April 3-9, 2014

Myanmar Business Today

mmbiztoday.com
mmbiztoday.com April 3-9, 2014 | Vol 2, Issue 14 MYANMARS FIRST BILINGUAL BUSINESS JOURNAL
Myanmar Summary
Myanmar Summary
Contd. P 9...(OBshore) Contd. P 9...(OBshore)
Myunmur oles Oot OHshore
Blocks to 13 Multinationals
I
nternational oil gi-
ants including Chev-
ron, Royal Dutch
Shell, ConocoPhillips
and Total have won bids
Ior osIore oII und gus
expIoruLIon bIocks o
Myanmars western and
southern coasts, accord-
ing to the Ministry of En-
ergy (MOE).
Myanmar awarded 10
shallow water blocks and
10 deepwater blocks in
the Gulf of Martaban and
TunInLIuryI, o LIe wesL-
ern state of Rakhine, to 13
oil companies in an auc-
tion process that began
last year, according to a
posting on the ministrys
website last week.
Winners of deepwa-
ter blocks will be able to
explore and operate the
blocks on their own, while
shallow water winners
will need to work with a
registered local partner,
according to the terms of
the production sharing
contracts.
The ministry said pro-
duction-sharing contracts
would be awarded after it
verIhes LIe wInnIng bId-
Pann Nu ders terms and condi-
tions.
Considering the win-
ning bidders include
some household name
international oil compa-
nies and prominent in-
dependents, this bodes
well for the future of oil
and gas in Myanmar and
will help to lift the overall
standards of the greater
investment environment
in the country, Nomita
Nair, partner at UK-based
Iuw hrm BerwIn eIgILon
Paisner (BLP) and part of
the team leading BLPs
Myanmar Practice, told
Myanmar Business To-
day in an email.
Multinational oil com-
panies such as Dutch
Shell, Frances Total
E&P, Norwegian Statoil
and ConocoPhillips won
deepwater blocks, Ameri-
can supermajor Chevron
a shallow water block
and Australias Woodside
Energy won both shallow
and deepwater blocks.
Other major oil compa-
nies among the winning
bidders included Italys
Eni and Indias Reliance
Industries and Oil India.
Results of the tender,
which the energy ministry
had indicated would be
released late December or
early January, came out
on Wednesday last week.
The delay was reportedly
caused because of the
high volume of bids.
The government had to
hrsL hnuIIse LIe onsIore
bids which was also a
lengthy process. The min-
istries have only limited
resources and so to do a
thorough and full analy-
PTTEPI Starts Zawtika
Gas Delivery
T
hai oil and gas giant PTTEP International (PT-
TEP) Ld Ius sLurLed deIIverIng LIe hrsL nuLuruI
gus Irom Myunmur`s ZuwLIku gus heId, LIe hrm`s
Yangon branch said.
TIe hrsL deIIvery wus mude Lo Myunmu OII und Gus
Enterprise (MOGE) last month.
The starting delivery rate is 50 million standard cubic
feet per day and will increase the rate up to 100 million
standard cubic feet per day by this month to meet the
domestic growing energy demand as well as to support
the economic development in Myanmar, PTTEPI said
in a statement.
In 2007, PTTEPI discovered natural gas in block M9
and a partial of block M11 which was named Zawtika
project. Zawtika project is located in Gulf of Mottama,
approximately 300 kilometres south from Yangon. Lat-
er in 2008, PTTEPI conducted the development plan of
Zawtika project.
PTTEPI Ltd, which is a subsidiary of PTTEP, holds 80
percent share of Zawtika project while Myanma Oil and
Gas Enterprise (MOGE) holds the rest. In addition to
Zawtika Project, PTTEPI is the operator in PSC onshore
bIocks: PSC G und EPz und osIore bIocks: M, M11,
MD-7 and MD-8. PTTEPI started its business in My-
anmar in 1996 through non-operating partnerships in
Yadana and Yetagun Projects.
Kyaw Min
Chevron Royal Dutch
Shell ConocoPhillips .
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April 3-9, 2014
Myanmar Business Today
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2
LOCAL BIZ
MYANMARS FIRST BILINGUAL BUSINESS JOURNAL
Board of Editors
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DTP
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Translators
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Business News in Brief
J apan agr ees to i nvest i n Dawei SEZ
Japan has agreed to invest in the Dawei Special Eco-
nomIc Zone (SEZ) In souLIern Myunmur, suId un om -
cial accompanying Japanese Foreign Minister Fumio
Koshida who is on a visit to Myanmar, according to lo-
cuI medIu reporLs. TIe om cIuI suId KosIIdu ugreed Lo
invest in Dawei SEZ during his meeting with his Myan-
mar counterpart Wunna Maung Lwin in Nay Pyi Taw.
Japan initially agreed to construct the road linking Da-
wei SEZ and Thailand and feasibility studies would be
conducted soon for this.
I FC to lend Shangr i -La Asi a $80m for Myan-
mar pr oj ects
International Financial Corp (IFC) will lend $80 mil-
lion to Shangri-La Asia Ltd for the expansion of the
Traders Hotel and the construction of the Shangri-La
Residences in Yangon, local media reported, citing
Vikram Kumar, resident representative of the IFC in
Myanmar. Shangri-La Asia has been facing acute short-
age of hotel rooms due to a steep rise in tourist arrivals
in Myanmar. The 270-roomed Traders will have 485
rooms on completion of the expansion project, while
the Shangri-La Residences will have 240 rooms.
Yatanar pon Telepor t looks for J V par tner as
talks wi th Tr ue fai l
Myanmars Yatanarpon Teleport (YTP) is looking for
a joint-venture partner for a telecommunication opera-
tion after its talks with Thai-based True Corp failed at
the last minute, local media reported YTP senior direc-
tor Yan Win as saying. Yan Win said YTP had already
been working on telecom infrastructure projects in
cooperation with existing licensed operators while it
planned to get an operator license for itself.
Myanmar par li ament speaker , opposi ti on
leader agr ee on consti tuti on amendment
Myanmar parliament speaker and chairman of the
ruling party, the Union Solidarity and Development
Party (USDP), Thura U Shwe Mann and opposition
leader Aung San Suu Kyi agreed last week on the need
for amending the 2008 constitution. The move is neces-
sary for rule of law and eternal peace, both the leaders
said at a joint press conference in Nay Pyi Taw follow-
ing the end of the 9
th
parliament session. Both USDP
and NLD said the parties will run in the upcoming by-
election in all 30 vacant constituencies. The by-election
is expected to be held before the end of this year.
Myanmar , S Kor ea to pr omote cooper ati on i n
envi r onmental conser vati on
Myanmar and South Korea vow to promote coopera-
tion in environmental conservation and forestry sec-
tors, state media reported. The pledge was made during
a meeting between Myanmar Minister of Environmen-
tal Conservation and Forestry U Win Tun and South
Korean Ambassador Lee Baek Soon in Nay Pyi Taw.
The pair agreed to a future plan of opening forest school
in Myanmar and enhancing bilateral cooperation in
carbon dioxide emission reducing activities and to pro-
mote human resources and research development.
Suu Kyi blames govts i r r esponsi bi li ty for Chi -
nese pr i vi leges
Major opposition the National League for Democracy
(NLD) party leader Aung San Suu Kyi has said Chinese
companies were enjoying special privileges in Myan-
mar because of the governments irresponsibility, local
media reported. It was important for Myanmar to have
a responsible and duty-conscience government, which
will serve national interests well so that the country
would not become just like a colony of any foreign
country, Suu Kyi said at a meeting with writers from
upper Myanmar in Pyin Oo Lwin.
Myanmar Summary
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
3
LOCAL BIZ
Investing in Myanmar: The Pitfalls to Consider
Josh Wood
M
yanmar is in
the midst of a
foreign invest-
ment boom. Over the last
12 months it has received
over $3.6 billion in Foreign
Direct Investment (FDI),
an increase of nearly 300
percent according to gov-
ernmenL hgures reIeused
in February. Despite this
encouraging news, enor-
mous barriers to future
investment remain, and if
reforms are not quickly en-
acted, foreign capital may
Luke IgIL us quIckIy us IL
has arrived.
After decades of isola-
tion and under-invest-
menL, new D ows
from across the globe are
nurturing industrial mod-
ernisation in Myanmar.
Of the $3.6 billion in-
vested last year, about 50
percent was directed into
manufacturing enterpris-
es such as garment mak-
ing, automobile assembly
and food processing fac-
tories. These investments
in manufacturing are par-
ticularly welcome because
LIey oer numerous em-
ployment opportunities,
have high export potential
and create positive spillo-
vers into other sectors of
the economy. While Chi-
na and Thailand remain
the dominant sources of
foreign investment, new
contributions from Qatar,
Korea, Norway and many
other countries have driv-
en the recent growth.
The sustainability of
such high rates of foreign
investment, however, is
far from assured. A large
component of last years
FDI resulted from the
belated arrival of global
brands such as Unile-
ver, Coca Cola and Visa,
amongst many others,
and the front loaded in-
vestment of Telenor and
Ooredoo in the recently
liberalised telecommu-
nications sector. Both of
these streams can be ex-
pected to fall away quickly
in the next 2-3 years and
a second wave of FDI will
need Lo IoIIow LIe hrsL-
movers. Based upon anec-
dotal reports coming out
of Yangon, this may take
some serious salesman-
ship. New entrants are
encountering unexpected
hurdles in many aspects
of their business opera-
tions which is tempering
the appetite for future
expansion and sending
mixed messages to poten-
tial investors back home.
So what are the major
impediments to doing
business in Myanmar?
Unsurprisingly, weak
infrastructure is the prob-
lem most commonly cit-
ed by foreign managers.
The crumbling highway
neLwork, Inem cIenL ruII
connections and poorly
maintained port facilities
are causing lengthy de-
Iuys und InuLIng Lruns-
port costs. Limited phone
coverage, painfully slow
internet and inner-city
congestion complicates
communication and plant
monitoring. The electri-
cal grid, after decades of
neglect and under-invest-
ment, is unable to handle
growing demand. Not
only is 70 percent of the
population without pow-
er, but those with access
face the perennial threat
of blackouts. For foreign
investors, particularly
those involved in manu-
facturing, nothing is more
essential than a cheap and
reliable electricity supply.
A second major issue
is corruption, which not
only pervades the upper
echelons of government,
but is also ubiquitous at
the township level. Ba-
sic administrative tasks
such as negotiating rental
leases, registering vehi-
cles and many other low-
level interactions with
the bureaucracy require
considerable sums of tea
money. Such practices
InuLe cosLs und reduce
opportunities for foreign
hrms, und remuIn un In-
surmountable barrier for
more scrupulous corpo-
rations who resist the use
of bribery in their day-to-
day operations.
A less reported issue
is the severe shortage of
skilled labour. Myanmars
poorly performing edu-
cation system has failed
to produce the number
of engineers, welders,
carpenters and other
tradespeople required by
IoreIgn hrms. TIe skIIIs
shortage is particularly
acute in the oil and gas
industry where English
prohcIency Is oILen re-
quired. In many instances
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Myanmar Summary
skilled workers have been
brought in from the host
country, sourced from
neighbouring provinces
or headhunted from rival
hrms; uII oI wIIcI cuuse
considerable cost and in-
convenience.
TIe hnuI burrIer Lo Ior-
eign investment is Myan-
mur`s IneecLIve sysLem
of dispute resolution.
Although the 2012 For-
eign Investment Law ad-
dressed a great number
of legal uncertainties, the
process of contract en-
forcement and dispute
resolution needs urgent
reform. According to the
World Bank, legal dis-
putes take an average
of 1,160 days to resolve
ranking 188th of 189
countries and require
50 percent more admin-
istrative procedures than
the OECD average. While
legal systems in the devel-
oping world are generally
more complex than those
of advanced countries, in
Contd. P 8...(PitIalls) Contd. P 8...(PitIalls)
After decades of isoIation and under-investment, new FBI Hows from across the gIobe are nurturing industriaI modernisation in Myanmar.
Of the $3.6 billion invested last year, about 50 percent was directed into manufacturing enterprises such as garment making, automobile
assembly and food processing factories.
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April 3-9, 2014
Myanmar Business Today
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LOCAL BIZ
4
Myanmar Summary
Myanmar Summary
Jupun to OHer Myunmur
24b in Fresh Loans
J
apan has pledged to pro-
vide Myanmar 24 billion
yen ($234.8 million) in
IresI Iouns Lo hnunce u power
plant and electricity networks.
Japanese Foreign Minister
Fumio Kishida made the pledge
for the loan at his meeting Pres-
ident U Thein Sein, state-run
daily New Light of Myanmar
reported.
Kishida, during another meet-
ing with his counterpart, U
Wunnu Muung wIn, conhrmed
Japans plan to provide an ad-
ditional aid of about 8 billion
($7.8 million) to build a train
operation monitoring system
and to provide advanced medi-
cal equipment to hospitals.
Since Prime Minister of Ja-
pan Shinzo Abe came to power
in December 2012, his govern-
ment has pledged assistance
totalling more than 160 billion
($1.56 billion) to Myanmar, in
a bid to make way for Japanese
companies to foray into the
Kyaw Min Myanmar market and beat out
competitors from the United
States, the EU and China.
During their meeting, dis-
cussions were made on imple-
mentation of Thilawa Special
Economic Zone (SEZ) by Japa-
nese companies, research on
repair of Yangon-Nay Pyi Taw-
Mandalay railways, extension
of Mandalay International Air-
port, assistance for Myanmars
information and TV sector, hu-
man resources development,
health and education, water
supply for Yangon region, and
food security for farmers, the
report said.
Kishida also made a request
Ior cooperuLIon on eorLs Lo
collect the remains of Japanese
soldiers who died in what was
then known as Burma during
World War II. A study has in-
dicated that the remains of as
many as 45,000 Japanese sol-
diers are in the country. The two
foreign ministers also agreed to
continue to conduct military ex-
changes.
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. . , ._e. ..: PT Semen Indonesia
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_e. ._~: .. q._ . Semen Indonesia
- ~ __e. . Dwi Soetjipto ~
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Indonesian Cement Maker to Tap
Myanmars Construction Boom
I
ndonesian cement producer
PT Semen Indonesia is mov-
ing closer to its plan to ex-
pand its business to Myanmar.
Semen Indonesias president
director, Dwi Soetjipto, said the
compuny wouId be hnuIIsIng
the acquisition of a local cement
hrm In June LIIs yeur, ndone-
sia media reported last week.
The value is the same as we
previously announced, name-
ly between $200 million and
$300 million, Dwi said after
an annual general shareholders
meeting in Jakarta.
TIe hrm`s hnunce dIrecLor,
AIyunIzzumun, suId LIe hrm
was conducting due diligence
regarding two cement produc-
ers in Myanmar.
He admitted that neither pro-
ducers production capacity was
Iurge; eucI uveruged uround z
million tons of cement per year.
If they are interesting,
though, theres a good chance
that we will acquire both of the
companies, he said.
n LIe hrsL sLuge, Semen ndo-
nesia is likely to become a mi-
nor sIureIoIder, us LIe hrm wIII
hrsL wunL Lo wILness LIe Indus-
Aye Myat trial market and political situa-
tion in the country.
The company will be seeking
bank loans and issuing bonds
if, in the end, they decide to ac-
quire both producers.
We have not yet decided
which way we are going to take.
Right now, we are concentrat-
Ing on hnIsIIng LIe due dIII-
gence process, he said.
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April 3-9, 2014
Myanmar Business Today
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LOCAL BIZ
5
Myanmar Summary
Contd. P 6...(Transport) Contd. P 6...(Transport)
Myanmar Eyes to Fix Crumbling
Transport Infrastructure
Michael Nesbitt
W
ith a number of
ongoing pro-
jects and more
in the pipeline, Myanmar
looks set to reduce its
transport infrastructure
gap, although a shortage
of labour and materials
could drive up costs.
While progress to date
has been slow in part due
Lo IImILed hnuncIng op-
tions, local players be-
lieve the investment en-
vironment is improving
as a result of recent legal
changes.
The governments
drive to improve the legal
Irumework In LIe heIds
oI hnunce und ownersIIp
will widen the range of
funding options going for-
ward, U Aung Zaw Na-
ing, group CEO of Shwe
Taung Development Co,
told OBG.
We expect this process
of economic and legal re-
forms, together with the
Inow oI Iunds Irom Ior-
eign investors, to facilitate
hnuncIng ucLIvILIes Ior de-
velopers and contractors
in the near future.
The expansion of local
capital markets is expect-
ed to help, as well. The
hrsL pIuse oI consLrucLIon
of the Thilawa Special
Economic Zone (SEZ), a
project jointly led by the
Myanmar and Japanese
governments, is set to be
hnunced by u pubIIc oI-
fering in March. Situated
20 kilometres outside
the commercial hub Yan-
gon, the SEZ aims to raise
$21 million from the sale
of shares, which will be
available only to local citi-
zens and businesses.
WIIIe hnuncIng opLIons
have improved, the surge
in building activity has
raised new challenges.
With construction of in-
frastructure and indus-
trial facilities on the rise,
including three major
airport projects, numer-
ous industrial zones, and
large areas of the coun-
try being explored for oil
and gas, the demand for
resources has pushed up
prices.
The cost of labour and
raw materials has in-
creased as the result of
greater competition,
minister for construction
U Kyaw Lwin told OBG.
However, the price
ucLuuLIons ure Iess se-
vere than those we expe-
rienced prior to the lifting
of sanctions.
Rai l, ai r , sea
Despite the problems
oI hnuncIng, LIe govern-
ment of U Thein Sein ap-
pears eager to address the
infrastructure shortage,
with a particular focus on
the transport sector.
The Japan Internation-
al Cooperation Agency
(JICA) is working with the
Yangon City Development
Committee to improve
the urban rail network in
the countrys commer-
cial centre. According to
JICA, Yangon is one of
the most promising cit-
ies in the region for de-
veloping train networks.
Because a circular railway
line already exists, land
acquisition will be less of
an issue than it is in other
major metropolitan areas,
such as Jakarta.
The existing 45.9-km,
39-station loop line car-
ries about 130,000 pas-
sengers each day. The
goal is to establish a sys-
tem with faster and more
frequent trains, lifting
ridership to around 3 mil-
lion by 2040. The plan is
to extend the railway to
cover 350km, with at least
eight main lines, includ-
ing an extension to the
Thilawa SEZ.
Another major pro-
ject in the works is the
$1.1-billion Hanthawaddy
International Airport,
on a site located around
80km from Yangon. Upon
completion, the new facil-
ity will be able to accom-
modate 12 million pas-
sengers a year, with room
to increase to 30 million,
compared to the 2.7 mil-
lion capacity of Yangon
International Airport,
which will continue to op-
erate as the citys second
airport.
Last year South Koreas
Incheon International
Airport Corp was identi-
hed us LIe preIerred bId-
der for the 30-year pub-
lic-private partnership to
build, run and maintain
Hanthawaddy, but those
talks have since broken
down, according to inter-
national media reports.
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Iabourers carry out construction work at the ThiIawa SpeciaI Economic Zone (SEZ) project within the ]apanese SpeciaI Economic Zone at
Thilawa outside Yangon.
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LOCAL BIZ
6
Myanmar Summary
From page ,... (Transport)
From page ,... (Transport)
The government recent-
ly announced it would
re-tender the project, in-
viting all four short-listed
competitors to submit
oers. OLIer bIdders In-
clude a group comprising
Singapores Changi Air-
port Planners, Yongnam
Holdings and Japans
JGC Corp, as well as a
consortium made up of
Taisei Corp of Japan and
Vinci Airport of France.
Myanmars maritime
ports are also seriously in
need of an upgrade, fol-
lowing years of isolation
and poor management,
which let facilities fall into
disrepair. At present, ma-
jor global lines dock their
motherships in Malaysia
or Singapore, and send
feeder vessels to Yan-
gon Port. Located in the
citys downtown, the port
has a draught of just 8-9
meLres und Is dImcuIL Lo
navigate due to two semi-
submerged sandbars.
Yangon has a second,
smaller port, located at
Thilawa, which is more
easily accessible for
ships. Built in the 1990s,
the port is now being
enlarged as part of the
Thilawa SEZ project. In
December, the Ministry
of Transport announced
that Japan will provide
a $205-million loan for
construction of two new
general cargo wharves at
Thilawa. The government
is also looking to build
new deep-water ports at
the SEZs located in Dawei
and Kyaukpyu, although
both of these projects
have experienced delays.
