PWC MYANMAR WEEKLY BUSINESS INTELLIGENCE - ISSUE 158 26 APRIL 2019
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www.pwc.com/mm PwC Myanmar Weekly Business Intelligence Issue 158 26 April 2019
Disclaimer PricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Tell us what matters to you and find out more by visiting us at www.pwc.com/mm. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2019 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved. PwC refers to the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. The application and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PricewaterhouseCoopers Myanmar Co., Ltd client service team or your other tax advisers. PwC | April 2019 2
1. Weekly Key Financial & Business News PwC | April 2019 3
Weekly Key Financial & Business News
Headlines
MoU on rice exports signed with Yunnan govt
Myanmar to export farmed fisheries to EU from May onwards
Banking reforms, higher investments will drive better growth: World Bank
Yangon Port handles over three million containers within three-year time
Eight foreign investor apply for Myanmar mining exploartion permits
PwC | April 2019 4Weekly Key Financial & Business News
Headlines
Why is Serge Pun betting on tourism?
Myanmar Signs 3 Agreements at Belt and Road Forum
Emerging Opportunities in Myanmar’s Construction Sector
An industry-crippling jet fuel monopoly breaks
YangonNet set to empower businesses with one-stop ICT services
PwC | April 2019 5Newspapers
Myanmar Times
MoU on rice exports signed with Yunnan govt
23 April 2019
The Ministry of Commerce (MOC) and near the border after China, in an attempt to
government of Yunnan Province, China, signed a crack down on illegal border trade, temporarily
memorandum of understanding on the export of banned all imports from Myanmar.
Myanmar rice and other crops to China on April Since Chinese New Year in February, around one
21. million bags of rice and 5000 head of cattle have
Under the agreement, Myanmar will be able to been stuck in transit at Muse.
legally export crops such as rice as well as As a result, rice prices have decreased by up to 20
fisheries to China via the Muse border trade gate. yuan per bag, while breeders were forced to sell
The MoU, which is a part of barter system, will their cattle at low prices. In total, trade volumes
see Myanmar importing construction materials have fallen by a value of US$650 million year-to-
and farming machinery manufactured in Yunnan date in the current fiscal year compared to the
Province in exchange for an equal amount in year before, according to the MOC.
value of Myanmar-produced agricultural China currently imports commodities based on a
products. quota system. Myanmar’s official export quota,
The Agriculture, Livestock and Fishery set in 2016, is 100,000 tonnes of rice. According
Development Committee under the Union of to data from the MOC, over 50 percent of
Myanmar Federation of Chambers of Commerce Myanmar-produced rice is sold to China via the
and Industry (UMFCCI) will take charge of this border. As such traders are lobbying for that
agreement, which will take effect in May. quota to be quadrupled, to 400,000 tonnes.
Exporting rice to China will be the government’s
top priority.
The barter agreement comes after tonnes of Source: Myanmar Times
Myanmar agricultural products, including rice, https://www.mmtimes.com/news/mou-rice-
sugar and maize, had accumulated at warehouses exports-signed-yunnan-govt.html
PwC | April 2019 6Newspapers
Myanmar Times
Myanmar to export farmed fisheries to EU from May
onwards
23 April 2019
Myanmar will be able to export farmed marine Naing said.
products to the European Union (EU) starting The EU maintains high food quality standards
from May 1, said U Thet Naing, deputy director of that limit the number of fishery products it
the Quality Control and Research Division of imports from overseas. “We need to continue
Fisheries Department. raising our capacity to monitor whether farmed
Up until recently, the EU had only permitted fish contain chemical residue. In Myanmar, we
imports of fish caught in the wild. From next week are still unable to test for chemical residue in our
onwards, this will expand to include seven farmed marine products,” said Daw Toe Nanda Tin, vice
fish, two prawn and one crab species. chair of the Myanmar Fisheries Federation.
These include the Rohu, Mrigal, Katla and Carfu A total of 27 fish breeding farms which supply
fish species, river catfish, barbus fish, spotted farmed fish to the factories that export marine
prawn, white prawn and soft shell crab. products to the EU have been examined. These
“We have been trying to export farmed fisheries fish farms are located in Yangon Region,
to the EU since 2014. It is a difficult process and Ayeyarwady Region and Tanintharyi Region, said
only a few countries in Asia have permission to do U Thet Naing.
so. Wild fish exports to the EU make up only 3 There are more than 120 cold-storage facilities in
percent of total fisheries exports. If farmed fish Myanmar, of which 23 have been permitted to
products can be exported, Myanmar will be able export fish caught in the wild to the EU. Out of 28
to increase its total marine exports to the EU,” member states of EU, Myanmar now exports wild
said U Thet Naing. fish to the UK, Italy, France, Cyprus, Netherlands,
Of the 23 factories which export fish caught in the Sweden, Greece, Belgium and Germany.
