten distribution departments and salesnetworks.The Lotte Confectionery was established in 2013and is doing joint-venture businesses with othercompanies.The Lotte Confectionery is a subsidiary companyof Lotte Conglomerate and they madeinvestments in international companies includingGuylian, a Belgium chocolate manufacturer andHavmor, an Indian based ice creammanufacturer.The owner of L & M Mayson is Kyi Soe and he iswell-known in business community. He ownedstakes in many companies. The main product ofthe company is Good Morning bread and other

brands are Garden, Morning Sun, Smile, Monte,Amico, Fresko, Voila and Bonjour.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/lotte-buys-80-per-cent-l-m-mayson-shares

NewspapersEleven Myanmar

01 Feb 2019

PwC | February 2019

3. Weekly New Tenders

36

PwC | February 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/ .

37

MOTC: Invitation for Prequalification and Bid, Myanma Railway (Yangon-Mandalay Railway Improvement Project Phase I). Closing Date: 12 March 2019

PwC | February 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

38

ADB: TA-8785 REG: Mekong Business Initiative - 234 Financial Inclusion Expert (48270-001). Closing Date: 06 Feb 2019 (Individual)

ADB: Southeast Asia Agriculture, Natural Resources and Rural Development Facility (50266-001). Closing Date: 04 Feb 2019 (Individual)

ADB: Mekong Business Initiative - 235 Project Manager Economic Governance (48270-001). Closing Date: 08 Feb 2019 (Individual)

ADB: Myanmar Resident Mission Staff Consultant.Closing Date: 07 Feb 2019 (Individual)

PwC | February 2019

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

39

ADB: Support for Strengthening Business Climate - Experts in Capital Markets (International law firm) (50173-001). Closing Date: 15 Feb 2019

PwC | February 2019

4. MIC Permitted Projects

40

PwC | February 2019

MIC Permitted Projects (Meeting 1, 2019)

41

No. Name of Company Type of Investment Form of Investment

1 Myanmar C.P Livestock Co., LtdProcessing of chicken, pork and preserving and sales of meat

Wholly Foreign Owned

2 Wilmar Myanmar Riceland LimitedProduction, sales and distribution of rice and rice related products (broken rice, rice flour, rice bran, rice bran oil, rice husk)

Joint Venture

3 Myanmar Golden Southwest Group Co., LtdManufacturing and marketing of animal feed

Joint Venture

4 Myanmar Golden Southwest Group Co., LtdManufacturing and marketing of day old chick (DOC)

Joint Venture

5 Xin Mei Manufacturing (Myanmar) Co., Ltd Manufacturing of garment on CMP basis Wholly Foreign Owned

6 Yoma Micro Power Myanmar Limited

To provide off-grid telecom towers and rural villages, grid-quality electricity through solar powered micro power plants and mini-grids

Wholly Foreign Owned

7 CECA Gold Co., LtdImportation, storage, distribution and sales of LPG by using pipeline jetty

Joint Venture

Source: DICA

PwC | February 2019

5. Upcoming Events

42

PwC | February 2019

Upcoming Events (February 2019) List

Date Location Name of Event Sector Price Focus Points

26 Feb 2019 YangonAVPN Myanmar Social Investment Summit 2019

Conference USD 25

“AVPN Myanmar Social Investment Forumwill bring together a diverse group of fundersand resource providers from Myanmar andthe Asian region to discuss collaborative andoutcome-focused social investmentstrategies and opportunities.”

26-27 Feb 2019 YangonMobile Money & Financial Inclusion Summit

Banking and Finance

Free“A Special Focus on Myanmar plus EmergingOpportunities from the regional DigitalTransformation”

43

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

© 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:

Jovi SeetSenior Executive Directorjovi.seet@sg.pwc.com

Brandon LyeDirectorbrandon.ys.lye@sg.pwc.com

44