Michael Nesbitt, edi-
torial manager for My-
anmar at Oxford Busi-
ness Group (OBG), is
in charge of producing
sector specijc resecrch
in Myanmar. Based in
Yangon he works along-
side a team of analysts to
produce DG's jcship
annual reports.
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Myanmar Illegal Timber Exports
Worth $5.7b in 14 Years
Why dont Myanmar log trade fgures add up? Corruption, says NGO
G
lobal imports of timber
from Myanmar between
2000 and 2013 were
three and a half times as large
us LIe quunLILy IL omcIuIIy ex-
ported, proof of serious crimi-
nality and corruption in the
countrys timber sector, accord-
ing to a UK-based watchdog
that analysed the numbers.
OmcIuI hgures pubIIsIed eur-
lier this month showed that
Myanmar exported 6.5 million
cubic metres of timber from its
forests between 2000 and 2013.
In the same period, countries
around the world imported
22.8 million cubic metres of
logs from Myanmar.
The Environmental Investiga-
tion Agency (EIA) discovered
the multibillion-dollar black
IoIe by crosscIeckIng LIe om-
cIuI hgures on Iog IurvesLs und
timber exports published on
March 10 by Myanmars pri-
vately owned Eleven Media
Group with data from a UN
database and the Global Trade
Atlas.
WIIIe LIe omcIuI exporL hgure
already indicates unsustainable
exploitation of the countrys
forests, the reality appears to be
far worse, the EIA said in a re-
port released last week.
TIe pubIIsIed omcIuI LImber
exporL sLuLIsLIcs sIgnIhcunLIy
under-report the true volume
oI wood owIng LIrougI My-
anmars ports and across its
land borders, the EIA said in
Alisa Tang
ILs reporL, noLIng LIuL LIe om-
cIuI hgure uccounLs Ior onIy z8
percent of all recorded interna-
tional trade in Myanmar logs,
suggesting 72 percent of log
shipments were illicit.
Such a gap is indicative of
widespread criminality and cor-
ruption in Myanmars timber
sector.
The EIA estimated the value
of the 2000-2013 illegal exports
at $5.7 billion - four times the
countrys combined education
and health budget for 2013-14.
Haemorrhaging resources
TIe sIze oI LIe omcIuIIy uu-
thorised timber harvest 11.2
million cubic metres also falls
sIgnIhcunLIy sIorL oI LIe Im-
port volumes reported by My-
anmars trade partners, which
oer u Iur more reIIubIe IndIcu-
tor than the Myanmar Govern-
ments suspect data, the report
said.
TIe GovernmenL`s omcIuI
data on forestry and timber
exports reveals endemic illegal
logging and timber smuggling
- crimes only possible through
institutional corruption on a
huge scale, the EIAs Faith Do-
herty said in a statement.
WIIIe LIe omcIuI hgures do
noL IndIcuLe wIo Is benehLIng
from the illicit timber exports,
the EIA said, The clear con-
cern is that, regardless of wider
political reforms, opaque and
unaccountable forest resource
allocations mean Myanmar still
continues to haemorrhage valu-
able natural resources for the
benehL oI u smuII eIILe.
Myanmar has some of Asias
largest remaining expanses
of forest, but its forest cover
shrank from 58 percent of the
land area in 1990 to 47 percent
in 2010, according to Forestry
Ministry data.
n un eorL Lo suve ILs remuIn-
ing forests, Myanmars new re-
formist government has said it
will ban log exports from April
1, cIokIng o prohLs In u secLor
that provided crucial funding
to the countrys former military
rulers for decades.
The EIA said the ban in itself
was not enough and called on
the government to: stop favour-
ing its cronies in forest resource
uIIocuLIon; InvesLIguLe und
prosecute companies or gov-
ernmenL omcIuIs InvoIved In II-
legal logging and timber smug-
gIIng; Increuse Lrunspurency
in the management of forest
resources; und ensure cIvII socI-
ety involvement in the planned
restructuring of the Forestry
Ministry.
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A woman walks with children near logs at a timber yard in Yangon.
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Myanmar Business Today
mmbiztoday.com
7
LOCAL BIZ
Contd. P 12...(Yoma)
Myanmar Summary
Myanmar Developer Yoma Sees Long Road
to ASEAN Integration
M
yanmar-focused
congl omer at e
Yoma Strategic
Holdings Ltd said South-
east Asia needs to work
exceptionally hard to real-
ise a balanced, European
Union-style integration of
such disparate economies.
Yoma is listed in Asso-
ciation of Southeast Asian
Nations (ASEAN) mem-
ber Singapore whose ad-
vanced island-state econ-
omy contrasts with that of
fellow member Myanmar,
rich in gems and natural
gas but paralysed by dec-
ades of military rule and
isolating sanctions.
Elsewhere in ASEAN,
communist Laos has an
economy that is less than
3 percent the size of that
of monarchist neighbour
Thailand, according to The
World Bank. The popula-
LIon dIerence wouId sug-
gest a size of 10 percent.
That we will all share
LIe benehLs oI InLegruLIon
is beyond dispute, Yoma
Chairman Serge Pun said
at the Reuters ASEAN
Summit. But a lopsided
result where some mem-
bers benehL more LIun oLI-
ers is not sustainable.
I think we will make it
happen, Pun said. But I
feel that there has been ...
over expectation of what
ASEAN integration will
do for all of us.
Myanmar s potenti al
The ASEAN chairman-
ship this year resides with
Puns native Myanmar,
which has been looking to
attract foreign investment
since a quasi-civilian gov-
ernmenL Look om ce In
2011.
Asias second-poorest
country after Afghanistan
has no functioning stock
market from which com-
panies can raise funds,
and foreign banks cannot
open branches, just main-
LuIn represenLuLIve om ces
Irom wIere LIey cun oer
companies nothing be-
yond advice.
I think we have a fairly
long way to go to develop
our hnuncIuI secLor, wIIcI
always is the most impor-
tant sector to support the
growth of an economy,
Pun said.
The government plans
to permit limited foreign
Aung Hla Tun
bank activity this year
good news for Singa-
pores Overseas-Chinese
Banking Corp Ltd which
has had a representative
om ce In Myunmur Ior
around 20 years.
When it opens up we
are quite interested to
establish a business pres-
ence there, chief execu-
tive Samuel Tsien said at
the summit, at the Reu-
Lers om ce In SIngupore.
We think thats a mar-
ket in which many Sin-
gaporean companies
have engaged with for
quite some time. There
are quite a lot of Myan-
mar businessmen in Sin-
gapore who are already
doing business with us,
Tsein said.
Sectors in Myanmar of-
fering investors the high-
est growth include infra-
structure, transportation,
tourism and agriculture,
Pun said.
His Yoma conglomerate
earns almost all of its rev-
enue in Myanmar from
property. It also leases
vehicles and runs balloon
tours as it aims to diversi-
fy by raising non-property
revenue to 50 percent.
Last month, Yoma said
it would spend $20 mil-
lion to set up what could
become Myanmars big-
gesL coee pIunLuLIon. L
also said it would diver-
sify by investing $46 mil-
lion in dairy, $12 million
in cold storage and $1.3
million in vehicle rental.
I think we are very fo-
cused on Myanmar, Pun
Yoma Chairman Serge Pun poses for a photograph in his ofce in Yangon. Myanmar-focused congIomerate Yoma Strategic HoIdings Itd
said Southeast Asia needs to work exceptionally hard to realise a balanced, European Union-style integration of such disparate economies.
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said. For the moment, I
dont think we have any
plans to do anything out-
side of Myanmar.
We think this is a once-
in-a-life-time opportu-
nity and we intend to fully
capitalise on the major re-
forms that have been go-
ing on, fully capitalise on
the good prospects of the
economy, Pun said.
Shares of Yoma have
fallen 5.3 percent so far
this year compared with a
2.0 percent decline in the
benchmark stock index.
Reuters
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Strategic Holdings Ltd .
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._ Yoma ~.,_e .e . . .
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. .:.. _~ .~ . q..: .~:~
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.~ ..,.~.:.~_.:.~
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~:q~e~..:.~ .:~
. -. .. :..q.._ ~ . , .. .
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
8
Myanmar Summary
From page ...(PitIalls)
From page ...(PitIalls)
comparison to economies
of similar sophistication,
contractual agreements
in Myanmar are harder
to enforce and intellectual
property enjoys less pro-
tection.
As these issues high-
light, Myanmars huge
investment potential has
many costly caveats. Poor
infrastructure, corrup-
tion, skills shortages and
a burdensome legal sys-
Lem ure druInIng prohL-
ability and threatening
the newly established
stream of modernising
investments of the last
twelve months. If the
current rates of FDI are
to be maintained, busi-
ness needs will require
more careful considera-
tion from policy-makers
when setting their reform
priorities. Alternatively, if
these issues remain unad-
dressed, Myanmar could
once again be left with
only Chinese investors for
company.
Josh Wood was a Vis-
iting Research Fellow at
the Myanmar Develop-
ment Research Institutes
Centre for Economic
and Social Development
(MDRI-CESD) and is a
postgraduate student at
the Australian National
University.
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AirAsia Opens New Travel and
Service Centre in Yangon
M
alaysia-based low
cost carrier AirAsia
has opened a one-
stop travel and service center
(ATSC) in Yangon.
TIe omce Is IocuLed In u Pyue
Wun Plaza on Alanpya Pagoda
road in Yangon.
Tassapon Bijleveld, CEO of
Thai Air Asia, said, In mar-
kets like Myanmar where credit
cards are not as widely used, it
is important for us to provide
facilities to suit the needs of
our consumers which is why we
have the centre.
TIe new omce wIII be open
from 9am-5pm from Monday
through Friday and from 9am-
2pm on Saturdays.
We are very excited to be able
Lo oer u more spucIous ser-
vice facility to our passengers
in Yangon. The new location is
centrally located and equipped
Wai Linn Kyaw wILI more sLu In order Lo pro-
vide more convenience for Air
Asia travelers, Tassapon add-
ed.
ServIces oered uL LIe new
centre include ticket booking,
travel insurance, and adding on
items such as baggage weight
and pre-booked meals.
On this occasion, the airline
oered promoLIonuI Iures Irom
Yangon to Bangkok and Kua-
la Lumpur starting from $30
per way at the centre until 25
March.
AIr AsIu currenLIy oers duIIy
IgILs Irom Bungkok und KuuIu
Lumpur to Yangon as well as
duIIy dIrecL IgILs Irom Mundu-
lay to Bangkok.
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Myanmar Summary
Myanmar to Run Over $2.6b
Trude ecit in o1-1qIY
T
oLuI Lrude dehcIL us oI
March 14 during 2013-14
(AprIIJMurcI) hscuI yeur
amounted to over $2.6 billion,
u senIor governmenL omcIuI Ius
said.
Total exports and imports
during that period were $10.58
billion and $13.19 billion re-
spectively, Toe Aung Myint,
director general from the Min-
istry of Commerce, said. He at-
LrIbuLed LIe rIse In dehcIL Lo LIe
imports of capital goods.
DurIng LIe hrsL 11 monLIs
(April-February) of the current
hscuI yeur, Myunmur suered u
Lrude dehcIL oI $z. bIIIIon, uc-
cording to the Central Statisti-
cal Organization (CSO).
During the period, foreign
trade totalled $22.75 billion,
with exports amounting to
$10.22 billion and imports
standing at $12.53 billion,
CSOs statistics showed.
Of the total export, overseas
trade accounted for $7.6 bil-
lion, while border trade made
up $2.59 billion. Of the total
Shein Thu Aung import, regular trade accounted
for $10.88 billion, and border
trade $1.6 billion.
In February, foreign trade
amounted to $1.96 billion ex-
ports stood at $673.37 million
while imports were $1.28 bil-
lion.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
9
From page ...(OBshore)
From page ...(OBshore)
Myanmar Summary
BSF to Open British International School Yangon
Wai Linn Kyaw
U
K-based British
Schools Founda-
tion (BSF), the
governing body of a world-
wide network of British
International Schools, has
launched the British In-
ternational School Yangon
in a bid to tap Myanmars
burgeoning education sec-
tor.
The foundation has a
long tradition of promot-
ing quality British style
education worldwide,
said Stewart Fry, chair-
man of the British Schools
Foundation.
We strive to ensure all
the schools within the or-
ganisation stand out for
the quality of education
being provided, and we
are determined to ensure
that these qualities are re-
ecLed In our new scIooI
in Yangon from the out-
set.
The British School will
open in Yangon in August
2014. The campus is lo-
cated close to Inya Lake
on the Yangon-Insein
road and will provide
education for children in
Early Years and Primary
In LIe hrsL pIuse oI BS`s
project in Myanmar.
Weve recognised that
there is an acute shortage
of quality international
style schooling here. As
the need for school plac-
es from multinationals
and diplomatic missions
mounts our initial priority
Ius been Lo open our hrsL
campus as quickly as pos-
sible, Fry said.
n ILs hrsL yeur, LIe BrIL-
ish School Yangon will
host around 100-150
students. With the move
into a purpose-built facil-
ity the school expects to
eventually grow to a pop-
ulation of more than 1000
students, BSF said.
We are working on a
purpose built facility to
accommodate 1000-plus
students. Further down
the line as the country
continues to develop we
will be looking at needs in
other cities, Fry added.
Adam Johnson, head-
master of the British
School Yangon, said, The
school will follow the Eng-
lish National Curriculum,
adapted to the schools
context in Myanmar.
He said, however, the
school will go beyond
the requirements of the
standardised curriculum
and provide many addi-
tional opportunities for
personal development.
Sports, music, drama
and educational trips are
all an integral part of the
progrumme oered uL LIe
school.
BSF said small class siz-
es allow teachers to focus
on the individual needs of
each pupil, and all Brit-
ish School Yangon teach-
ers will have professional
credentials from the UK
with relevant experience
in delivering the English
National Curriculum.
Native English speaking
teaching assistants will
also support each class, it
added.
The level of interest
from parents has been
fantastic, said Johnson.
The shortage of high
quality international
schools is apparent and
we are very excited to
be LIe hrsL InLernuLIonuI
school group in Yangon to
oer LIe EngIIsI NuLIonuI
Curriculum.
BSF is a UK registered
non-prohL orgunIsu-
tion established for the
purpose of promoting
British-style education
worldwide. Its network of
schools is one of the larg-
est in the world today,
with 10 schools spanning
3 continents and 9 coun-
tries.
BSF has an outstand-
ing record of attracting
IIgIIy quuIIhed und mo-
tivated teachers, support-
ed by the reputation of
the foundation. BSY will
druw on sLu Irom our es-
tablished schools to make
sure quality standards are
quickly embedded in the
school, said Johnson,
who has 10 years of ex-
perience within the BSF
as teacher, deputy Head
Teacher and Headmaster.
The hallmark of a good
school is that it goes be-
yond the focus on aca-
demic study and empha-
sises the development
of the character of each
child. We arent just pre-
paring pupils for further
education but for success
in life as a whole. Many
BSF pupils expect to pur-
sue highly successful ca-
reers, some even as lead-
ers in society. We see it as
our duty to ensure they
leave us well prepared
and with a good set of val-
ues.
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Foundati on (BSF) ._
British International School
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~ ._.:_~:..._.
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Curriculum ~ q, ~ , q .~: .
~ _._:,.~.._..:..__e.
._~:. .q._.
sis of each and every bid
inevitably takes time,
Nomita said.
When the tenders were
hrsL unnounced IusL yeur,
MOGE did say that the
awards could take up to
year. Investors are ad-
vised to remain patient
and not expect things to
happen overnight.
The ministry said it would
receive $226.1 million as
a signature bonus from
LIe hrms once expIoruLIon
begins on the 10 shallow
water and 10 deep water
blocks $91 million will
come from shallow water
block signings and $135.1
million from the deepwater
block signings.
This amount is the
largest we have received
in history, the ministry
said in a statement.
Myanmars oil and gas
sector attracts the larg-
est share of foreign in-
vestment, accounting
for $13.6 billion, or 40
percent, of total accumu-
lated foreign investment
through September, ac-
cording to the Central
Statistical Organisation
(CSO).
Most of Myanmars cur-
rent hydrocarbon pro-
duction is natural gas.
AccordIng Lo om cIuI sLu-
tistics, the country ex-
ported $3.7 billion worth
oI gus In hscuI yeur zo1z-
2013, mostly to Thailand,
up from $3.5 billion the
year before.
The countrys proven
natural gas reserves to-
talled 7.8 trillion cubic
feet (tcf) at the end of
2012, according to BPs
Statistical Review of
World Energy.
A total of 160 local com-
panies have registered
with the Ministry of En-
ergy as potential part-
ners for winners of the
shallow-water blocks, but
industry sources say only
a few of them have any oil
and gas experience.
Contracts winners will
have to complete environ-
mental and social impact
assessments and submit
reports to the Investment
Commission before start-
ing operation.
This award is in line
with BG Groups strategy
to focus on securing pro-
spective frontier acreage
and enter, on average,
one new basin each year,
Britains BG Group, which
teamed up with Woodside
and won four blocks, said
in a statement.
Myanmars energy
ministry said a total
of 68 companies from
across the world origi-
nally expressed interest
in the auction, which was
launched in April, with 30
hrms evenLuuIIy submIL-
ting proposals.
A LoLuI oI o osIore
blocks were originally up
for auction and it is un-
clear when the remaining
10 sites will be awarded.
George Kirkland, vice
chairman and executive
vice president, Chevron
Corp, said: The explora-
tion of this block is aligned
with Chevrons long-term
strategy to seek opportu-
nities to provide energy to
a growing region.
We are pleased with
the result of this bid
round and the opportu-
nity to evaluate the poten-
tial of this strategic acre-
age, said Melody Meyer,
president of Chevron Asia
PucIhc ExpIoruLIon und
Production Company.
We have a 20-year his-
tory in Myanmar, and we
look forward to support-
ing the continued devel-
opment of the nations
energy sector through the
exploration of this pro-
spective block.
Troy Hayden, managing
director and CEO of Tap
Oil, which teamed up with
unoLIer AusLruIIun hrm
ROC Oil and won the M-7
shallow water block, said,
Myanmar is potentially
a world class hydrocar-
bons province and as part
of Taps Southeast Asian
growth strategy.
Erling Vagnes, Statoils
senior vice president for
the region, said he was
optimistic about the pe-
troleum potential in an
area that he said was vir-
tually unexplored.
With this award, we
have accessed at scale in
another frontier acreage
wILI sIgnIhcunL upsIde, In
line with our exploration
strategy, he said. The
Myanmar contract is Sta-
LoII`s hrsL Ior LIe counLry.
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Students at British School Kuala Lumpur.
B
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
10
Myanmar Summary
A New Eastern Axis?
M
yanmars democrati-
sation is leading to its
opening up and grow-
ing importance for existing and
newer regional powers. Recent
Japanese assertiveness in the
country also sends a clear sig-
nal against Chinas growing
Inuence LIere. SeLLIng usIde
the tension spilling over from
World War II, both countries
share the common ground of
wanting to maintain a safe dis-
tance from China, which is why
Japan-Myanmar relations are
at an all-time high.
Japans assistance in helping
build up Myanmar has deep-
ened LIe purLnersIIp. SIgnIh-
cantly, Japan has appointed
a special envoy for national
reconciliation in Myanmar to
facilitate dialogue between the
government there and ethnic
minorities. Japans support
to ethnic groups by supplying
them with essential food com-
modities and medical stocks is
commendable.
Japans geopolitical ambi-
tions and expanding economic
footprint pose a serious chal-
lenge to the traditional regional
powers in Myanmar. It has of-
fered economic aid to support
the development of the coun-
trys infrastructure in the hopes
of improving the investment
climate there. Its total invest-
ment up to 2013 stands at $292
million, which is nowhere close
to Chinas $14 billion. Never-
theless, its engagement strategy
attempts to counter Chinas in-
uence In SouLIeusL AsIu.
Myanmar will use Japanese
omcIuI deveIopmenL ussIsLunce
loans to the tune of $610 mil-
lion for the implementation of
Sonu Trivedi four projects upgrading the
Yangon-Mandalay railroad and
Yangons water supply, and de-
veloping the Thilawa port and
irrigation facilities in the west-
ern Bago region. Moreover,
Japan has been providing as-
sistance for the development of
Myanmars communication and
posLuI servIces us weII us oer-
ing to train Myanmar police by
conducting technical courses.