world to EU, 17 will also be able to export selected Source: Myanmar Times
farmed fishery products. Two factories have https://www.mmtimes.com/news/myanmar-
already cleared the necessary procedures, U Thet export-farmed-fisheries-eu-may-onwards.html
PwC | April 2019 7Newspapers
Myanmar Times
Banking reforms, higher investments will drive
better growth: World Bank
24 April 2019
Myanmar’s GDP growth is expected to accelerate East Asia and Pacific region of the World Bank,
to 6.5 percent in 2019-20, supported by public said recent reforms in the banking and financial
investment leading up to the elections in 2020, sectors have helped to draw higher foreign
after which growth is expected to expand to 6.6pc, investor interest in Myanmar. These include
according to the World Bank’s April 2019 East allowing foreign banks to expand and lend to local
Asia and Pacific Economic Update, launched businesses and opening up the insurance sector to
yesterday. foreign ownership.
However, the economy is projected to slow 6.2 pc Mason added that the authorities should keep up
in 2019 from 6.8 pc in 2018 due to weaker efforts to strengthen the business environment
industrial performance, exchange rate volatility and promote the peace process, both of which
and rising cost pressures. encourage investments.
The trade deficit is expected to narrow in the The World Bank’s report comes after the
current fiscal year ending September. This is International Monetary Fund (IMF) also released
because exports, particularly of garment its forecast earlier this month. It expects
products, have accelerated, while imports of economic growth of 6.4pc in the current fiscal
capital goods have slowed. The slower pace of year, which is lower than 6.8pc between April
imports is consistent with the lower volumes of 2017 and March 2018. The economy is forecast to
private investment estimated between October grow at an annualised pace of 6.2pc in the six
2018 and April this year. months to September 2018.
Things are forecast to improve from now on
though, backed by higher public and private Source: Myanmar Times
investments as a result of domestic reforms and https://www.mmtimes.com/news/banking-
macro stability, the World Bank said. reforms-higher-investments-will-drive-better-
Andrew Mason, acting chief economist for the growth-world-bank.html
PwC | April 2019 8Newspapers
Consult Myanmar
Yangon Port handles over three million containers
within three-year time
24 April 2019
A total of eight new jetties, which can dock bulk purchase of two quay cranes, six RTGs, three
carriers, are built within three-year time and reach stackers, six trailers and six chassis using
more than three million containers are handled in about US$200 million loan from Japan in
that period, according to Myanma Port Authority Thilawa area.
(MPA).
Yangon port, which is handling over 90 per cent
of international maritime trade, has now
possessed up to 41 jetties.
Myanmar has 1,385 miles length of coastal area
and nine ports are built along the coast. Among
the ports, Yangon port is the major port.
The eight new jetties are 200-meter length Green
Asia jetty, Elite Perto Chemical jetty, Wilmar
International jetty, International Bulk Terminal
Thilawa jetty, 135-meter length Puma Energy Asia
Sun jetty, 80-meter length Kyimyindaing
International Port Terminal jetty and two 400-
meter length jetties built on No.25 and 26 land
plots in Thilawa.
Myanmar handled over three million containers Source: Consult Myanmar
and over 76 million tons of cargos in three-year https://consult-
time. myanmar.com/2019/04/24/yangon-port-
The MPA built a steel jacket type main bridge, handles-over-three-million-containers-within-
three smaller bridges, dockyard buildings, the three-year-time/
PwC | April 2019 9Newspapers
Myanmar Times
Eight foreign investor apply for Myanmar mining
exploration permits
24 April 2019
Eight foreign mining companies have applied for for one block in Taninthayi to mine tin, tungsten
permits to conduct large-scale mining exploration and rare earth. Fortuna Metals applied for two
projects in Myanmar, U Ather Hlaing, director of blocks in Kachin to mine gold, copper and related
the Department of Geological Survey and Mineral metals and one block in Kayah State to mine tin
Exploration, told The Myanmar Times. and tungsten, said U Ather Hlaing. He added that
The government has received a total of 1661 some of the blocks will require environmental
applications to operate at large and medium-scale assessments before exploration permits are given.
mining blocks since the new Myanmar Mining “For these areas, we will follow the required
Law was enforced last July. Mining activities had procedures stated by the authorities,” said U
been suspended for two years prior to July 2018. Ather Hlaing, adding that his department will
Among these applications, eight involving permits consider the recommendations given by regional
to mine at 12 mining blocks across Myanmar are authorities after consulting with the locals before
from foreign companies, the department said. approving the permits.If the applications are
South Earth Joint Venture has applied for two complete and the sites do not overlap with
blocks to mine copper and tin in Mandalay and existing sites, the regional authorities are likely to
Shan State, respectively. Southern Nonferrous have positive feedback, he said.According to the
Metals has also applied for one block in Shan to 2018 Myanmar Mining Law, foreigners can apply
mine tin and tungsten. Meanwhile, Indmar to mine at large-scale mining blocks of more than
Carbonates Minerals, Wuntho Resources and 500,000 acres while local businesses can invest in
Access Resources Asia have applied to mine all kinds of blocks.
limestone, copper and gold in Sagaing, Source: Myanmar Times
respectively. Kipling Resources has also applied https://www.mmtimes.com/news/eight-foreign-
for two blocks to mine gold, copper and other investor-apply-myanmar-mining-exploartion-
metals in Magwe, while Nettetsu Mining applied permits.html
PwC | April 2019 10Newspapers
Frontier Myanmar
Why is Serge Pun betting on tourism?