The Japanese government is
also involved in grassroots hu-
man security projects in Bago
and Taninthayi regions as well
as in Kachin state.
The visit of Japanese Prime
Minister Shinzo Abe to Myan-
mur In Muy zo1 - u hrsL sInce
1977 was noteworthy. This
was followed by the cancella-
tion of $3.7 billion of debt. Ja-
pan has further pledged to de-
velop a special economic zone
in Thilawa, which is expected
to promote industrial develop-
ment and create employment
opportunities. Japan has also
shown willingness to help in de-
veloping the Dawei port along
with Thailand. There has also
been a request for help to pro-
mote vocational training and
agronomy education in Myan-
mar. Further, Japanese com-
panies also participated in the
Japan festival held recently in
Yangon. But they must make
responsible investments and
be careful not to follow Chinas
example of partnering with for-
mer junta cronies.
So far as India is concerned,
its stepping up its development
cooperation with Myanmar, in
light of the latters continuing
reform process and their his-
torical and cultural ties. India
is trying to leverage its soft
power and foster deeper eco-
nomic and business links with
Myanmar. Compared to Chinas
mostly commercial involvement
in the country, India and Japan
have focused on infrastructure
development, capacity building
and humanitarian assistance.
This is in line with Nobel lau-
reate Aung San Suu Kyis vi-
sion. According to her, when
you help either in the form of
development programmes or
humanitarian programmes,
I want the people involved to
gain skills so that they earn and
they learn.
India has been particularly
instrumental in setting up cen-
tres for industrial training and
enhancement of IT skills, and
other such capacity-building
programmes. Prime Minister
Manmohan Singhs visit to My-
anmar earlier this month, the
second in the last two years, is
evidence of the countries closer
ties. Indias mega project to de-
velop the Sittwe port along the
same lines as Japans Thilawa
and Thailands Dawei projects
must also be acknowledged.
The project envisages enhanc-
ing connectivity between India
and Myanmar, which will lead
to the development of trade be-
tween the two countries. It will
also contribute to the economic
development of Mizoram and
other Northeastern states. The
ambitious trilateral highway
linking India, Myanmar and
Thailand, likely to be completed
by 2016, adds another dimen-
sion to the emerging security
architecture in the region.
L Is sIgnIhcunL Lo observe LIuL
this growing alliance has deeper
consequences for the region as
well. The coming together of
Japan and Thailand in Myan-
mar, and now Indias invitation
to Japan to invest in and build
overland infrastructure in the
Northeast, is going to outplay
Chinese dominance in the re-
gion. Furthermore, Japanese
development of the Chennai
port and plans to link it with
Dawei are indications of Japan,
India and Thailand coming to-
gether and forming an axis in a
bid to confront China in Myan-
mar. Indias growing closeness
to Japan and recent maritime
security exchanges have been
viewed as a strategic attempt to
challenge Chinese dominance
and gain an advantage, which
Is goIng Lo redehne LIe securILy
architecture of the region.
The writer teaches political
science at Zakir Husain Col-
lege, University of Delhi.
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"Recent Japanese assertiveness in the country
also sends a clear signal against Chinas growing
influence there. Setting aside the tension spilling
over from World War II, both countries share the
common ground of wanting to maintain a safe
distance from China, which is why Japan-Myan-
mar relations are at an all-time high."
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
11
Myanmar Summary
Myanmar Summary
Govt to Spend Over $26m in
Hydropower Projects
M
yanmar will spend
over $26 million on
hydropower projects
durIng LIe zo1q-1 hscuI yeur,
according to the Union Budget
Bill 2014.
The Hydropower Implemen-
tation Department under the
Ministry of Electric Power will
spend about $8 million for
equipment for the upper Yeywa
hydropower project, $8 million
for Thahtay hydropower project
and $4 million for the upper
Kengtung project, according to
the budget bill.
The funding will come from
Kyaw Min China and other aid agencies.
A total of $2 million in Chi-
nese loans will be provided to
Golden Energy Co, which op-
erates Thayyaykhat (2) project,
and over $3 million will go to
Future Energy Co, which will
implement Beluchaung (3) pro-
ject.
The state-owned enterprises
will spend more than $243 mil-
lion on various projects, while
Japan will assist with the ren-
ovation of Beluchaung No.2
power plant, the bill said.
Yangon City Electricity Sup-
ply Board (YESB) will also use
loans from other international
aid agencies such as Japan In-
ternational Cooperation Agency
(JICA) and Asian Development
Bank (ADB).
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Business Partnerships Will Help Growth in
Myanmar in 2015: KPMG
Positive local and foreign business partnerships could be a win-win
B
usiness partnerships
through merger and ac-
quisition, joint-ventures
or strategic alliances will be a
driver for business expansion
in Myanmar going forward into
2015, said Managing Partner of
KPMG in Myanmar Yasuhide
Fujii.
Opportunities in Myanmar
are increasing for business, but
so is competition. Looking for-
wurd, some IocuI hrms muy IeeI
the pinch as international com-
panies move in on their turf,
said Fujii.
Wai Linn Kyaw Were starting to see cases
where it would make more busi-
ness sense for local and inter-
nuLIonuI hrms Lo work LogeLIer
and complement each other, in-
stead of competing, in order to
become sustainable in the long
term. Local and international
hrms In Myunmur eucI Iuve
their distinct strengths. We
could see some positive part-
nerships down the road.
KPMG, LIe hrsL umong LIe
BIg our LIuL omcIuIIy re-en-
tered Myanmar after the easing
of international sanctions, has
assisted a number of interna-
tional clients to successfully
set up businesses in the once-
closed economy.
The auditing giant said the
government is continuing to
uppIy ILs besL eorLs In reIorm-
ing the legal system following
the enactment of the Foreign
Investment Law in 2012. At the
very beginning of this year, the
government enacted the Spe-
cial Economic Zone law which
grants income tax exemptions
for 7 years and 5 years to busi-
nesses in the free zone and the
promotion zone respectively.
Other important bills have
been proposed, including
amendments to the land laws,
the foreign investment law, the
Small Medium Enterprises De-
velopment bill, the Condomini-
um bill, an amendment to
the Mining Law.
We are well aware of the pace
of change in Myanmar. One
way that we can help the busi-
ness community is by holding
The KPMG Myanmar Business
Forum on a quarterly basis to
keep business people up to date
about whats going on, what to
look forward to and how to deal
with the challenges in Myan-
mar, said Fujii at KPMGs third
Myanmar Business Forum
The forum discussed on key
points for doing business in
Myanmar through merger and
acquisition, joint-ventures and
strategic alliances. The panel
discussion featured business-
people with experience of the
trends relating to their business
activities in Myanmar.
The KPMG Myanmar Busi-
ness Forum attracts both local
and foreign business people
who come together to share
ideas and experiences. The
business environment in My-
anmar is changing very fast and
we are keen to play our part in
equipping business leaders with
knowledge that will help them
navigate the evolving business
environment, added Fujii.
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Yasuhide Fujii, managing partner of KPMC in Myanmar, speaks at a forum.
W
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
LOCAL BIZ
12
Myanmar Summary
Myanmar Summary
Myanmar Summary
From page ;...(Yoma)
Bruneis Sultan to Visit
Myanmar to Boost Ties
B
runeis Sultan Haji Has-
sanal Bolkiah Muizzad-
din Waddaulah will pay a
state visit to Myanmar in a bid
to boost bilateral ties between
LIe Lwo counLrIes, un omcIuI un-
nouncement said without speci-
fying the date of his visit.
The sultans upcoming Myan-
mar visit comes after President
U Thein Sein visited Brunei in
December 2012.
The small island nation of
Brunei is the 7th largest trade
partner of Myanmar among
ASEAN nations, and mostly
trade gems, jade and jewellery
with Myanmar.
In July 2007, Brunei exempt-
ed LurI on over zoq ILems oI
products imported from My-
anmar under the ASEAN Inte-
Shein Thu Aung gration System of Preference
program in a bid to boost the
countrys textile production.
Myanmar and Brunei estab-
lished diplomatic ties between
the two countries in 1993.
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Thai Beverage Subsidiary
Establishes JV in Myanmar
Aims to expand restaurant business
T
hai Beverage has an-
nounced that its sub-
sidiary, Oishi Group
Public Company Limited, has
approved the project of invest-
ment in expansion of restaurant
business in Myanmar.
Oishis board of directors has
also approved the investment
in the joint venture company
between Oishi F&B (Singapore)
Pte Ltd (OSPL), an indirect
subsidiary of Oishi Group in
Singapore, and CM Foods Co
Ltd (CM Foods) in Myanmar to
serve the expansion of restau-
rant business.
The investment proportion of
OSPL will not exceed 40 million
baht ($1.29 million), the com-
pany said.
Pann Nu The JV is set to be incorpo-
rated by May.
President Wants GDP Growth
No Less Than 5pc
M
yanmar President U
Thein Sein last week
cuIIed Ior eorLs Lo
realise the countrys annual
Gross Domestic Product (GDP)
growth target of no less than 5
percent.
U Thein Sein made the re-
marks in the parliament on the
occasion of the third anniver-
sury oI LIe LukIng omce oI IIs
government.
He underlined that achieve-
ments have been made to some
extent in economic market pol-
icy, attracting foreign invest-
ment and establishing Special
Economic Zones which resulted
in creating job opportunities
and possessing higher technol-
ogies.
On attracting foreign direct
investment into the country,
Myanmars new Foreign In-
vestment Law was enacted in
November 2012, replacing the
1988 version.
Foreign investors mainly in-
vested Myanmars mining sec-
tor before lifting sanctions on
the country, he said, adding
that nowadays the ratio of in-
vestment has changed and the
InvesLmenL ows InLo consLruc-
tion and industrial sectors.
He pointed out that in 2013,
Myanmars FDI amounted to
Aye Myat $3.5 billion which was injected
into manufacturing, hotel and
tourist sectors, up from $1.4 bil-
lion in 2012.
It is expected that investment
will be high in such sectors as
telecom, airport projects, spe-
cial economic zones and gar-
ment.
As for tourist sector invest-
ment, he said Myanmar attract-
ed over 2 million tourists last
yeur und LIe hgure Is expecLed
to reach over 3 million in 2014
and 5 million in 2015.
He pledged that the govern-
ment will help to develop com-
modity production of ethnic en-
trepreneurs in the country.
Dealing with Framework
of Economic Social Reform
(FESR) which was completely
drawn at the end of 2012, he
said that Myanmar has won
support from international or-
ganisations and most foreign
countries.
Myanmar secured $6-billion
debt relief from Norway, Japan,
Germany and other Paris Club
creditor countries due to the
vigorous reform process under
the Framework of Economic
Social Reform (FESR), he said.
The president added that gov-
ernment and private entrepre-
neurs would cooperate in Small
and Medium Enterprises (SME)
sector development.
Brunei SuItan HassanaI BoIkiah (R) hands over the symboI of ASEAN Chairman-
ship to Myanmar's President U Thein Sein during the cIosing ceremony of the 23
rd
ASEAN Summit in Bandar Seri Begawan, capital of Brunei.
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Myanmar President U Thein Sein (R) speaks during the 9
th
regular session of the union parliament in Nay Pyi Taw.
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Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
13
Myanmar Summary
Myanmar Summary
China Economic Growth on Track,
No Immediate Need for Stimulus: ADB
Chinas growth seen around govt target of 7.5pc this year
Kevin Yao
C
hinas economy may still
grow around 7.5 percent
this year despite signs of a
slowdown, and there is no imme-
diate need for the government to
roll out fresh stimulus measures,
Asian Development Bank (ADB)
President Takehiko Nakao said.
Nukuo, Iormer Jupunese vIce h-
nance minister for international
uuIrs, LoId ReuLers Ie expecLs
Chinas annual economic growth
to be still roughly in line with the
governments target, although
there may be ups and downs.
ADB is revising its forecast on
Chinas growth for 2014, current-
ly at 7.5 percent, he said, but did
not elaborate.
Chinese leaders face a chal-
lenge to keep the worlds second-
largest economy on an even keel
while forging ahead with a long
list of market-based reforms an-
nounced at a key party meeting
late last year, he said.
He said that some short-term
stimulus might be necessary to
smooth out volatility in the econ-
omy, but there was no immediate
need as growth remains healthy
due to the countrys ongoing ur-
banisation and rising consump-
tion.
At this moment, I dont think
China needs to resort to a stimu-
lus package, he said, adding that
the economy will likely grow at a
rate of around 7.5 percent.
China is still in the process of
urbanisation, and people need
places to live. Consumption is
growing very fast, more than
growth of the economy, he said.
Concerns about the health of
the Chinese economy are mount-
ing after a string of data showed
growth is slowing more sharply
than expected in early 2014, rais-
ing doubts if the growth target
can be met in the absence of fresh
stimulus.
Activity in Chinas factories
sIowed Ior u hILI sLruIgIL monLI
in March, a preliminary private
survey showed on Monday, rais-
ing market expectations of gov-
ernment stimulus to arrest a loss
of momentum in the worlds sec-
ond-largest economy this year.
Economists in a Reuters poll
had earlier predicted Chinas
growth will slow gradually over
the next two years as the govern-
ment forges ahead with struc-
tural reforms and seeks to curb
elevated debt levels to help create
long-term sustainable growth.
The economy expanded 7.7 per-
cent in 2013, hovering near its
weakest pace since the late 1990s.
Debt problems manageable
Nakao said he was impressed
by Chinese leaders commitment
to market-oriented reforms to
help put the economy on a more
sustainable footing, but they
needed time to implement them.
Liberalising interest rates and
the currency regime in China
should go hand in hand, and in-
terest rate liberalisation could be
carried out in a step by step man-
ner Lo wurd o possIbIe bunkIng
risks, he said.
Chinas debt problems remain
manageable as the economy
grows sLeudIIy, buL pubIIc hnunce
reforms including giving prov-
inces more revenues to match
their responsibilities will be vi-
tal for dealing with the root cause
of the issue, he said.
Some companies or local gov-
ernmenL hnuncIng veIIcIes cun
go bankrupt if their management
is not strong enough, this can
happen in any country, but the
issue is whether it becomes a sys-
temic issue for the economy or
not, he said.
Earlier this month, loss-making
Shanghai Chaori Solar Energy
Science and Technology Co Ltd
missed a bond interest payment,
LIe hrsL sucI domesLIc bond de-
fault of its kind and an event seen
as a landmark for market disci-
pline in the economy.
He said Asian economies were
more prepared to cope with any
economic turbulence and the re-
gions fundamentals were much
stronger than there were during
LIe AsIun hnuncIuI crIsIs In LIe
late 1990s.
They are more prepared to
take action quickly if there are
signs of instability, he said.
Fragility? I dont buy that idea.
Of course, we cannot be compla-
cent, we should always be pre-
pared.
Japans monetary policy eas-
ing, which has supported the
economy and boosted the coun-
trys foreign direct investment
ows Lo LIe resL oI AsIu, couId
IeIp oseL uny ImpucL Irom LIe
withdrawal of US monetary stim-
ulus, Nakao said. Reuters
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Japan Steel Makers to Study Imports Amid Dumping Fears
Yuka Obayashi
J
apans steel industry will
examine a surge in im-
ports from its Asian neigh-
bours for any signs of dumping,
with concerns the rising ship-
ments will halt a recovery in
domestic steel prices and crimp
prohLs Ior IocuI hrms.
Steel product imports into
Japan jumped 44 percent year-
on-year in January to 487,000
tonnes, the highest in 16 years,
led by a big jump in imports
from South Korea, Taiwan and
China.
Imports from South Korea
have increased sharply while
supply from China has also
climbed, Hiroshi Tomono,
chairman of the Japan Iron and
Steel Federation told a news
conference.
With the current foreign ex-
change levels, it is strange to
see such a jump in imports, he
added, pointing to the weaken-
ing of the yen over the past 18
months.
Asked whether Japan should
take anti-dumping action, To-
mono, who is also president of
world No.2 steel maker Nippon
Steel & Sumitomo Metal Corp,
said the federation planned to
Lruck LIe Lrude hgures more
closely and more frequently.
Before we talk about anti-
dumping action, we need to
hnd uII LIe IucLs und speuk up
on wIuL we hnd. TIuL Is LIe hrsL
step.
Demand for steel products
in Japan has risen in line with
the governments stimulatory
economic measures, boosting
prohLs Ior IocuI sLeeImukers,
but also opening a door for oth-
er AsIun sLeeImukers suerIng
from low margins amid a re-
gional oversupply.
Tomono cautioned that the
trend could continue.
Given strengthening over-
supply pressure due to higher
steel outputs in East Asia and
slack demand in China, we need
to be prepared for a further in-
crease in imports, he said.
Reuters
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._.
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.:. _. . .~ q. ~, . , ,~~~ ~,
~q._.. ~' ..~~. ~_...
..:~_e.._~:. .q._. .~:~
q.e:. ~.. ~,~.~. ~
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.~: ~ q .e:.-. .~ , .:.. :~. ,
~.~~.:.. ~,~.. ..~,
.:.. :._ . ~.:.~ . _e. ._~: .
.,.-....~..,..q:
~. ._~.-~ __e. . Hiroshi Tomono
~ .~..:q....~..~ ._.:
_~:..._.
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
14
Myanmar Summary
WSS Invests to Support Increased
OHshore Oil And Gus Activity in Asiu
W
ilhelmsen Ships
Service (WSS)
is expanding its
network of supply points
across Asia as it responds
to an increasing level of
osIore oII und gus ex-
ploration and production.
TIe hrsL new WSS
supply point, at Song-
khla, southern Thailand
opened in January 2014
and other locations have
been IdenLIhed Lo enubIe
WSS to work closer to ar-
eas of emerging demand.
New supply sites are un-
der consideration in Ke-
maman, Malaysia, Balik-
papan, Indonesia and in
Myanmar, the company
said.
Countries including
Malaysia, Indonesia and
Wai Linn Kyaw Myanmar present strong
regional growth potential,
with marginal and deep-
wuLer heIds conLInuIng Lo
drive the investment in
upstream assets.
Joe Peng, osIore uc-
count manager Asia-Pa-
cIhc, WSS, suys LIe com-
panys focus on safety and
its strong network are
natural advantages in a
regIon wIere LIe osIore
sector is still growing.
This is a complex mar-
ket with a diverse cus-
tomer base, ranging from
oIIheId operuLors, drIIIIng
contractors, production
operuLors Lo osIore sup-
port companies.
Close engagement
over the past 12 months
enables us to understand
their challenges of oper-
ating in such a diverse
and often remote geo-
graphical location. Their
top three concerns are
safety, logistics issues and
reliability, subjects where
WSS can bring value and
vast knowledge.
A surge in spending on
exploration and produc-
tion globally is also driv-
ing new building orders at
shipyards in China, South
Korea and Singapore, as
un ugeIng eeL Is beIng re-
newed with higher speci-
hcuLIon usseLs.
South Korea Boosts Air Defences with
$6.8b Budget for F-35s
S
outh Korea expects to
pay around 7.34 tril-
lion won ($6.79 billion)
for 40 Lockheed Martin F-35
hgILer jeLs, Lwo sources wILI
knowledge of the matter said,
as Seoul boosts its air defences
amid simmering tensions in the
region.
SouLI Koreu uIso conhrmed
plans to buy four Northrop
Grumman Global Hawk un-
manned aircraft to monitor its
prickly neighbour North Korea.
The drones will cost about 880
billion won and will be deliv-
ered starting 2018, one of the
sources said.
The defence deals also come
Joyce Lee as ties between Japan, China
and South Korea have chilled
over the past year, and the re-
gions three powers look to beef
up their defensive capabilities.
Seouls arms procurement
agency reported the estimated
budget of around 7.34 trillion
won to buy the radar-evading
F-35s plus support systems to a
committee overseeing military
purchases earlier on Monday,
the second source said.
South Korea says the F-35
deuI wIII be hnuIIsed In LIe LIIrd
quurLer, wILI LIe hrsL deIIvery
in 2018.
The budget has received the
hnuI upprovuI oI LIe hnunce
ministry, Defense Acquisi-
tion Program Administration
(DAPA) spokesman Baek Youn-
hyeong said.
Lockheed said in a statement
it welcomed South Koreas an-
nouncement and it would sup-
port discussions between Seoul
und WusIIngLon Lo hnuIIse LIe
order this year.
South Korea decided to re-
draw the terms of an 8.3-trillion
won Lender Lo buy 6o hgILers
last year after dropping an op-
tion to buy Boeing Cos F-15s in
Iuvour oI purcIusIng u hgILer
with stealth capabilities.
In December, Seoul reduced
the purchase to an initial 40
jets.
Lockheed Martin agrees ...
that the cost of the F-35 is on
a downward path that will lead
to a Unit Recurring Flyaway
(URF) cost for an F-35A of be-
tween $80-85 million, said
Randy Howard, Director of
Lockheed Martins F-35 Korea
Business Development in an
emailed statement.
A separate South Korean mili-
tary source briefed on the buy
cautioned that although F-35
yuwuy cosL Is expecLed Lo IuII
beLween now und hrsL deIIvery,
Lockheeds projections might
not fully apply to South Korea
as the estimate paints a rosy
picture that appears to presup-
pose the best scenario for the
progress of the F-35 program.
The announcement provided
some good news for Lockheed
after a spate of critical reports
on challenges with software de-
veIopmenL Ior LIe hgILer, LIe
emergence of additional bulk-
head cracks during long-term
durability testing, and news
that Italy could further scale
back its plans to buy 90 F-35s.
Italy had already cut its
planned order by 30 percent
two years ago.
South Korea is the 10th coun-
Lry Lo muke u hrm commILmenL
Lo buy LIe new ockIeed hgIL-
er, joining the United States,
Britain, Australia, Norway,
Italy, the Netherlands, Japan,
Israel and Turkey.
Canada and Denmark, which
help fund development of the
F-35, are still deciding whether
Lo buy -s or oLIer hgILers.
Singapore has also expressed
interest in the planes.
South Korea was the eighth
largest importer of major weap-
ons in the world between 2009
and 2013, with 80 percent of
the imports supplied from the
United States, according to
think tank Stockholm Interna-
tional Peace Research Institute
(SIPRI). Reuters
Myanmar Summary
.~: ~ q.e:.. ._ Lockheed
Martin F-35 e ~ ~:~ ..e: .:.
~:.~eeq,~~~ ~.. ...
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~~~ ..._ ~: .~:~ e . .:.~
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.... .~:. ~e e . :.q, ~. ~. ~
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q~..:.~ ..:_~_......:.q,
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., ~,~. .~:~q.e:.~
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.,.._..._ ..~....:q~
.:_~._ .
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(WSS) ._ ,.~- ..,.
~,q~.:.~ ~:q~..~
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.:~.:~ . q :.e . .:..
~ . . . ~._.~.,.:.~ .~~
.:._~~~._~: e.~
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.:._.._e.._.~~, ...
~,,~|q.~ ...~:
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WSS supply point ~ .
. _.. ~:q...~ . ~e . ~:.
_. ~~ .:._ -q e:.:..
~, .~,:.~ .,:~ . supply
point .:.~ ~_.:q,
~~~._. ~_.:..,q:.:.~
.~.~:.._...:._.._e.
._~: . . q._ ..,:~ . ~ ..
. . ~ q, . ..:..,..:.,q:
.:.. : Kemaman ....q:.
Balikpapan ~ . , .q :..
_., .:. ~ ~ _e. ._~: . ~ . ~
. ._.:_~:..._.
....q :. ~ . , .q :.. _., .:
. ~ . :.... q:e _e .~ .~~
.~.:.~.:.~:..:. e.
~. , ~ q .,_. . .q, . .:~
.:~ . . . , ..:.~~ ~ ~.
~.. ..~:. .:.q .,._ .
A Lockheed Martin F-35. South Korea expects to pay around 7.34 trillion won ($6.79 billion) for 40 Lockheed Martin F-35
hgILer jeLs.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
REGIONAL BIZ
15
Myanmar Summary
Myanmar Summary
Singapores Tigerair Orders Airbus Jets Worth $3.8b
Airbus announces 37 frm A320neo orders plus 13 options
Anshuman Daga
S
ingapores Tiger Airways
Holdings Ltd has placed
an order for 37 Airbus
A320neo aircraft worth $3.8
billion at list prices, taking de-
livery of the planes from 2018
to 2025, the carrier said.
Tigerair said an existing order
for nine Airbus A320 aircraft,
part of a larger order agreed
in 2007, will now be cancelled.
These aircraft were originally
scheduled for delivery in 2014
and 2015.
Airbus said in a separate
statement Tigerair had also tak-
en options on an additional 13
A320neo aircraft.
TIe Iong-Lerm eeL renewuI
and expansion comes as Tigerair,
which is about 40 percent-owned
by Singapore Airlines Ltd , takes
steps to try to prevent a third
straight year of losses.
In January it sold its Tigerair
Philippines business to Cebu
PucIhc, LIe urcIIpeIugo`s bIg-
gest airline, cutting its losses
in a market where a sharp in-
crease in available seats pushed
down ticket prices.
We have re-calibrated our
strategy and taken the neces-
sary steps to re-position Tige-
rair, Tigerair chief executive
Koay Peng Yen said.
TIIs deuI eecLIveIy dIssI-
pates some concerns over a po-
tential capacity overhang in the
next couple of years.
Tigerair said the negotiated
price for the new order was
sIgnIhcunLIy Iower LIun LIe
list price. The jets will be pow-
ered by engines from Pratt &
Whitney. Reuters
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Ltd ._ ~..q ~, ..'.: , ...
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Tigerair - ~...:~q:q..
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Russias Leading Role in The Indonesian Mining Revolution
Randy Fabi and
Fergus Jensen
R
ussias two metal giants
have emerged as big win-
ners from Indonesias
new mining law, after leading
a drive to get Jakarta to stick
to its controversial mineral ore
export ban in the face of oppo-
sition from miners and Asian
buyers.
In its six-month lobbying
campaign last year, United
Company Rusal and Norilsk
Nickel delivered a blunt mes-
suge Lo ndonesIun omcIuIs: We
will only invest billions of dol-
lars in smelters if you ban baux-
ite and nickel ore exports.
TIe eorL seemed Lo Iuve
puId o, despILe u denIuI by n-
donesIu LIuL IL wus Inuenced.
WIen LIe Iuw cume InLo eecL
this year, Indonesia enforced a
water-tight export ban for only
two major minerals nickel ore
and bauxite.
The halting of $3 billion of
annual nickel ore and bauxite
exports has already lifted the
price of nickel and helped sup-
port aluminum, boosting the
fortunes of Rusal and Norilsk,
the worlds top aluminum and
nickel producers, respectively.
At the same time, it has
strengthened the case for the
pair to invest billions of dollars
in Indonesia to build smelt-
ers to replace costly capacity in
Russia, a key part of a recovery
plan for struggling Rusal and in
line with Indonesias own aims
to earn more from its minerals
resources.
The mineral ore export ban is
aimed at forcing miners to move
up the value chain by process-
ing the minerals they dig up.
Rusal CEO Oleg Deripaska
travelled repeatedly to Jakarta
last year as signs emerged that
the government might water
down the ban under pressure
from miners, and concerns over
its impact on Southeast Asias
largest economy.
They made the export ban
policy the main requirement
for them to invest here, Indus-
try Minister Mohamad Hidayat
told Reuters.
JusL beIore LIe bun Look eecL
on January 12, Indonesia con-
ceded to pressure from miners
and made last-minute changes
to the policy to allow shipments
of most metals to go on, but it
did not relax the policy for nick-
el ore and bauxite.
The supply cuts have al-
ready been a game changer for
nickel, with benchmark nickel
prices soaring 17 percent to an
11-month high after the ban,
while starving global markets
of bauxite that should help curb
Chinas huge aluminum expan-
sion and support global prices.
TIIs Ius benehLed RusuI und
Norilsk, whose shares have ris-
en more than 11 percent since
the ban, though it has been at
the expense of big buyers such
as China and Japan. It has also
come at a price for Indonesia
which, despite gaining a pledge
Ior u smeILer, Ius suered mIne
cIosures und Iuyos.
Behind all of this is Rusal,
said Tjandra Irawan, director of
Indonesias Mineral Entrepre-
neurs Association. What Rusal
always wanted was a total ban
... only then would they invest.
Indonesias industry minister
denIed overseus hrms pIuyed u
role in how the ban was imple-
menLed. oreIgn Inuence on
such a big economic policy is
sensitive in Indonesia, particu-
larly with elections looming in a
few months.
RussIun hrms were, Iowever,
involved like no other foreign
companies in pushing their case
repeatedly sending executives
to Jakarta, organising a confer-
ence Lo Iobby omcIuIs, und Leum-
Ing up wILI InuenLIuI IndusLry
players to push their case.
When asked about its lobby-
ing strategy, Rusal said it was
closely following the develop-
ments in the months leading
up to the ban because of the un-
certainty over how the govern-
ment would implement the law.
Reuters
Trucks carry ore from stockpiIes at Newmont Mining Corp`s copper and goId mine on Indonesia`s Sumbawa isIand.
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, q :.. - .~ ~ .. . , ._~ .. . .
._ ~ . , .q :.. -.~ ~ ....
.. ~ ..'.:_. ..,:~ ~ .~: .~ .
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- ~_..:.ee .~,.~..~
~:._..:.._.. .~~...,..:.
. ~:q . ~e e . .:.- ., ~ . .:.
~ ._. _~.~ .,. q._ . United
Company Rusal . Norilsk Nickel
~ ._ ~ . , .q :.-~:~, q . .:.~:.
,.~~.,_e .:~.~.~.
,~e.~~...:.~ ~:._...
.~~q_~..,..:.~ ~..q
~,..'.: .e.. _ q..._...
._e ._.:_~:..._.
,q:.~.~...~.,_e ~.,.q:.
. .:~ . ~ .~ . , ~e .~ .:.
~ . . ~ ~:._.. q, ~~ ~ ._.:~ .~:
..e._~._.~.,.q:.. ~..|
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e...~ ...~q.:._~.|
,~e.~. .:~.~.~~.
. ~ ~:._.. .~ ._ ~. .|...~
.|~.._~~~ ,q:.~.~_~..:.
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_.. ,.~~.q._~~._e..:._.
_e.._.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INTERNATIONAL BIZ
16
Myanmar Summary
Myanmar Summary
How Qatars World Cup Could End Up Killing
4,000 Migrant Workers
A
recent report sug-
gests that unless
Qatar issues and
enforces sweeping labour
reforms soon, more than
4,000 migrant workers in
the country will die before
it hosts the 2022 World
Cup.
The Case Against Qa-
tar, published earlier this
month by the Internation-
al Trade Union Confed-
eration, is a damning one,
citing a long list of issues
that persist thanks to an
archaic immigrant spon-
sor system.
Mark Byrnes The organisations pro-
jected death toll is based
on mortality trend data
from the Indian and Nep-
alese embassies provided
since 2010, when Qatar
won its bid to host the
World Cup. An estimated
1,200 Indian and Nepa-
lese migrant workers have
died in Qatar over the last
three years from work-
related causes (which
include accidents on the
job, heart attacks from
heat stress, and illness
connected to substandard
living conditions). The
two countries are esti-
mated to supply near half
of Qatars 1.4 million mi-
grant workers.
The ITUC report says
that many of these deaths
can be attributed to the
countrys kafala system,
which grants migrant
workers very few rights.
Under current law, mi-
grant workers must have
domestic sponsorship
(their employer) who then
has control over work
conditions, compensa-
tion, and the labourers
ability to change jobs or
leave the country.
The report goes on to
share personal stories of
workers enduring drawn
out processes with la-
bour courts, working
without pay, and having
pussporLs conhscuLed by
supervisors. Qatar has
established new legal
protections for migrant
construction workers in
the past year, including
a mandatory but self-au-
dited welfare adherence
plan by contractors, but
the ITUC says theres no
evidence to suggest these
new provisions can actu-
uIIy be enIorced. Conhs-
cating passports, for ex-
ample, is already illegal
in Qatar but still happens
anyway according to not
only the ITUC report, but
a Guardian investigation
last fall.
Despite the many testi-
monials on top of similar,
previous investigations,
Qatars Supreme Commit-
tee for Delivery & Legacy
(which oversees World
Cup-related develop-
ment) told the Wall Street
Journal recently that the
TUC`s hndIngs ure IIL-
tered with factual errors
and attempts to discredit
the positive work we are
undertaking.
The country is building
up an estimated $140 bil-
lion worth of new infra-
structure in time for the
World Cup, including new
stadiums, new roads, an
airport, and multiple rail
projects. A FIFA execu-
tive, Theo Zwanzinger,
has previously said that
working conditions in the
host country are unaccep-
table but that its neither
anything new nor some-
thing FIFA has any con-
trol over.
This feudal system ex-
isted before the World
Cup, said Zwanzinger.
FIFA is not the lawmak-
er in Qatar.
The ITUC met with
FIFA to discuss their re-
port recently. At a press
conference last week, the
soccer organisation did
acknowledge some re-
sponsibility in the matter,
but FIFA president Sepp
Blatter added, we cannot
interfere in the rights of
workers.
For comparison, the re-
port states that 60 people
died from work-related
incidents in Sochi prior to
the Olympic Games. Sev-
en workers in Brazil have
died so far in preparation
for this summers World
Cup.
Foreign laborers work at the site of a new road in Doha, Qatar. According to recent media reports, im-
migrants working on projects for the WorId Cup in 2U22 have been subject to abuse and harsh working
conditions.
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._~:....~ ..~..~..
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q~. ~~ ~.:e.:._..
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~ .q .q ._.: .. . .:. ,~~~
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._~:. .q._.
International Trade Union
Confederation (ITUC) . ~.
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Against Qatar ~:. e..
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.,...: .....~:~~.
~:~:.~ ~.e. ,..|
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~~~ ,..|. ....._~._~:.
.q._.
~. .|... .. .:.~ . . , .
. ..~: ~._e. . :.. . . ..q:|
. ~. . , ~ . :. .:.q. . .,.
.e ..~ .:.._~: .~, ...:
_e..~.q._ ~....~
.~ ..:~.~ .:..|~ ._~: .
.q._.
~. .| . . . . . . .q ._.: .
~. . ..:..:.._ ~:~:.
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., .~ ~ q:..,..|.~
q.,._~:. .q._. .....
~.:.. . : ~:~:. - kafala
.,. . .. . .,._~: . ITUC
- ..~..~q .q_.. ~..|
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.:.~~~ ~.~.q.~,_.
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US Law Firm Plans to Bring Suit Against
Boeing, Malaysia Airlines
A
US-bused Iuw hrm
said it expects to
represent families
of more than half of the
passengers on board the
missing Malaysian Air-
IInes IgIL In u IuwsuIL
against the carriers and
Boeing Co, alleging the
plane had crashed due to
mechanical failure.
TIe BeIjIng-bound IgIL
MH370 disappeared more
than two weeks ago, and
was announced to have
crashed into the remote
southern Indian ocean
with all 239 on board pre-
sumed to have died.
Chicago-based Ribbeck
uw Ius hIed u peLILIon
for discovery against Boe-
Dena Aubin and
Rujun Shen
ing Co, manufacturer of
the aircraft, and Malay-
sian Airlines, operator of
the plane in a Cook Coun-
ty, Illinois Circuit Court.
The petition is meant to
secure evidence of possi-
ble design and manufac-
turing defects that may
have contributed to the
dIsusLer, LIe Iuw hrm suId.
Though both Boeing
and Malaysian Airlines
were numed In LIe hIIng,
the focus of the case will
be on Boeing, Ribbecks
lawyers told reporters, as
they believe that the inci-
dent was caused by me-
chanical failure.
Our theory of the case
is that there was a fail-
ure of the equipment
in the cockpit that may
Iuve cuused u hre LIuL
rendered the crew un-
conscious, or perhaps be-
cause of the defects in the
fuselage which had been
reported before there was
some loss in the cabin
pressure that also made
the pilot and co-pilot un-
conscious, Monica Kelly,
head of Global Aviation
Litigation at Ribbeck
Law, told reporters.
That plane was actually
a ghost plane for several
hours until it ran out of
fuel.
Kelly said the conclu-
sion was made based on
experience on previous
incidents, dismissing the
possibilities of hijacking
or pilot suicide.
The lawsuit, soon to be
hIed, wouId seek mIIIIons
of dollars of compensa-
tion for each passenger
and ask Boeing to repair
ILs enLIre ;;; eeL.
TIe Iuw hrm suId IL ex-
pected to represent fami-
lies of more than 50 per-
cent of the passengers on
bourd LIe IgIL, buL de-
clined to give details on
how many families have
sought their representa-
tion in the case. Reuters
~..q ~, ~._ .. ~ ...
. . , .~. . ._ ....q :.~ e:.
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.q._.
MH370 ..e:._ .,
. ._ . . .~ ., ~~_ . ~
..:~ . .. :.. _. . e ...e:
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.~~._.. ..e:..'~
.|.:....: ...q , .
. :... .. _. e ~ _., ._~_:
. ~ ~ q .:. ._ . . ~:
~._.. ~ Ribbeck Law ...
..,.. ..e:.~~..:
.~...q:. e..._~:
_e.._~:. e_~_:.._~:.
._. .q_.. ..e:~..
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..._~: . . .~ ~.,_ e
~. .|_..,:~ q . ._eq .
. :.q._ ._ ._e. ._ .
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INTERNATIONAL BIZ
17
Myanmar Summary
S&P Cots Bruzil Credit Ruting in Blow to RoosseH
S
tandard & Poors cut
Brazils sovereign
debt rating closer
to speculative territory
last week in a blow to
PresIdenL DIImu Rousse,
wIose eorLs Lo sLIr LIe
economy from a years-
long slump have eroded
LIe counLry`s hnunces.
Brazil had its long-term
debt rating downgraded to
BBB minus, the agencys
lowest investment-grade
rating. S&P changed its
outlook to stable from
negative, meaning further
downgrades are unlikely
for now, which will come
as a relief for both politi-
cIuns In BrusIIIu und h-
nancial markets.
The move was widely
expected but the timing
surprised some investors.
As it came ahead of an
October election in which
Rousse wIII seek u sec-
ond term, the downgrade
will expose her left-lean-
ing government to further
accusations that it has
squandered the goodwill
built during a long eco-
Alonso Soto nomic boom last decade.
BruzII Ius suered Irom
slow growth that aver-
aged about 2 percent in
recenL yeurs. Rousse Ius
tried to revive the econ-
omy with tax cuts and
social spending but has
been widely criticised for
intervening too much and
resorting to sometimes
opaque accounting moves
to meet budget targets.
TIe downgrude reecLs
LIe combInuLIon oI hs-
cal slippage, the prospect
LIuL hscuI execuLIon wIII
remain weak amid sub-
dued growth in the com-
ing years, a constrained
ability to adjust policy
ahead of the October
presidential elections,
and some weakening
in Brazils external ac-
counts, S&P said.
TIe ugency suId LIuL hs-
cal credibility had been
systematically weak-
ened following cuts in
the governments main
budget target, and that
loans by state-run banks
had undermined policy
credibility and transpar-
ency.
A central bank spokes-
man declined comment
on the downgrade. A
spokesmun Ior Rousse
referred comment to the
hnunce mInIsLry, wIIcI
did not immediately re-
spond to phone calls.
TIe sIorL-Lerm eecL
oI LIe move on hnuncIuI
markets was unclear, ana-
lysts said. Some investors
could sell Brazilian assets
because of policies forc-
ing them to hold higher-
quality stocks and bonds,
while others may focus on
the fact that S&P is un-
likely to downgrade Brazil
any further.
However, S&Ps move
could prompt peers
Moodys Investors Service
and Fitch Ratings to sig-
nal they may follow with a
downgrade of their own.
The natural tendency
for markets tomorrow is
the fear that there could
be a chain reaction and
other agencies may do
the same, said Ariovaldo
SunLos, munuger oI ouL-
ing-rate assets at H Com-
mcor in Sao Paulo.
Rousse`s governmenL
has worked to restore its
credibility on budget tar-
gets in recent months, but
investors are worried that
she will resort to more
unorthodox accounting
moves and raise spending
as she seeks re-election.
Reuters
GM Sued Over Fatal Crash Tied to Ignition Defect
G
eneral Motors Co
has been hit with
what is believed
Lo be LIe hrsL wrongIuI
death lawsuit over igni-
tion switch problems
since it recalled 1.6 mil-
lion vehicles in February.
TIe IuwsuIL wus hIed
late last month in Min-
nesota state court on be-
half of three teenage girls
who were severely injured
or killed in a 2006 crash
involving a 2005 Chevy
Jessica Dye Cobalt, one of the models
GM recalled over ignition
problems.
GM announced the re-
call in February, despite
learning of problems with
the ignition switch in
2001 and issuing related
service bulletins to deal-
ers with suggested rem-
edies in 2005. GM has
apologised for how it han-
dled the recall.
The lawsuit accuses GM
of knowing about the de-
fect for a decade but fail-
Ing Lo Luke sLeps Lo hx LIe
veIIcIes or geL LIem o
the roads.
GM hid this dangerous,
life-threatening defect
from my clients and all
other Cobalt drivers for
over a decade just to avoid
the cost of a recall, said a
lawyer for the families,
Robert Hilliard of Hill-
iard Munoz Gonzales, in
a statement. GM is guilty
of betraying our trust.
A spokesman for GM,
Jim Cain, said the com-
pany would respond to
the lawsuit in due course.
Right now, our biggest
focus is on getting these
vehicles recalled as quick-
ly as we can with as little
inconvenience to custom-
ers as possible.
According to the law-
suit, the Chevy Cobalts
ignition switch suddenly
turned from the run
to accessory position,
causing the steering,
breaking and airbag sys-
tems to lose power. The
cars driver, 19-year-old
Megan Phillips, lost con-
trol of the car, which ca-
reened o LIe roud und
struck a telephone junc-
tion box and two trees,
the lawsuit said.
The crash killed Amy
Rademaker, 15, and
Natasha Weigel, 18, and
caused Phillips to sus-
tain severe injuries to her
brain and body, according
to the lawsuit.
The surviving family
members of Rademaker
and Weigel, as well as
Phillips, are each seeking
more than $50,000, said
Hilliard.
The 2006 accident oc-
curred before GMs 2009
bunkrupLcy hIIng. TIe so-
cuIIed new GM, u dIer-
ent legal entity from the
old GM, is not responsi-
ble under the terms of its
bankruptcy exit for acci-
dents or incidents arising
before July 2009. Those
claims must be brought
against what remains of
the pre-bankruptcy com-
pany.
The lawsuit, however,
names new GM as a de-
fendant.
GM has faced several
lawsuits in the wake of
the recall. It has been hit
wILI uL IeusL hve proposed
class actions by custom-
ers who say their vehicles
lost value. On Friday, the
company also was sued by
an investor who said the
recalls wiped billions of
doIIurs In vuIue o oI GM
shares.
GM has said it received
reports of 12 deaths and
34 crashes in the re-
called cars. The recall
has prompted investiga-
tions by federal prosecu-
tors and regulators, and
GM has opened its own
internal investigation.
Congress also is planning
to hold hearings over the
recall. Reuters
Myanmar Summary
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BraziI`s President BiIma Rousseff participates in the meeting of the Economic and SociaI BeveIopment
at the Planalto Palace in Brasilia.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
18
David Mayes
I
am often asked how to es-
timate the fair price to pay
for a property, stock, a busi-
ness, etc. What we really need
Lo know hrsL Is Iow we deLer-
mine the value. Once we have a
value estimate of some sort, we
can compare it to the market or
asking price to determine if it is
relatively undervalued or over-
valued. Alternatively we can use
our estimate of value to deter-
mine the level at which we place
a bid.
Value estimates generally
come in three forms. All three
stem from a similar concept
that looks at the assets future
earning potential or cash distri-
butions. The simplest is a rela-
tive approach, where we simply
compare a ratio of price to earn-
ings or price to the book value
of assets. This approach works
well for an actively traded as-
set where there is lots of easily
accessible public information
such as stocks and housing in
many developed countries. The
main drawback is that even if
an asset is relatively underval-
ued when compared to its peers
based on a P/E ratio when the
entire asset class is in a bub-
ble period, the real underlying
fundamental value may still
be quite less than the current
market price (you are still over-
paying).
A dividend discounting mod-
el of some sort is usually the
best approach to value a hold-
ing where you will be a minor-
ity shareholder, for example
a stock that pays a dividend.
While income properties use
u sIIgILIy dIerenL modeI LIe
concept is the same. You look at
the future dividends, assuming
you can determine that they are
The Basics of Valuation
likely to be stable, and discount
the stream back to obtain a net
present value. The simplest
form of this assumes constant
growth rate of dividends. Thus
you simple divide next years
expected dividend (which is this
years dividend multiplied by 1
plus the historical growth rate)
by your required return minus
the growth rate. Your required
rate of return is best estimated
by using what you could expect
to average in the long term by
roIIIng over 1z monLI hxed de-
posits. While they are low right
now, I would expect over the
coming 15 years to be able to
average a nominal return of at
least 4-5 percent, likely a little
more. I know this may be hard
to believe as we continue to
live in a near zero interest rate
world, but many Fed members
are already publicly mentioning
raising rates in the not too dis-
tant future.
A more complicated method,
in which you gain control of
an entity and thus can control
wIuL Iuppens Lo cusI ows (II
they get re-invested or distrib-
uted) is to discount the future
Iree cusI ows. ree cusI ows
are a much better proxy than
dividends, especially during
perIods wIere muny hrms ure
not paying dividends or mak-
Ing uccounLIng prohL, buL ure
cusI ow posILIve. TIe muLI Is
a bit heavy but if you are con-
templating a serious business
acquisition it is not too expen-
sive to hire someone to do this
analysis for you.
Regardless of which route you
take to arrive at an estimated
value, usually with an ongoing
concern in the long run returns
are mean reverting (this is actu-
ally a very big assumption, re-
member that many companies
fail). Thus if you buy an asset af-
ter a period of low returns when
you determine it to be trading
at a discount to its fundamen-
tal value, you will likely experi-
ence above average returns as it
swings to the other side of the
pendulum and trades at prices
above its intrinsic value. Obvi-
ously the time to sell is when the
asset is trading above its intrin-
sic value. In practice most peo-
ple invest in what they simply
believe to be good companies at
a time when they feel the econo-
my is safe and they pay little at-
Myanmar Summary
tention to value. Unfortunately
when the economy feels safe is
usually when stocks or proper-
ties are trading at premiums,
whereas when the economy is
in the gutters the value buys are
plentiful. Doing even a simple
relative valuation analysis can
prevent serious timing errors
and greatly increase the success
of your overall investing experi-
ence.
David Mayes MBA provides
wealth management servic-
es to expatriates throughout
Southeast Asia, focusing on
UK Pension Transfers. He can
be reached at david.m@fara-
mond.com. Faramond UK is
regulated by the FCA and pro-
vides advice on pensions and
taxation.
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Twitter`s vaIuation has caused a Iot of stir in the nanciaI market since Iast year. In ]anuary Twitter was one of the most
voIatiIe stocks - with wiId swings of more than 1U percent per day, Twitter`s market vaIuation was moving by biIIions of doI-
Iars. In November, Twitter went pubIic with a $2 IPU price, vaIuing Twitter at $14.2 biIIion. Now Twitter`s share prices are
about $42 per share.
R
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Myanmar-Thailand Border Trade Hits $670m
B
order trade between My-
anmar and Thailand has
reached about $680 mil-
IIon (K68 bIIIIon) LIIs hscuI
year (April-March), according
Lo omcIuI sLuLIsLIcs.
Most of the trade took place
at the Myawaddy border point
and comprise imports from
Thailand, the Customs Depart-
ment under the Ministry of
Phyu Thit Lwin Commerce, said.
Most border trade transac-
tions occurred through the
Tachilek border trading camp
in Shan State, Myawady camp
in Kayin State, and the Kaw
Thoung, Myeik, Nabule/Htikhi,
and Maw Taung camps in Tan-
inthayi Region.
The trading volume in
Myawaddy border point was
$278.5 million, while in Tachil-
eik, Kawthaung, Myeik, Htikhi
and Mawtaung border points
trade volumes were $86.15 mil-
lion, $115.2 million, $147 mil-
lion, $51.92 million and $36.7
million respectively.
Last year saw Myanmar open-
ing a host of new border trade
points with Thailand and China
in a bid to boost trade with its
neighbours. More border trade
points are on the way to be
opened such as Maila trading
camp on the Myanmar-China
border and Mese, Hpayatho-
nesu and Ponpakyin camps on
the Myanmar-Thailand border.
Myanmar has border trading
camps along the borders with
Bangladesh, China, India and
Thailand.
Myanmar Summary
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
19
Myanmar Summary
Contd. P 20...(Stock Market)
Developing Myanmars Stockmarket: Sate the Dire Need for Capital
T
he upcoming stock mar-
ket in Myanmar in 2015
is part of a comprehen-
sive capital market, which con-
sists of stocks and, in the later
stage of the capital market de-
velopment, bonds. The fun-
damental of capital market is
about organising fragmented
hnuncIuI resources In one coun-
try into a system that will fund
hnuncIuI needs oI LIe govern-
ment and business organisa-
tions and contribute to the eco-
nomic development and growth
of a country.
Like all living organisms, a
country as well as business
needs growth, and growth de-
munds cupILuI. WILIouL sum-
cient capital long-term growth
cannot be sustained. The im-
mediate question that fol-
lows is: Why not borrow such
capital from banks around the
world for development and
growth? The answer is that we
can borrow from the banks but
too much of debt (loan) is po-
tentially risky and this was the
cuuse oI 1qq; AsIun hnuncIuI
crisis.
Capital comprises both debt
(loan) and equity (share), and
their ratio must be closely
monitored and maintained at
optimal level while a business
pursues growth. This is why a
business organisation needs
not only debt (bank loan) but
also equity (stockmarket).
The most critical aspect of it is
the ratio between debt and eq-
uity known as capital struc-
ture. The optimal ratio of eq-
uity to debt is 70 to 30, which
means in every 100 percent
capital, equity is 70 percent and
debt compose the rest. Further-
more, this is the ideal capital
structure that attracts atten-
tion from the worlds most suc-
cessful investors like Warren
BueL Lo InvesL In sucI IeuILIy
companies. A company or a
country with too much debt is
like an unhealthy person carry-
ing too much fat and waiting for
disaster to strike.
All the above facts indicate
that development of Myanmars
sLockmurkeL (equILy hnuncIng)
has become critical. But do not
hold your breath for Myanmar
stockmarket yet since all devel-
opment in life takes some time.
Stockmarket capitalisation to
GDP ratio is the best yardstick
to measure depth and liquidity
(development) of stockmarket
Kyaw Myo Htoon
in a country.
Stockmarket capitalisation
is the total monetary value of
stock companies sold through
stockmarket. The more liquid
the stockmarket, the higher the
stockmarket capitalisation to
GDP ratio. For example, Singa-
pore stockmarket ratio of stock-
market capitalisation to GDP is
150 and for Thailand its around
100, while Vietnams is around
20 even after more than a dec-
ade of existence. For Zambias
stockmarket the ratio is only
14 after more than 15 years of
operation, according to World
Bank data.
Vietnams stockmarket capi-
talisation to GDP was very
minimal after they started op-
eration in 2000 and till 2005
the ratio was less than 1 percent
of GDP. The development of a
new stockmarket involves sev-
eral factors and parties such as
government, business organisa-
tions and the public.
Another example is China,
Chinas two stock exchanges
in Shanghai and Shenzhen,
launched around 1990, grew
by leaps and bounds in the
1990s. The capitalisation of the
domestic equity market rose
from virtually zero in 1990 to
$31 billion, or equivalent to 53
percent of GDP, at the end of
2000. But the poor accounting
standards, weak corporate gov-
ernance and lack of transpar-
ency made Chinas stockmarket
capitalisation ratio to slump
from its peak of 53 percent of
GDP in 2000 to below 20 per-
cent of GDP in 2005. Moreover,
Chinese authorities halt IPO
process since 2012 (term used
when a company comes for the
hrsL LIme Lo u sLockmurkeL) Ior
more than one year after series
of scandals about companies
falsifying their IPO documents
und eroded conhdence oI pubIIc
investors (retail investors).
On the other hand, Myan-
mar business organisation
dehnILIveIy needs educuLIon,
training and accountability for
raising capital through Myan-
mars stockmarket. In short,
Myanmar business organisa-
tions need practices of good
corporate governance in order
to avoid similar pitfalls as the
Chinese stockmarket.
We all should be mindful of
the old saying Rome was not
built in a day. It will take some
time for Myanmars stockmar-
ket to become a liquid market
like Vietnams. Less liquid mar-
ket means less trading (buying
and selling stock), less trading
causes low stockmarket value
(price). Therefore, even for the
same company listed in Yangon
Stock Exchange and Singapore
Stock Exchange, valuation of
the listed company in Singapore
will be higher than the company
listed in the newly-opened Yan-
gon Stock Exchange. The com-
pany listed in Singapore will
then be able to raise more capi-
tal to invest and expand their
business because of the higher
valuation.
Since new Myanmar stock-
market is not liquid, Myanmar
companies value will be less, so
the equity capital they can raise
from the stockmarket will be
limited. Consequently, Myan-
mar companies with less capital
will face hard time competing
with international businesses.
In the meantime, thriving lo-
cal business like CityMart, KBZ
Bank, Shwe Taung should be al-
lowed to get listed on overseas
stockmarket like Thailand or
Singapore while local stockmar-
ket is building up for some time.
Putting growing businesses like
KBZ Bank in startup Myanmar
stockmarket is like putting a big
hsI In u smuII pond und LIe hsI
will eventually become weak.
That is why Chinese authori-
ties allowed their SMEs to get
funding from overseas stock-
market in early 2000s when
their capital market wasnt very
liquid (they still face challenges
and problems). Their objectives
are not only for capital for the
companies but also for Chinese
companies to acquire interna-
tional practice of corporate gov-
ernance.
Only when Myanmar stock-
market becomes liquid, Cit-
yMart or KBZ can do listing in
Myanmar stockmarket again
as dual listing between Myan-
mar and Singapore. But such
holistic approach will not af-
fect development of Myanmars
new stockmarket because not
all Myanmar companies will
be able to meet the rigid list-
ing requirements of Singapore
stock market nor do they have
ample resources to restructure
their businesses to meet such
requirements. So, majority of
Myanmar companies will re-
main in Myanmar stockmarket.
The very objective of stock-
market in Myanmar is to inject
capital to Myanmars business
organisations in order to fuel
their growth that will create
more job opportunities and tax
revenue stream for the country.
Setting up a stock exchange in
Myanmar is only one of the op-
tions to raise capital for Myan-
mar business organisations and
stock exchange itself should not
be the objective.
On the other hand, authori-
ties must strive to make My-
anmar stock exchange liquid
by conducting massive public
educational campaign about
investment in public compa-
nies. Simultaneously corporate
governunce, Lrunspurency, h-
nancial education and busi-
ness related training must be
provided to business organisa-
tions so that they can prepare
to list their business on Myan-
mar stock exchange in the near
future.
Such holistic and compre-
hensive approach is the key to
success for the upcoming Stock
Exchange as well as thriving
Myanmar business organisa-
tions to stay ahead of compe-
tition. One can only capitalise
LIe benehLs oI IuLe mover ud-
vantages when they are willing
to learn from the previous mis-
takes of others.
Kyaw Myo Htoon (John) is
the managing director at My-
anmar Pinnacle Financial.
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A man walks past an advertisement board after landing at the airport in Yangon. At Yangon International airport, some of the
biggest signs in the arrivaI and departure haIIs are ones for Singapore's stock exchange, promoting the bourse as the go-to
destination for Myanmar businessmen seeking capitaI.
D
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"Not all Myanmar companies will be able to
meet the rigid listing requirements of Sin-
gapore stock market nor do they have am-
ple resources to restructure their
businesses to meet such requirements."
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
20
Myanmar Summary
From page j...(Stock Market)
Myanmar Tells Australia Its Open
for Business
Karon Snowdon
M
yanmar has extended
the welcome mat and
the world is beating a
path its door.
But not many companies from
Australia are joining the rush.
Glenn Robinson, the chair-
man of the Australia-Myanmar
Chamber of Commerce, was with
the largest commercial delega-
tion to yet visit Myanmar from
Australia.
He says even Australian min-
ing companies which are used to
workIng In deveIopIng und dIm-
cult countries are being cautious.
Theyre here learning whats go-
ing on, talking to a whole series of
people, working out who would be
sensible to work with and who it
would be sensible to avoid.
Australias Department of For-
eIgn AuIrs und Trude udvIses
caution.
Australian business still
cautious
Thats because the problems
are real theres lots of new laws
but many more are in the works,
the judicial system is untested,
LIe hnuncIuI sysLem undeveI-
oped, omce spuce Is LwIce LIe cosL
of New York City, work skills are
low and corruption remains high.
Per capita income is less than
$1,000 a year.
Trade Commissioner Mark
Wood says only 20 percent of the
country is connected to the pow-
er grId so IL`s dImcuIL Lo operuLe
a factory.
Wood says his view might be
seen as bleak but its realistic.
I think theres been some re-
porting recently about here being
a gold rush in Myanmar. I think
that is overstating the opportuni-
ties there, he said
There is a lot of potential but
there are a lot of issues that still
need to be sorted out in the coun-
Lry ... reguIuLory Issues, hnuncIuI
issues, probity issues I guess, is-
sues around corruption and brib-
ery and so on.
Austrade is especially focussing
on encouraging Australian busi-
nesses interested in education, as
well as agribusiness, oil and gas
development and infrastructure.
Bluescope Steel and Woodside
Energy were among the Austral-
ian companies showing interest
early.
Tory Shenstone has been work-
ing in Myanmar since 2008 in
her capacity as a Director of the
oil and gas service company, El-
gen Energy.
She told an Austrade business
brIehng In ebruury LIuL AsIun
companies are doing well in gain-
ing licences to explore.
Australia needs to make
decision it wants to invest

Myanmar is used to doing

business with Asian countries
and I think they might be just
having a gentle approach to do-
ing business with western coun-
tries particularly in the oil and
gas space as well, she said.
The Myanmar government
estimates its energy reserves as
high as 2.5 trillion cubic metres
of natural gas and over three bil-
lion barrels of crude oil.
Dozens oI oIsore deveIop-
ment licences are up for grabs
this year.
With some of the biggest names
in the business, Australian com-
panies, including Woodside are
lining up for a share.
OLIer counLrIes Iuve deh-
nILeIy goL In hrsL, suys RobIn-
son. Were almost at the point
now of being too late. Its no
good saying the regulations are
not good enough, well wait till
theyre changed. By the time they
are changed the Swedes, Nor-
wegians, Fins, Danes, Germans,
Italians, French, they will all be
here and well have no show of
getting in.
The signing last month of a
cooperation agreement between
the Australian Chamber and its
Myanmar counterpart should
help prospective investors, espe-
cially smaller ones.
Service industries in Myanmar
will need foreign investors but of
about thirty international banks
Lo Iuve opened omces, onIy one,
the ANZ, is Australian.
Glenn Robinson says the ANZ
has only recently opened a repre-
senLuLIve omce In Yungon.
But to get a banking licence
they will have to elbow 30 other
banks aside and those other 30
banks have been here a year and
know who to talk to and who to
stay away from.
Commercial Australia has to
make a decision it wants to in-
vesL osIore. And IL Iusn`L mude
that decision. Australian busi-
nesses have to regard themselves
as global and start operating that
way. ABC
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Br Maung Maung Iay, deputy president of UMFCCI, speaks at the Iaunch of AustraIia-Myanmar Chamber of Commerce.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
21
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International Schools Bet on
Myanmars Transition
Harrow InternationaI SchooI in Hong Kong.
H
I
S
B
Myanmar Summary
Myanmar Summary
L
eading international
schools have launched
u urry oI venLures In
Myanmar in a bet that the po-
litical risks of the fast-opening
countrys transition will be out-
weighed by an economic boom
and surging foreign arrivals.
Harrow International Man-
agement Services and Dulwich
College International have
teamed up with a company
chaired by one of Myanmars
richest men, while the British
International School plans to
open a near $20,000 a year in-
stitution in August.
The expansion ahead of elec-
LIons due nexL yeur reecLs LIe
draw of this frontier market and
a chronic lack of services that is
deterring some wealthy return-
ee Myanmar business people
and foreign executives and their
families.
Ola Natvig, a director of the
British Schools Foundation,
which is setting up the British
International School in Yan-
gon, said he foresaw a huge de-
mand in a market where there
is a small number of education-
Micahel Peel al institutions catering to the
Myanmar and expatriate elite.
When I talked to companies
they all said the same thing: We
have a real problem bringing
peopIe over Lo sLu our operu-
tions here, and a key challenge
is schools, Natvig said.
Because Myanmar has been
so closed and so suddenly
opened, what is going to be spe-
cial here is the rapid growth.
The British International
School plans to start in August
with 100-150 pupils. It will have
a purpose-built campus in two
years and expects to expand to
more than 1,000 students a few
years after that.
As well as the $19,300 annual
fees, parents will pay a $5,000
enrolment charge, of which
$1,500 is refundable if they give
three months notice of their
departure.
Dulwich College International
and Harrow International Man-
agement Services have chosen
u dIerenL, und more cuuLIous,
route by partnering Yoma Stra-
tegic Holdings, a Singapore-
listed conglomerate whose larg-
est shareholder is Serge Pun,
LIe IIgI-prohIe Myunmur en-
trepreneur.
The bulk of the funding for
Harrows early years venture
and the $40 million Dulwich
College school neither of
which will initially be branded
with the British institutions
names will come from Yoma
and other Serge Pun-linked
companies.
Dulwich, whose alumni in-
clude Tin Tut, deputy to the
1940s prime minister, Aung
San, Aung San Suu Kyis fa-
ther, said the target market was
not just westerners, but also
wealthy Myanmar nationals
and expatriates from countries
that have moved in more quick-
ly commercially than some of
their US and European coun-
terparts.
We see in particular Japa-
nese, Korean and Chinese mas-
sively coming into Myanmar,
said Christian Guertler, chief
execuLIve omcer oI DuIwIcI
College International, which is
due to open its seventh school
in Asia in Singapore in August.
Myanmar is one of the rising
stars in Asia and its certainly
one oI LIe counLrIes LIuL hLs our
longstanding strategic goals.
Harrow did not respond to a
request for comment.
While big western multina-
tionals, including Coca-Cola,
Unilever and British American
Tobacco, have launched or re-
started operations in Myanmar
after western sanctions were
eased, others have held back, to
the frustration of some govern-
menL omcIuIs In LIe cupILuI Nuy
Pyi Taw.
Foreign businesses complain
of property shortages and soar-
ing rental prices, while the lack
of high-quality hospitals means
muny expuLrIuLes y Lo Bungkok
for emergencies, complex oper-
ations and maternity care.
Some companies are nervous
about the political situation,
wILI InLernuI conIcLs conLInu-
ing in parts of the country and
questions remaining about the
intentions of the quasi-civilian
government that took power
three years ago after decades of
military dictatorship.
Andrew Rickards, Yomas
cIIeI execuLIve omcer, suId Ie
was comfortable with the ex-
pected $36 million investment
the company is making in the
international schools and a pri-
vate local school, even though
Myanmar was probably on
the cusp politically and could
go either way once next years
deadline for elections passed.
If there is a military govern-
ment that might not look so
good, he said. We dont think
there will be. FT
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Ambassador Suggests Thai Investors Look for Opportunities in Myanmar
T
he Thai Ambassador to
Myanmar has suggested
that Thai investors shift
focus to the Myanmar market
as more developed countries
have shown a great deal of in-
terest in the country.
Pisanu Suvanajata said My-
anmar nowadays is more open
to the world than it has been in
LIe pusL; moreover, Myunmur
politics is becoming more and
more stabilised, resulting in ris-
Thammarat Pramotmaneerat ing foreign direct investments
in the country as evinced by
the fact that two Asian powers,
Japan and Korea, have already
shown their presence there.
Thailand needs to seize this
opportunity by investing more
in its own neighbouring coun-
try, said the ambassador.
Myanmar has also made it
easier for foreign entrepreneurs
by restructuring its investment
poIIcIes, oerIng prIvIIeges und
benehLs us weII us proLecLIon Lo
investors.
As Myanmar has been improv-
ing its basic infrastructure and
computer system, the ambas-
sador said Thai investors have
as good a chance as anyone else
Lo be successIuI In Myunmur;
especially in three industries:
hotel, beauty and health.
Insurance sector also has po-
tential, given that the purchas-
ing power of the locals has been
increasing steadily for the past
years, he said.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
INVESTMENT & FINANCE
22
Myanmar Summary
An Introduction to Fine Wine Investments
F
ine wine investments have
become a global phenom-
enon. Shrewd investors
seeking more safety than stocks
and commodities coupled with
IIgIer prohLs LIun LIeIr Iow
yielding bonds and banks have
hnuIIy dIscovered LIe IIgIIy Iu-
cruLIve und prohLubIe hne wIne
market.
Some of the most renowned
and expensive wines in the
world, such as the Chateau
uhLe RoLIscIIId Ior exumpIe,
started turning investors heads
as the En-Primeur (meaning
the wine was not bottled at that
stage) 2008 vintage increased
in price by almost 150 percent
throughout 2009. Such aston-
ishing returns in such short
time are simply not possible
in any other market, especially
with such a low level of risk.
However, not all stocks in-
crease by such staggering lev-
els, but only a distinct selection
oI LIe worId`s hnesL und mosL
luxurious wines. Most impor-
LunLIy, IL Is u sound hnuncIuI
investment and investors can-
not lose their money as it is a
tangible asset which can be sold
at any time in the global wine
market.
These high worth luxury wines
are valuable tangible assets in a
highly liquid market, and the
importance of stock selection
remains crucial. Maximum re-
turns can only be achieved by
sourcing the right wine at the
right time (and the right price)
and similarly, knowing exactly
wIen Lo seII Lo opLImIse prohLs.
The reason for the current ex-
plosion in popularity and the
rIsIng prIces oI hne wIne Is sIm-
pIe economIcs; busIc suppIy und
demand. The ever-increasing
global demand for such high
end hne wInes (nowuduys uIso
called blue-chip wines) and
the very limited supply thereof,
make these wines very rare and
dImcuIL Lo obLuIn; LIereIore LIe
Robin Khanna need and requirement for pro-
fessional advice and market
reach/scope. It is important to
point out that the most expen-
sive and prestigious Bordeaux
Chateaux in the world only pro-
duce a very limited amount of
their wines each year. That is
because French law strictly reg-
ulates and controls their output,
which means that they are not
allowed to produce more than
LIeIr gIven uIIocuLIon; Ience LIe
rarity factor and a reason why
these luxury products have be-
come so desirable for the rich-
est people in the world.
Imagine there are only a cer-
tain number of bottles of a cer-
tain blue-chip wine. Someone,
somewhere will open the bottle
and enjoy it, meaning that the
number of available bottles of
that particular wine and vin-
tage will decrease. As a conse-
quence, the price for that par-
LIcuIur wIne cun onIy Increuse;
especially if it is a good vintage
and has been scored and graded
accordingly.
or some InvesLors, hne wInes
have literally become a rescue
investment. Even conservative
investors who dont like to take
too much of a risk have been
astonished with the returns
achievable through intelligent
und cureIuI hne wIne InvesLIng.
Moreover, we always recom-
mend that our investors dedi-
cuLe u purL oI LIeIr hnuncIuI
porLIoIIo InLo hne wIne. SIrewd
InvesLors know LIuL dIversIhcu-
tion is key and the idea of not
putting all your eggs in one
basket has been fundamental
to successfully investing your
own money. Numbers and facts
speak for themselves and all
data and past performance his-
Lory on hne wIne InvesLmenLs
cun be Lruced und verIhed; LIuL
is why we recommend that our
investors do some of their own
research into the market, to get
a comfortable feel for the indus-
try. Furthermore, most inves-
tors have come back for more
once it became clear what kind
of lucrative returns are achiev-
ubIe In LIe hne wIne InvesLmenL
market.
However, it is also very im-
porLunL Lo poInL ouL LIuL hne
wines are usually a medium to
long term investment. A mini-
mum of 2-3 years must be an-
ticipated in order to achieve the
highest possible returns, which
does not seem to be an issue, es-
pecially for HNIs. When trying
this market with the minimum
required investment capital,
most investors tend to stock up
again during their initial invest-
ment term when realising how
their wine portfolios are grow-
ing in value.
There are also opportuni-
ties for short-term gains in the
Bordeaux Futures market (En-
Primeur), but those are obvi-
ously coupled with higher risk
and for our more speculative
clients.
Robin Khanna is managing
director at Bordeaux Traders,
c jne uine intestment broler-
age house.
B
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Infrastructure And Accessibility Myanmars Stumbling Blocks
T
ourism is one of the seven
priority areas for infra-
structure development in
Myanmar as the surge of arriv-
als in recent times threatens to
overwhelm the countrys exist-
ing capacity.
Speaking at Myanmar Infra-
structure Summit 2014 in Trad-
ers Hotel, Yangon, Hlaing Maw
Oo, project director of Ministry
of Hotels and Tourism, said: Ac-
cessibility is the most important
Sid Dhartha for the tourism sector and thus
investors need to look at (putting
their money there). Since the last
two years, the number of inter-
nuLIonuI uIrIInes yIng dIrecLIy
to Myanmar is increasing rapidly
but when we say accessibility,
we also need to think about bet-
ter road conditions. Our current
road conditions are not favour-
able for tourism and infrastruc-
ture development needs to be
upgraded.
Infrastructure such as hotels,
electricity, telecommunications
and water supply were other ar-
eas Myanmar urgently needs to
improve, he added.
As the huge number of tourists
ockIng Lo Myunmur, we need Lo
improve our hotels services and
increase the number of hotels in
our country In terms of product
development, we need to make
sure attractions are easy to ac-
cess and tourist-friendly, Hlaing
Maw Oo said.
Currently, three major air-
ports are slated to undergo ren-
ovation and construction works
Yangon International Airport,
Mandalay International Airport
and Hanthawaddy Internation-
al Airport.
In order to solve the hotel
shortages in the country, the
ministry aims to issue more ho-
LeI IIcences In dIerenL desLInu-
tions, though mostly in Yangon,
Mandalay, Bagan and Inle.
Figures from the ministry as
of December 2013 shows that
Myanmar has 923 licenced ho-
tels and approximately 34,834
rooms throughout the country.
Myanmar Summary
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
PROPERTY & REAL ESTATE
23
Myanmar Summary
Green Living on The Rise in Myanmar
Real estate marketplace House.com.mm predicts growth in eco-friendly property listings
M
yanmars online real
estate marketplace,
House.com.mm, said
it predicts strong growth in the
number of eco-friendly prop-
erties listed on its platform
following the publication of
a report outlining green con-
struction trends.
The most recent World Green
Building Trends report from
industry intelligence company
McGraw Hill said 51 percent of
the worldwide construction in-
dustry expects to be developing
more than 60 percent of their
properties in an eco-friendly
way by 2015, compared with
only 28 percent of industry
hrms IoIdIng LIIs expecLuLIon
in 2012.
The most substantial increas-
es in green construction activity
are expected to be seen in the
emerging markets more than
doubling their green construc-
tion activity by 2015, the report
said.
Currently, the 31 percent
average construction rate for
green housing in South Asia,
where House.com.mms parent
company Lamudi operates, is
higher than the global average
of 28 percent.
Michiel Bakker, Myanmar
country manager at House.
com.mm, which was launched
in May 2012 in Myanmar and
Phyu Thit Lwin
oers seIIers, buyers, IundIords
und renLers u pIuLIorm Lo hnd
homes, land and commercial
properties online, said: The
hndIngs oI LIIs reporL conhrm
what we already believe that
demand for green living is not
just a Western but a global
trend.
The fact that the construc-
tion of green housing in emerg-
ing markets is due to double
by 2015 makes it easy for us to
predict that the number of eco-
friendly property listings on our
platform will increase exponen-
tially in the coming years.
Bakker said the green con-
struction trend has already
established itself in the Mexi-
can property market, where
the availability of eco-friendly
properties has increased dra-
matically since the introduction
of Green Mortgage Programs in
2007, which made eco-friendly
properLy uordubIe Ior u mucI
larger share of the population.
We can only expect that in a
short time this will be replicat-
ed in Myanmar, Bakker said.
However, the real estate mar-
ketplace said government will
play a crucial role in the de-
velopment while Myanmar is
frequently touted as one of the
most promising markets in Asia
which has potential to boom as
Asias next real estate giant.
Foreign companies already
have to meet strict environmen-
tal regulations to be allowed
into some industrial zones in-
cluding controlling emission
generated and correctly treat-
ing wastewater.
Bakker said: For Myanmar
and large cities as Yangon and
Mandalay it is important to act
now. We have seen in other
markets Lamudi is operating
in that green planning policies
should be implemented at an
early stage. In Indonesia we
have seen a lack of eco-friendly
urban planning, while real es-
tate developments have rock-
eted.
Yangon is currently among
South Asias greenest cities and
policy should be shaped to pre-
serve this status. Thereby we
see a huge potential for green
World Green Building Trends
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development in renovating the
numerous often ran-down
historic buildings.
House.com.mm is part of
German online startup incuba-
tor Rocket Internets real estate
platfroms, which are globally
branded by the name Lamudi.
Besides House, in Myanmar
Rocket Internet operates the
platforms Motors.com.mm,
Ads.com.mm, Work.com.mm
and Kaymu.com.mm.
Myunmur to Luonch CHB Brunch Omces in Mujor Cities
T
he Construction
and Housing De-
velopment Bank
(CHDB) will open 12 new
branches in the major cit-
ies in Myanmar in a bid to
provide cheap capital for
house buyers, the banks
omcIuIs suId.
CHDB provides long-
term personal loans for
Pann Nu buying houses, condos
and apartments. The
bank said that loans are
also available for local
consLrucLIon hrms und
land owners who do not
have enough funds to
build their own houses.
Under the supervision
of the Ministry of Con-
struction, our bank was
founded after combining
the shares of government
and constructors. Later,
we will make sure so
that everyone can get in-
volved, said CHDBs vice
chairman U Thein Zaw.
CHDB, directly super-
vised by the Ministry
of Construction, was li-
censed by the Central
Bank of Myanmar last
July. It was launched with
an initial capital of K100
billion ($103 million).
The banks branch of-
hces wIII be opened In
respective states and re-
gIons durIng LIe hscuI
year 2014-2015. Its Nay
PyI Tuw omce opened In
March and the Mandalay
branch is expected to be
opened in May.
Myanmar Summary
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CHBBsaid that Ioans are aIso avaiIabIe for IocaI construction rms
and land owners.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
24
Myanmar Summary
PROPERTY & REAL ESTATE
Myanmar Summary
Sekisui House Agrees to Buy Tokyo Property for $720m
Land prices up in big Japan cities for 1st time in 6 years
Junko Fujita
J
apans Sekisui House Ltd
Is buyIng un om ce Lower In
central Tokyo for 74 billion
yen ($720 million), as property
prices rise to levels that allow
lenders to recoup losses from
a bust that followed the global
hnuncIuI crIsIs.
The Osaka-based home
builder has agreed to buy the
20-storey, 41-year-old Kokusai
Akasaka Building in an upscale
commercial and business dis-
trict, according to four people
briefed on the deal. The tower is
IurgeIy occupIed by um IIuLes oI
NTT DoCoMo Inc, Japans larg-
est mobile phone operator.
TIe deuI conhrms LIe ongoIng
revival in Tokyos prime com-
mercial property market after
an ill-fated series of highly lev-
eraged investments that failed
spectacularly after a 2006-2007
real estate boom collapsed.
The value of the Kokusai Aka-
saka property had cratered after
it was bought in 2006 by then-
aggressive property investor KK
daVinci Holdings for about 100
bIIIIon yen, uImosL enLIreIy h-
nanced by debt.
Another daVinci property,
un IconIc om ce Lower In souLI-
central Tokyos Shiba district,
was bought last year by a group
including United States insur-
ance magnate Maurice Hank
Greenbergs CV Starr & Co and
AsIu PucIhc und.
Investors are returning to
the property market in Japan,
where Prime Minister Shinzo
Abes aggressive government
spending and loose-money
policies have started to pull the
economy out of 15 years of de-
uLIon.
Land prices in Japans three
largest cities Tokyo, Osaka
und Nugoyu - rose Ior LIe hrsL
time in six years last year and
declines slowed elsewhere, a
government survey showed in
March.
The debt behind the 2006
Kokusai Akasaka deal was pack-
aged into 97.5 billion yen of
commercial mortgage-backed
securities arranged by Lehman
Brothers, the investment bank
whose failure triggered the
global crisis.
When the market collapsed in
2008, investors could not make
payments on the loans and the
buildings ownership shifted to
a group of lenders.
A Sekisui House spokesman
declined to comment.
The company largely relies on
housing property for its reve-
nue, earning just 2.4 percent of
its 1.8 trillion yen in sales from
om ce properLIes IusL yeur.
It owns the Osaka landmark
Hommachi Garden City, To-
kyos Garden City Shinagawa
Gotenyama and the Ritz-Car-
ton, Kyoto building in Japans
ancient capital of Kyoto.
Reuters
.,.- Sekisui House Ltd
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Prime Om ce Rentul Growth in Asiu Pucic Led By Sootheust Asiun Cities
Yasumasa Hisada
S
outheast Asian cities led
prIme om ce renLuI growLI
in the fourth quarter of
2013, most notably a recovery
in Singapore, according to the
latest index from Knight Frank.
The international real estate
hrm uIso poInLs ouL growLI In
Jakarta and in Bangkok despite
uncertainty due to unrest in the
Thai capital.
Overall Knight Franks Asia
PucIhc PrIme Om ce RenLuI n-
dex edged up 0.8 percent and
only six markets saw rental de-
clines over the period, as net ab-
sorption bounced back, increas-
ing 19 percent on the previous
quarter to give a strong end to
the year.
The index now sits 3.1 per-
cent above its pre-crisis peak of
2008 and 13 of the 19 prime of-
hce murkeLs Lrucked suw prIme
rents increase or remain steady
in the last three months of 2013.
Region wide vacancy rate in-
creased slightly to 12 percent on
LIe buck oI sIgnIhcunL consLruc-
tion completions.
Jakarta and Tokyos Grade-A
om ce murkeLs suw 8.q percenL
and 4.2 percent rental growth
respectively, the two highest
growth rates in the region over
the quarter and in Bangkok
Grade-A rents grew by 1.7 per-
cent over the quarter.
The index report says that al-
though the uncertainty caused
by ongoing events in Bangkok
is likely to soften demand over
the coming months, the lack of
new supply is likely to underpin
further rental growth in 2014.
Jakarta is likely to see contin-
ued rental growth, the report
points out that the upcoming
eIecLIon und sIgnIhcunL new
supply coming to the mar-
ket in 2014 are likely to slow
this growth over the coming
months.
Elsewhere in Southeast Asia,
Malaysia and Vietnam look to
be at the bottom of cycle, and
while there is a feeling that
things can only get better in Vi-
eLnum, LIe KuuIu umpur om ce
market is likely to remain slug-
gish, with a high vacancy rate.
Recovery In LIe om ce mur-
ket continued in Tokyo, as
prime rents increased 4.2 per-
cent, with corporate earnings
boosted, leasing activity up and
vacancy rates down across all
wards.
The report also says that Chi-
nas slowdown has led to mixed
performance across its Tier-1
cities. Beijing and Guangzhou
saw prime rents soften slight-
ly while Shanghai saw rents
increased by 0.7 percent, al-
LIougI LIe sIgnIhcunL umounL
of new supply scheduled be-
tween 2014 and 2020 continues
to fuel worries of future over-
supply in some areas.
Meanwhile, Hong Kong cen-
LruI om ce renLs Iuve conLInued
to soften as occupiers remain
costs conscious and net absorp-
tion remains subdued. Looking
Iorwurd, Grude-A om ce IeusIng
is set to remain stable through-
out 2014.
India saw rental stagnation in
the three main cities tracked,
wILI economIc dIm cuILIes und
the upcoming election continu-
ing to cause some uncertainty.
Knight Franks inaugural Real
Estate Sentiment Index showed
that stakeholders are sceptical
and anticipate a contraction
in demand over the next six
months.
Australia continued to see the
rental market soften with rising
incentives in all major CBDs.
With GDP growth below trend
and the investment phase of the
mining boom having passed its
peak, a key concern is how the
country can encourage broader
based growth.
While the global economy is
showing more green shoots of
recovery, with a strengthening
of western economies likely to
stimulate multinational occu-
pier demand in the region, the
tightening of monetary condi-
tions still poses a threat in cer-
tain markets, said Nicholas
Holt, Knight Frank head of re-
seurcI Ior AsIu PucIhc.
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An ofce space in Bangkok.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
AUTOMOBILE
25
Myanmar Summary
Myanmar Summary
Astra says Indonesia can be
SE Asias top car market in 2 yrs
I
ndonesias auto market will
probably overtake Thailand
as Southeast Asias biggest
in 1-2 years, the CEO of its big-
gest auto distributor PT Astra
International said.
Prijono Sugiarto also predict-
ed that total Indonesian sales
next year could hit 1.4 million
uILer beIng rougIIy uL LIIs
year, and he expects a growing
share to be so-called low cost
green cars (LCGC), which his
countrys car makers started
producing last year.
For LCGC, we are trying to
increase production facilities.
We are now at about 10-12,000
units per month. That would be
nice to increase to 15-20,000
per month, he told the Reuters
ASEAN Summit.
The chief of Astra Interna-
tional noted that car penetra-
tion in Indonesia is still only 40
cars per thousand people in a
country whose population tops
240 million. The fast emerging
middle class is the chief target
for LCGC cars.
Sugiarto also predicted that
total Indonesian auto sales
could be 1.4 million vehicles in
2015, which would be a 17 per-
cent increase from about 1.2
million this year. Low-cost cars
could account for up to 20 per-
cent of sales this year, he added.
Astra, Indonesias biggest
listed company by market capi-
talisation, distributes cars for
Toyota, Daihatsu and Honda,
and is controlled by Singapore-
Fathiyah Dahrul and
Andjarsari Paramaditha
listed Jardine Cycle & Carriage
Ltd.
Astra accounts for more than
50 percent of all auto sales in
Indonesia.
Eyei ng new mar kets
Around 15-20 percent of As-
tras car production is exported
to other Southeast Asian coun-
tries, as well as the Middle East,
South Africa, Mexico and Ven-
ezuela.
Indonesia aim to eventually
supplant Thailand as Southeast
Asias biggest automotive pro-
duction base. Investors from
South Korea and Japan are
bullish about the outlook for the
Indonesian industry, according
to Mahendra Siregar, head of
the countrys investment board.
Astra also said it is eyeing ex-
pansion to Cambodia, Myan-
mar and Vietnam, focusing on
uuLomoLIve und hnuncIuI-ser-
vices industries.
We have a special team to
evaluate business opportunities
in Myanmar, Cambodia and Vi-
etnam, Sugiarto said.
Jardine Cycle & Carriage has
entered Myanmar as a distribu-
tor for Mazda and Mercedes
Benz.
Jemmy Paul, head of invest-
ment at Jakarta-based Sucorin-
vest Asset Management, said
sales to other ASEAN countries
should drive Astras revenue
higher.
I think the idea of export-
ing the (LCGC) cars is already
considered since the Japanese
principals have made a huge
investment in Indonesia, said
Paul.
AsLru`s hnuncIng busIness PT
Astra Sedaya Finance plans to
sell 2 trillion rupiah ($175.55
million) in bonds and seek bank
loans totalling $330 million as
purL oI ILs hnuncIng expunsIon
this year. Another unit, Federal
International Finance, plans to
issue three-year bonds worth
1.55 trillion rupiah next month.
The room for improvement in
LIe hnuncIng busIness remuIns
there, however, we believe the
impact to the ASII auto division
performance will be limited,
said Frederick Daniel, an equity
analyst at Trimegah Securities.
Nonetheless, it is worth not-
Ing LIuL hnunce dIvIsIon eurn-
ings contributed 22 percent of
ASIIs total earnings in 2013.
Reuters
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Mazda to Launch Car Workshop in Yangon
J
apanese automaker Maz-
da is planning to launch an
auto workshop in Yangon
Kyaw Min this year, a spokesperson of the
companys local partner said.
The workshop will be open
within this year on Ywama
Kyaung Road, Insein township,
Yangon, said Thet Su Mon, Cy-
cle & Carriage Automobile My-
anmar (CCAM) Co Ltd, which is
also the dealer of German car-
maker Mercedes Benz in My-
anmar. CCAM is Mazdas sole
distributor of its spare parts in
Myanmar.
Mazda has recently bolstered
ILs murkeLIng eorLs In Myun-
mar through organising Family
Road Show and Test Drive pro-
grams in Yangon.
L oered ILs curs by InsLuI-
ment in February in the coun-
try, where a customer have to
pay 20 percent of a cars price
as down payment and the rest
can be settled through Ayeyar-
wady Bank by instalments.
Mazdas opened its temporary
showroom in Yangon on Kaba
Aye Pagoda road, Bahan town-
ship last November. Mazda
CX, CXq, Muzdu 6, Muzdu
und MX modeIs ure currenLIy
sold there.
Established in 1920, Mazda
Motor Corp is now ranked as
the 15
th
largest automaker by
production in the world, with
an annual sale of nearly 1.3 mil-
lion vehicles.
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A saIeswoman taIks to customers at a Nissan deaIership in ]akarta.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
26
INTERNATIONAL AND DOMESTIC FLIGHT SCHEDULE
Fliggh htss ffroom Yanggon (RGNN) to Bangkok ((BKK) Fliggh htss ffroom Banggkok (BKKK) to Yaangon (RGN)
Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by:
PG 706 1 2 3 4 5 6 7 RGN BKK 7:15 9:30 Bangkok Airways DD4230 1 2 3 4 5 6 7 DMK RGN 06:30 07:55 NOK Airlines
DD4231 1 2 3 4 5 6 7 RGN DMK 8:00 9:45 NOK Airlines 8M336 1 2 3 4 5 6 7 BKK RGN 6:40 7:25 MAI
FD2752 1 2 3 4 5 6 7 RGN DMK 8:30 10:15 Thai AirAsia FD2751 1 2 3 4 5 6 7 DMK RGN 7:15 8:00 Thai AirAsia
8M335 1 2 3 4 5 6 7 RGN BKK 8:40 10:25 MAI TG303 1 2 3 4 5 6 7 BKK RGN 8:00 8:45 Thai Airways
TG304 1 2 3 4 5 6 7 RGN BKK 9:50 11:45 Thai Airways PG701 1 2 3 4 5 6 7 BKK RGN 8:50 9:40 Bangkok Airways
PG702 1 2 3 4 5 6 7 RGN BKK 10:45 12:40 Bangkok Airways FD2755 1 2 3 4 5 6 7 DMK RGN 11:35 12:20 Thai AirAsia
Y5-237 1 2 3 4 5 6 7 RGN BKK 18:05 19:50 Golden Myanmar Airlines PG707 1 2 3 4 5 6 7 BKK RGN 13:40 14:30 Bangkok Airways
TG302 1 2 3 4 5 6 7 RGN BKK 14:45 16:40 Thai Airways Y5-238 1 2 3 4 5 6 7 BKK RGN 21:10 21:55 Golden Myanmar Airlines
PG703 1 2 3 4 5 6 7 RGN BKK 15:20 17:15 Bangkok Airways FD2753 1 2 3 4 5 6 7 DMK RGN 16:35 17:20 Thai AirAsia
8M331 1 2 3 4 5 6 7 RGN BKK 16:30 18:15 MAI PG703 1 2 3 4 5 6 7 BKK RGN 16:45 17:35 Bangkok Airways
FD2754 1 2 3 4 5 6 7 RGN DMK 17:50 19:35 Thai AirAsia TG305 1 2 3 4 5 6 7 BKK RGN 17:55 18:40 Thai Airways
PG704 1 2 3 4 5 6 7 RGN BKK 18:25 20:20 Bangkok Airways DD4238 1 2 3 4 5 6 7 BKK RGN 19:30 20:15 NOK Airlines
TG306 1 2 3 4 5 6 7 RGN BKK 19:40 21:35 Thai Airways 8M332 1 2 3 4 5 6 7 BKK RGN 19:20 20:05 MAI
DD4239 1 2 3 4 5 6 7 RGN DMK 21:00 22:45 NOK Airlines PG705 1 2 3 4 5 6 7 BKK RGN 20:00 21:15 Bangkok Airways
FFliggh htss ffroom m Yangoon (RGN)) to Chiaang Maii (CNX) FFliggh htss ffroom m Chiangg Mai (CCNX) to YYangon (RGN)
W9-9607 4 7 RGN CNX 14:50 16:20 Air Bagan W9-9608 4 7 CNX RGN 17:20 17:50 Air Bagan
Flligghtss ffroom Yanggon (RGNN) to Sinngapore (SIN) Flligghtss ffroom Singaapore (SIN) to Yangon ((RGN)
Y5-233 1 2 3 4 5 6 7 RGN SIN 10:10 14:40 Golden Myanmar Airlines Y5-234 1 2 3 4 5 6 7 SIN RGN 15:35 17:05 Golden Myanmar Airlines
MI509 1 6 RGN SIN 0:25 5;00 SilkAir SQ998 1 2 3 4 5 6 7 SIN RGN 7:55 9:20 Singapore Airline
8M231 1 2 3 4 5 6 7 RGN SIN 8:30 13:00 MAI 8M6231/3K585 1 3 4 5 6 SIN RGN 9:10 10:40 Jetstar Asia
SQ997 1 2 3 4 5 6 7 RGN SIN 10:25 14:45 Singapore Airline 8M232 1 2 3 4 5 6 7 SIN RGN 14:10 15:40 MAI
8M6232/3K586 1 3 4 5 6 RGN SIN 11:30 16:05 Jetstar Asia MI518 1 2 3 4 5 6 7 SIN RGN 14:20 15:45 SilkAir
8M233 5 6 7 RGN SIN 13:45 18:15 MAI 8M235 5 6 7 SIN RGN 19:15 20:45 MAI
TR2827 1 6 7 RGN SIN 15:10 19:35 TigerAir TR2826 1 6 7 SIN RGN 13:00 14:30 TigerAir
TR2827 2 3 4 5 RGN SIN 17:10 21:35 TigerAir TR2826 2 3 4 5 SIN RGN 15:00 16:30 TigerAir
MI517 1 2 3 4 5 6 7 RGN SIN 16:40 21:15 SilkAir MI520 5 7 SIN RGN 22:10 23:35 SilkAir
FFliightts frromm Yangonn (RGN) tto Kualaa Lumpuur (KUL) Fligghtts frro om m Kuala LLumpur (KUL)too Yangonn (RGN)
AK1427 1 2 3 4 5 6 7 RGN KUL 8:30 12:50 AirAsia AK1426 1 2 3 4 5 6 7 KUL RGN 6:55 8:00 AirAsia
8M501 1 2 3 4 5 6 7 RGN KUL 8:55 12:55 MAI MH740 1 2 3 4 5 6 7 KUL RGN 10:05 11:15 Malaysia Airlines
MH741 1 2 3 4 5 6 7 RGN KUL 12:15 16:30 Malaysia Airlines 8M502 1 2 3 4 5 6 7 KUL RGN 14:00 15:00 MAI
Fligghtts frrom Yanngon (RGGN) to HHanoi (HHAN) Fligghtts frrom Hannoi (HANN) to Yanngon (RRGN)
VN956 1 3 5 6 7 RGN HAN 19:10 21:30 Vietnam Airlines VN957 1 3 5 6 7 HAN RGN 16:35 18:10 Vietnam Airlines
Flliggh htss ffroom m Yangon (RGN) to Ho CChi Minhh (SGN) Flliggh htss ffroom m Ho Chii Minh (SSGN) to Yangonn (RGN)
VN942 2 4 7 RGN SGN 14:25 17:10 Vietnam Airlines VN943 2 4 7 SGN RGN 11:40 13:25 Vietnam Airlines
Flligghtss ffrom Yanngon (RGGN) to TTaipei (TTPE) Flligghtss ffrom Taipei (TPEE) to Yanngon (RGN)
CI7916 1 2 3 4 5 6 RGN TPE 10:50 16:10 China Airline CI7915 1 2 3 4 5 6 7 TPE RGN 7:15 10:05 China Airline
BR288 2 5 6 RGN TPE 11:35 17:20 EVA Air BR287 2 5 6 TPE RGN 7:30 10:35 EVA Air
Flliggh htss ffroom Yanggon (RGNN) to Kunming(KMG) Flliggh htss ffroom Kunmming(KMMG) to Yangon ((RGN)
CA906 2 3 4 6 7 RGN KMG 14:15 17:35 Air China CA905 2 3 4 6 7 KMG RGN 12:40 13:15 Air China
MU2032 1 2 3 4 5 6 7 RGN KMG 14:40 17:55 China Eastern MU2031 1 2 3 4 5 6 7 KMG RGN 13:30 14:00 China Eastern
MU2012 3 6 RGN KMG 12:20 18:10 China Eastern (via NNG) MU2011 3 6 KMG RGN 8:25 11:30 China Eastern (via NNG)
Flligghtss from Yanngon (RGGN) to BBeijing (BJS) Flligghtss from Beijjing (BJSS) to Yanngon (RRGN)
CA906 2 3 4 6 7 RGN BJS 14:15 21:55 Air China (via KMG) CA905 2 3 4 6 7 BJS RGN 8:05 13:15 Air China (via KMG)
Fliggh htss ffroom Yanggon (RGNN) to Naanning (NNG) Fliggh htss ffroom Nannning (NNNG) to Yaangon ((RGN)
Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by:
MU2012 3 6 RGN NNG 12:20 16:25 China Eastern MU2011 3 6 NNG RGN 10:15 11:30 China Eastern
FFliggh htss ffroom m Yangoon (RGN)) to Honng Kong (HKG) HHonng g KKoong (HKG) Flights from Yaangon ((RGN)
KA251 1 2 4 6 RGN HKG 1:10 5:35 Dragon Air KA250 1 3 5 7 HKG RGN 21:50 23:45 Dragon Air
*PPleaasee noote thee dday change for the deparrture time too Hong Kongg.
Flliggh htss ffroom m Yangon (RGN) to Guanng Zhouu (CAN) Flliggh htss ffroom m Guang Zhou (CCAN) to Yangonn (RGN)
8M711 2 4 7 RGN CAN 8:40 13:15 MAI CZ3055 3 6 CAN RGN 8:40 10:30 China Southern Airlines
CZ3056 3 6 RGN CAN 11:20 15:50 China Southern Airline 8M712 2 4 7 CAN RGN 14:15 15:45 MAI
CZ3056 1 5 RGN CAN 17:40 22:15 China Southern Airline CZ3055 1 5 CAN RGN 14:45 16:35 China Southern Airlines
FFlighhts ffroom Yanggon (RGN) to Koolkata (CCCU) FFlighhts ffroom Kolkkata (CCUU) to Yaangon (RRGN)
Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by:
AI228 5 RGN CCU 18:45 19:45 Air India AI227 1 5 CCU RGN 10:35 13:20 Air India
AI234 1 5 RGN CCU 13:40 16:55 Air India (via GAY) AI233 5 CCU RGN 13:30 18:00 Air India (via GAY)
Fliggh htss ffrom Yanngon (RGGN) to GGaya (GAAY) Fliggh htss ffrom Gayya (GAY) to Yanngon (RGGN)
8M 601 1 3 5 6 RGN GAY 10:30 11:50 MAI 8M 602 1 3 5 6 GAY RGN 12:50 16:00 MAI
AI234 1 5 RGN GAY 13:40 15:00 Air India AI233 5 GAY RGN 15:00 18:00 Air India
Fligghtts frrom Yanngon (RGGN) to TTokyo (NNRT) FFliightts frrom Tokkyo (NRTT) to Yaangon (RRGN)
NH914 1 3 6 RGN NRT 22:00 06:40+1 ALL NIPPON Airways NH913 1 3 6 NRT RGN 11:10 17:05 ALL NIPPON Airways
FFliggh htss ffrom Yanngon (RGGN) to SSeoul (ICCN) FFliggh htss ffrom Seooul (ICN)) to Yanngon (RGGN)
KE472 1 3 5 7 RGN ICN 0:05 8:00 Korean Air KE471 1 2 3 4 5 6 7 ICN RGN 18:40 22:55 Korean Air
OZ7463 4 7 RGN ICN 0:50 8:50 Asiana OZ4753 3 6 ICN RGN 19:30 23:40 Asiana
Flligghtss ffrom Yanngon (RGGN) to DDoha (DOOH) Flightts frrom Dohha (DOH) to Yangon (RRGN)
QR619 1 2 3 4 5 6 7 RGN DOH 8:00 11:45 Qatar Airways QR618 1 2 3 4 5 6 7 DOH RGN 21:05 06:29+1 Qatar Airways
Flliggh htss ffroom m Yangon (RGN) to Nay Pyi Taww (NYT) Flliggh htss ffroom m Nay Pyyi Taw (NNYT) to Yangonn (RGN)
Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by:
FMI-A1 1 2 3 4 5 RGN NYT 7:30 8:30 FMI Air Charter FMI-A2 1 2 3 4 5 NYT RGN 8:50 9:50 FMI Air Charter
FMI-B1 1 2 3 4 5 RGN NYT 11:30 12:30 FMI Air Charter FMI-B2 1 2 3 4 5 NYT RGN 13:00 14:00 FMI Air Charter
FMI-C1 1 2 3 4 5 RGN NYT 16:30 17:30 FMI Air Charter FMI-C2 1 2 3 4 5 NYT RGN 18:00 19:00 FMI Air Charter
FMI-A1 6 RGN NYT 8:00 9:00 FMI Air Charter FMI-A2 6 NYT RGN 10:00 11:00 FMI Air Charter
FMI-A1 7 RGN NYT 15:30 16:30 FMI Air Charter FMI-A2 7 NYT RGN 17:00 18:00 FMI Air Charter
FFliightts frrom Yangoon (RGN) to Manndalay ((MDY) FFliightts frrom Manddalay (MDDY) to YYangon (RGN)
Y5-234 1 2 3 4 5 6 7 RGN MDY 6:15 7:30 Golden Myanmar Airlines Y5-233 1 2 3 4 5 6 7 MDY RGN 8:10 9:25 Golden Myanmar Airlines
YH 909 2 4 6 7 RGN MDY 6:30 8:10 Yangon Airways YH 910 1 3 MDY RGN 7:40 10:30 Yangon Airways
YH 917 1 2 3 4 5 6 7 RGN MDY 6:10 8:30 Yangon Airways YH 918 1 2 3 4 6 7 MDY RGN 8:30 10:25 Yangon Airways
YH 727 1 5 RGN MDY 11:15 13:25 Yangon Airways YH 728 1 5 MDY RGN 9:10 11:05 Yangon Airways
YH 731 1 2 3 4 5 6 7 RGN MDY 15:00 17:10 Yangon Airways YH 732 1 2 3 4 5 6 MDY RGN 17:10 19:15 Yangon Airways
W9 501 1 2 3 4 RGN MDY 6:00 7:25 Air Bagan W9 502 1 2 3 4 MDY RGN 16:10 18:15 Air Bagan
K7 222 1 2 3 4 5 6 7 RGN MDY 6:30 8:40 Air KBZ K7 223 1 2 3 4 5 6 7 MDY RGN 9:00 11:05 Air KBZ
YJ 201 1 2 3 4 5 6 7 RGN MDY 11:30 12:55 Asian Wings YJ 202 1 2 3 4 5 6 7 MDY RGN 16:00 17:25 Asian Wings
Days - (1) Monday (2) TTueesdaay (33) WWeddnessdaay (4) Thursdayy (5) Friday (6) SSaturday (7) Suunday Days - (1) Monday (2) TTueesdaay (33) WWeddnessdaay (4) Thursdayy (5) Friday (6) SSaturday (7) Suunday
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
AUTOMOBILE
27
Myanmar Summary
Myanmar Summary
Chinas SAIC Sees Slower Growth in Fragile
Car Industry Recovery
C
hinas biggest automaker
SAIC Motor Corp forecast
revenue growth would
halve in 2014 from last year to
about 8 percent and warned
a recovery in the industry re-
mained fragile due to overca-
pacity and cut-throat competi-
tion.
SAIC, which owns ventures
with Volkswagen AG and Gen-
eral Motors Co, said it aimed
to generate 609 billion yuan
($98.08 billion) in revenue this
Samuel Shen and
Kazunori Takada
year, against 563 billion yuan
last year.
In the next few years, Chinas
auto industry will continue to
suer Irom overcupucILy, herce
price competition and rising la-
bour and other costs, SAIC said
in a statement via the Shanghai
Stock Exchange.
Chinas vehicle market, the
worlds biggest, slumped to
near-zero growth between 2011
and 2012 as government sales
incentives introduced during
LIe gIobuI hnuncIuI crIsIs ex-
pired. A recovery in the domes-
tic economy helped sales rise
1.q percenL IusL yeur; LIey ure
expected to grow 8-10 percent
in 2014, says the China Asso-
ciation of Automobile Manufac-
turers.
But SAIC warned the market
was still unsteady.
The company may face chal-
Ienges posed by ucLuuLIons
in the macro-economy, the
market, as well as changes in
policies, it said, referring to
an increasing number of cities
imposing car sales restrictions
in an escalating battle against
pollution.
SAIC posted a 19.5 percent
rIse In neL prohL Lo zq.8 bIIIIon
yuan ($3.99 billion), helped by
robust sales at its ventures with
Volkswagen and General Mo-
tors. Analysts polled by Reu-
Lers Iud IorecusL u neL prohL oI
23.25 billion yuan.
It said it sold 5.1 million ve-
hicles last year, up 13.7 percent
year on year, bolstered by a 21.7
percent sales rise at its venture
with Volkswagen and a 15.5
percent increase at its car mak-
ing venture with GM. It aims to
sell 5.6 million vehicles in 2014.
SAIC has been funnelling cash
generated from its joint ven-
tures, which accounted for over
90 percent of total vehicle sales
by volume in 2013, into devel-
oping its own brands, includ-
ing Roewe and Morris Garages
(MG).
The Roewe brand was devel-
oped based on technology from
MG Rover while the MG brand
was indirectly purchased from
the now-bankrupt British car-
maker.
SAICs new energy car busi-
ness was given a boost last
month after the Roewe E50
electric car was granted access
to the Beijing and Tianjin mar-
kets. Buyers of Roewe 550 plug-
in electric vehicles in Shang-
hai became eligible for free
car plates as well as subsidies
worth 60,000 yuan. However,
revenue from electric cars will
be likely remain negligible for
now. Reuters
~,~.-~_~.....:.~:~:.
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High-end Cur Boyers to Benet Irom Big Tux Breuks
T
raders and buyers of
high-end and luxury cars
will now be able to save
sIgnIhcunL umounL oI money In
registration fees, according to
the authorities new tax relief
program announced last week.
According to the regulations,
buyers of high-class cars will be
able to save up to K20 million
($20,600). The changes will
also be felt at the bottom end of
the market, as even the cheap-
est imports will receive tax re-
lief of K300,000 ($300), mean-
ing the more expensive the car
LIe more benehL LIe ImporLer
or the owner will get.
The Myanmar Road Transport
Administration Department
(RTAD) made the announce-
ment on Tuesday last week
through the state-run newspa-
pers. The new rules are mainly
applicable to private cars only.
Aye Myat New car regis-
tration fees have
also dropped from
30 percent up to
80 percent. Reg-
istration fees for
1,350cc engine
cars and below
has been reduced
by o percenL;
cars with 1,351 to
2,000 cc engines
by o percenL; und
fees for cars with
2,001 to 5,000 cc
engines will now
see an 80 percent
fee cut.
Cars which were
imported in ex-
change of old
cars will receive a cut between
K300,000 and K5 million.
However, most brand new cars
will receive a tax reduction of
up to K20 million.
Myanmars emerging econo-
my has paved the way for global
carmakers as car purchases
drastically shot up in the last
couple of years. Luxury and
high-end carmakers have al-
ready forayed into Myanmar
with German luxury car mak-
ers Mercedes and BMW both
having presence in the coun-
try. General Motors Chevrolet,
Britains Jaguar Land Rover
and Americas Ford also have
showrooms in the Southeast
Asian nation.
ModeIs present new Mercedes Benz at an event in Yangon.
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An empIoyee checks newIy-assembIed eIectric cars to be exported to South America at an eIectric vehicIe factory in Zouping
county, Shandong province, China.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
28
IT & TELECOM
Myanmar Summary
Ooredoo Kicks OH Initiutive to
Launch MobileMonday in Myanmar
O
oredoo Myanmar has
launched a logo design
competition in a bid to
kIck o LIe IocuI cIupLer oI LIe
global networking forum Mo-
bile Monday (MoMo).
Earlier in March, the telecoms
hrm InLroduced MobIIeMonduy
in Myanmar through its Ide-
abox programme.
Open to all people in Myan-
mar, Ooredoo said the chal-
lenge is to design a MobileM-
onduy Iogo LIuL Is reecLIve oI
local Myanmar customs and
values.
The winning logo will earn its
designer K500,000 ($515) and
a new iPad.
Ooredoo said MobileMonday
Phyu Thit Lwin is expected to bring a range of
benehLs Lo Myunmur, IncIud-
ing helping to foster an inno-
vation platform within the mo-
bile sector, facilitating industry
networking between small and
large companies and individu-
als, bridging partnership ex-
changes between domestic and
international organisations,
and presenting innovative vi-
sions, trends, studies and fore-
casts from the mobile market-
place.
Ross Cormack, CEO of Oore-
doo Myanmar, said bringing
concepts like MobileMonday to
Myanmar will pay dividends
for the ICT sector and wider
economy for years to come.
MoMo is an open community
platform of mobile industry
visionaries, developers and in-
uenLIuI IndIvIduuIs IosLerIng
brand neutral cooperation and
cross-border P2P business op-
portunities through live net-
working events to demo prod-
ucts, share ideas and discuss
trends from both local and
global markets.
Ooredoo Myanmar . Mobile
Monday (MoMo) eq.~:. _...
~..q,~~~ ..~._..~..
~:. _....._~:. .q._..~.
~..:. .~ ~. .|.~ . e .q.
. . , ._~ .. _., .:. ~ Mobile
Monday ~. ~. ~ , .- Ideabox
.,q..~.. .~.~....._.
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e_...:.~.,_e ,.~- .
.~..:.~ _.,.:.....~,e..:.
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e, ~ .. :.q._ _e. _. . ~. qq ._ .
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Myanmar Summary
Facebook to Use Satellites,
Drones to Spread The Internet
F
acebook Inc is harnessing
satellite, drone and other
technology as part of an
umbILIous und cosLIy eorL Lo
beam Internet connectivity to
people in underdeveloped parts
of the world.
The worlds No. 1 social net-
work said last week it has hired
aerospace and communications
experts from NASAs Jet Pro-
pulsion Lab and its Ames Re-
search Center for the new Con-
nectivity Lab project.
Today, were sharing some
Alexei Oreskovic details of the work Facebooks
Connectivity Lab is doing to
build drones, satellites and la-
sers to deliver the internet to
everyone, Facebook Chief Ex-
ecutive Mark Zuckerberg said
in a post on Facebook.
He guve Iew specIhcs und dId
not specify a time frame.
The move extends the social
networking companys Inter-
neL.org eorL, uImed uL con-
necting billions of people who
do not currently have Internet
access in places such as Africa
and Asia. Facebook has been
working with telecommunica-
tions carriers to make Internet
access more available and af-
fordable.
Were going to continue
building these partnerships, but
connecting the whole world will
require inventing new technol-
ogy too, Zuckerberg said in his
post.
ucebook envIsIons u eeL oI
solar-powered drones as well
as low-earth orbit and geosyn-
chronous satellites delivering
nLerneL uccess Lo dIerenL re-
gions of the world. Invisible, in-
frared laser beams could allow
Facebook to dramatically boost
the speed of the Internet con-
nections provided by the vari-
ous aircraft, Facebook said on
a Web page that explaining the
project.
Facebooks plans to take to the
skies underscore the companys
rising ambitions to exert its in-
uence beyond LIe conhnes oI
its 1.2 billion-member social
network and to set the pace for
new technology that will shape
society. On Tuesday, Facebook
announced plans to acquire Oc-
ulus VR Inc, a maker of virtual
reality goggles that Facebook
hopes could become the com-
puting platform of the future.
Facebook is following in
the steps of Google Inc, the
worlds largest Internet search
engIne, wIose GoogIe X dIvI-
sion is working on a variety of
so-called moonshot projects
including self-driving cars and
wearable computers.
Google announced plans last
year to use solar-powered bal-
loons to deliver Internet access
to remote regions of the world.
Among the jobs openings
posted on Facebooks website
on Thursday last week were
roles such as Antenna Systems
Engineer and Electro-Optical
Network Access Hardware En-
gineer.
Facebook also said it had
IIred u hve-member Leum LIuL
worked at Ascenta, a British
company whose founders cre-
ated early versions of the Zeph-
yr, which Facebook said held
LIe record Ior LIe IongesL-yIng
solar-powered unmanned air-
craft. Reuters
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- ~...:~q:q.. Mark
Zuckerberg ~ Facebook ..'~
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net.org -_~......:.~ Facebook
. .~.~ . ..: q ~ .,_. ._e.
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Facebook CEU Mark Zuckerberg gestures whiIe addressing the audience during a media event at Facebook headquarters.
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
IT & TELECOM
29
Myanmar Summary
Telecom to Drive Myanmar Investment
Surge in 2014-15
T
elecommunications sec-
Lor wIII drIve LIe ow oI
investments into Myan-
mur In LIe nexL zo1q-1 hscuI
yeur, Lop governmenL omcIuIs
have said.
The Myanmar Investment
Commission (MIC) projects
foreign direct investment (FDI)
numbers between $4 billion
and $5 billion by 2015 as a re-
sult of the countrys initiatives
in its emerging telecommuni-
cations industry, Directorate of
Investment and Company Ad-
ministration Director General
U Aung Naing Oo said.
The telecom sector has the
highest potential to attract FDI
into Myanmar, and will rake in a
total of 20 percent FDI in 2014,
U Aung Naing Oo, who is also a
member of Myanmar Investment
Commission (MIC), said.
U Thaung Tin, deputy min-
ister for communications and
information technology, at a
recent seminar said: The lib-
eralisation of the sector will
give more opportunities for in-
vestment. The market with less
than 12 percent penetration is
undoubtedly a very attractive
market for all potential inves-
tors.
The government is commit-
ted to establish investment-
friendly policy and regulatory
frameworks for the sector.
The minister said 2014 will
be a very interesting year to
watch for Myanmars telecom-
munications industry.
With the new telecom law
and giving out integrated na-
Phyu Thit Lwin tion-wide licence to two new
entrants the days of mo-
nopoly in the telecoms sector
in Myanmar are over. 2014 will
be the year of execution and im-
plementation from the private
sector.
According to MIC statistics,
manufacturing industry still re-
mains at the top spot in terms of
FDI, accounting for 50 percent
of the total $3.5 billion in FDI
In zo1-1q hscuI yeur, IoIIowed
by hotels and tourism, then tel-
ecommunications. MIC expects
the telecommunications sector
to move a rank higher in the
comIng hscuI, wILI un esLImuLed
revenue of at least $4 billion.
U Aung Naing Oo said telecom-
munications sector has the po-
tential to even grab the highest
amount of FDI in 2014-2015.
Telenor and Ooredoo, the
counLry`s hrsL IoreIgn LeIecoms
licence winners, are now rolling
out their networks around the
country. Telenor has promised
Lo suppIy wILIIn hve yeurs LIe
network coverage for 90 percent
of the population, with a target
to break even in three years for
the $500 million it paid for its
15-year licence. Ooredoo, on the
other hand, has gotten its 3G
network underway.
Ross Cormack, CEO of Oore-
doo Myanmar, said: We have
a set of promises we have made
the country through the bid-
ding process which is now part
of our licence and are now busy
rolling out the very latest in 3G
technology.
Following the awarding of li-
cences, Ericsson, along with
other telecom companies from
Japan and Singapore, also ex-
pressed their interest in Myan-
mar.
The licence holders will still
need support from other tel-
ecom companies in strength-
ening the telecommunication
infrastructure, such as build-
Ing hbre opLIc IInes und Lowers
around the country, which is
bound to contribute to the in-
ow oI InvesLmenL, U Aung Nu-
ing Oo said.
In telecom sector, many ser-
vice providers are now in talks
to make investment in their as-
socIuLed heIds, Ie suId.
While the foreign companies
are seen as a boon to local play-
ers to help them gain traction in
LIe heId, NuIng Oo beIIeves LIuL
the government should create
proLecLIon Iuws und provIde h-
nancial incentives to help estab-
lish the local telecom sectors
competitiveness.
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A man repairs a phone at a phone service centre in Yangon.
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An illustration picture shows the logo of the US National Security Agency on the
display of an iPhone in Berlin.
China to Strengthen Internet Security After US Spying Report
C
hina will beef up its inter-
net security after recent
reports that the US gov-
ernment spied on a major tel-
ecommunIcuLIons hrm, LIe De-
Megha Rajagopalan and
Li Hui
fence Ministry said last week.
Reports that the US Nation-
uI SecurILy Agency InhILruLed
servers at the headquarters of
Huawei Technologies Co lay
bare the United Statess hypoc-
risy and despotic rule, ministry
spokesman Geng Yansheng told
u brIehng.
For a while now, some Amer-
icans have jabbered on and on,
condemning Chinese hacking
attacks, he said. But the truth
is that this is without any basis
in fact, its simply a thief crying
Stop, thief!
The ministry did not say
what steps would be taken to
strengthen internet security.
The White House has said
that the US does not spy to gain
commercial advantage. Cyber-
espionage has cast a shadow
over China-US ties, with each
side accusing the other of spy-
ing.
Recently, The New York
Times and German magazine
Der Spiegel published articles
on information about Huawei
conLuIned In cIussIhed docu-
ments given to journalists by
former NSA contractor Edward
Snowden.
n LIe sume brIehng, Geng
warned the United States not to
sell arms to Taiwan, which Chi-
na sees as a rogue province. US
sales of weapons to the demo-
cratic and self-ruled island have
long incensed Beijing.
He added that US Secretary
of Defense Chuck Hagel would
visit China April 7-10, a trip that
would take in a Peoples Libera-
tion Army academy.
US President Barack Obama
is visiting Japan, South Korea,
Malaysia and the Philippines in
April.
Asked about a mass stabbing
at a train station in a southwest-
ern city in March that left 29
dead and about 140 wounded,
Geng said that the military was
well prepared to strike back at
all kinds of violent terrorist ac-
tivities. Reuters
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Myanmar Summary
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April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
SOCIAL SCENES
30
Deputy Union Minister Dr. Tin
Shwe - Ministry of Hotel & Tour-
sim. Wai Linn Kyaw
Ribbon cutting. Wai Linn Kyaw Te opening. Wai Linn Kyaw
Guests arrive. Wai Linn Kyaw Delegates at the event. Wai Linn Kyaw
U Wynn Tin - MD, Asia Global
Travels & Tours & AirAsia Sales
Center. Wai Linn Kyaw
Kenny Wong - Country Head of
Commercial, AirAsia.
Wai Linn Kyaw
Yasuhide Fujii, Managing Part-
ner, KPMG in Myanmar.
Wai Linn Kyaw
U Win Aung , President of UMF-
CCI. Wai Linn Kyaw
Ian Tornhill, Executive Direc-
tor, KPMG in Tailand.
Wai Linn Kyaw
Delegates pose for a photo.
Wai Linn Kyaw
Staf pose for a photo.
Wai Linn Kyaw
Te panel.
Wai Linn Kyaw
Signal Signs Letter of Co-Operation with FDI, MDA, Ministry of Health and Ministry of
Education to Give Myanmar Children a Cavity-free Future
A child giving two fngers pledge. Signal Children entertaining guests with Signal song. Signal Children singing Signal song. Signal Dr Pwint Phoo giving speech. Signal
Dr Pwint Phoo, Dr TC Wong and Paul Polman with
children two fngers pledge. Signal
(L-R) Ko Zaw Myo Hlaing, Dr Pwint Phoo, Dr TC
Wong, Paul Polman, U Tan Win, U Win Myint
Maung. Signal
Letter of cooperation signing between Signal and part-
ners. Signal
Signal and partners giving two fngers pledge to im-
prove oral health in Myanmar. Signal
Signal and partners with school children. Signal Two fngers pledge. Signal Two fngers pledge. Signal
(L-R) U Tan Win, Dr TC Wong, U Win Myint
Maung and Paul Polman. Signal
KPMGs Tird Myanmar Business Forum "Te Road to the AEC:
Creating Positive Business Partnerships"
AirAsia Sales Centre Opening Ceremony
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
CLASSIFIEDS
31
April 3-9, 2014
Myanmar Business Today
mmbiztoday.com
32
ENTERTAINMENT
Coca-Cola to Debut International Music
Collaboration, Launch 2014 Happiness Journey
C
oca-Cola Myanmar will unleash its Happiness Journey program with the
launch of the Coca-Cola song for the 2014 FIFA World Cup campaign, The
World is Ours, featuring Sai Sai and Bobby Soxer.
TIe Myunmur Iunguuge versIon oI TIe WorId Is Ours, Cocu-CoIu`s om cIuI song Ior
its FIFA World Cup campaign, will bring together the voices of internationally famous
recording artist David Correy, with Coca-Cola ambassadors and Myanmar celebrities
Sai Sai and Bobby Soxer.
The local version of The World Is Ours will debut in Myanmar during the 2014
Happiness Journey in the lead-up to Thingyan.
The objective of the localized Coca-Cola song for FIFA World Cup campaign is to
highlight the power football has around the world in bringing people and nations to-
gether, says Rommel Fuentebella, director of marketing at Coca-Cola Myanmar.
We wanted the music of the song to stay very authentic to Brazil, but in an original
way that would also resonate with Myanmar audiences and include them in the cel-
ebrations and
happiness sur-
rounding the
FIFA World
Cup this sum-
mer.
The original English version of the song was popularised by artist David Correy, who burst onto
LIe InLernuLIonuI musIc scene us u hnuIIsL on LIe second seuson oI LIe reuIILy sIow, TIe X ucLor.
During Thingyan 2014, the Happiness Journey, a mini-carnival road-trip, will be active in both
Yangon and Mandalay.
n Yungon, LIe HuppIness Journey wIII be purL oI LIe hrsL-ever Cocu-CoIu Myunmur Summer esLI-
val 2014 at Myanmar Event Park from 12-16 April. The summer celebration will bring together water
activities, adventure games, a foam party, live music, great food and refreshing ice-cold Coca-Cola, the
beverage giant said. In addition, an indoor air-conditioned rest area will be available to escape the heat
of the hot summer days.
In Mandalay, the Happiness Journey will include a convoy of especially-created Coca-Cola vehi-
cles, bringing the opportunity to sample free Coca-Cola and a chance for people to win exclusive
Coca-Cola prizes after performing their best rendition of the Coca-Cola Brrr as seen on the Coca-
Cola Brrr television commercial.
Pann Nu
Daivd Correy.
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Sai Sai Kham Leng & Bobby Soxer
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Over 4,000 Women Participate in
Myanmars First Walkathon
M
yunmur`s hrsL errovIL
walkathon for women
jointly organised by
Ministry of Sports and Ferrovit
from Mega Lifesciences Ltd.
brought a crowd of more than
4,000 women to Peoples Park
recently.
The walkathon was held in
a bid to spread awareness on
anemia and eradicate a nutri-
tional problem highly prevalent
among Myanmar women and
children. The 5-km women
walkathon was opened by Vice
Minister U Thaung Htaik.
The participants started the
walk from Pyay Road, Innya
Kan Baung and crossed the
hnIsI IIne uL PeopIe`s Purk.
Encouraged by the sounds
of drums, cheerleaders and
LIe BugIe Corps, LIe women crossed LIe hnIsIed IIne
where they entered into an Anemia-free Zone and
received medals and ate breakfast.
Ferrovit, the largest iron supplement brand in the
counLry, oered purLIcIpunLs Iree LesLIng uL LIe hnIsI
IIne Ior LIe bIood dIsorder LIuL uecLs q percenL oI
non-pregnant women, 71 percent of pregnant women
und ; percenL oI cIIIdren under LIe uge oI hve In
Kyaw Min
Winners of the walkathon.
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The opening ceremony.
Myanmar. Over more than 900 women tested in free
anemia checkup program.
President of Mega Life Sciences Girish Wadhwa said,
Myunmur`s Iron dehcIencIes Ieud Lo u remurkubIy IIgI
prevalence rate of anemia. Its a public health problem
that needs to be addressed and addressed urgently. We
see this walkathon as a big step in educating people
and creating awareness on anemia.
Nutritionist Dr Hla Kyi and celebrity Dr Chit Thu
Wai gave informative health talks on the common
blood condition after the event. Dr U Hla Kyi said,
Food rich in iron should be carefully consumed to
prevent anemia. Furthermore, anemia can be eradicat-
ed by taking iron supplements and commercially iron-
enriched food. Also, please continue to walk regularly
to maintain good health. Celebrity Ma Tin Moe Lwin
also participated in Ferrovit walkathon encouraged
women and also gave health talk.