25 April 2019
Tourism has borne the brunt of an economic other big infrastructure projects.
slowdown and the international outcry over But Pun, known also as U Theim Wai, has been in
Rakhine, but one tycoon is feeling bullish about the news for another reason: Memories Group is
the industry. rapidly acquiring hotels and tourism services
“TOURISM is low-hanging fruit in any country throughout Myanmar. In 2018, the company
looking to develop,” says Mr Serge Pun, puffing opened high-end hotels in Yangon, Kayah and
on a cigar in the headquarters of Memories Mon states, and Tanintharyi Region’s Myeik
Group, a company that manages the Myanmar Archipelago. Some have wondered why he is so
tycoon’s expanding portfolio of tourism assets. bullish about a sector that has borne the brunt of
“Those moaning and groaning,” he says, “are a general economic slowdown and an
missing the bigger picture.” international outcry over alleged atrocities in
With an office set amid the golf courses and Rakhine State.
luxury homes of his 653-acre Pun Hlaing Estate, “We enter into sectors with a view to be players
next to the Hlaing River as it bends towards for decades,” he says, before expounding on what
downtown Yangon, Pun matches a large he considers to be Myanmar’s chief advantages:
commercial appetite with a relatively clean image. “You could go skiing in the Himalayas in the
This has made him a preferred partner for foreign north and in the same day fly down to the Mergui
investors with international brands to protect. [Myeik] Archipelago and go diving in a tropical
His role as the figurehead since early 2018 of the setting.”
New Yangon City project, involving a Chinese
construction company formerly sanctioned by the
World Bank, has raised eyebrows, though a steady Source: Frontier Myanmar
stream of information via town hall style meetings https://frontiermyanmar.net/en/why-is-serge-
and an active website has distinguished it from pun-betting-on-tourism
PwC | April 2019 11Newspapers
The Irrawaddy
Myanmar Signs 3 Agreements at Belt and Road
Forum
26 April 2019
YANGON—Myanmar’s government signed two collaborate on projects in a number of sectors
memorandums of understanding (MOUs) and an including basic infrastructure, construction,
agreement letter with China at Beijing’s Belt and manufacturing, agriculture, transport, finance,
Road Forum on Thursday, detailing strengthened human resources development,
cooperation between the countries on the China- telecommunications, and research and
Myanmar Economic Corridor (CMEC), trade and technology. The estimated 1,700-kilometer-long
technology. corridor will connect Kunming, the capital of
According to the Ministry of Information, China’s Yunnan province, to Myanmar’s major
Myanmar State Counselor Daw Aung San Suu Kyi economic checkpoints—first to Mandalay in
and Prime Minister of the People’s Republic of central Myanmar, and then east to Yangon and
China Li Keqiang were present to witness the west to the Kyaukphyu Special Economic Zone
signing of the documents. (SEZ). Myanmar State Counselor Daw Aung San
The ministry’s statement said that a China- Suu Kyi is currently in Beijing to attend the
Myanmar Economic Corridor cooperation (2019- second Belt and Road Forum and met Chinese
2030) MOU was signed by Myanmar’s Ministry of President Xi Jinping on Wednesday.
Planning and Finance and the National Despite growing wariness among the public
Development and Reform Commission (NDRC), regarding unsustainable debt to China, during the
China’s top economic planning agency. meeting Daw Aung San Suu Kyi reassured the
In September, a 15-point MOU for the CMEC was president of Myanmar’s support for the BRI and
signed. The economic corridor is set to be part of said that cooperating on it would benefit the well-
Beijing’s ambitious Belt and Road Initiative (BRI) being of the region and the world as a whole.
which aims to construct basic infrastructure Source: The Irrawaddy
connecting key economic centers in Myanmar. https://www.irrawaddy.com/news/burma/myan
Under the MOU, the governments agree to mar-signs-3-agreements-belt-road-forum.html
PwC | April 2019 12Newspapers
ASEAN Briefing
Emerging Opportunities in Myanmar’s Construction
Sector
26 April 2019
Myanmar’s economy is expected to register a 6.9 of the economy in 2019.
percent growth in 2019, following a previous slow Both of the major economic centers of the
down due to political reasons. The country country, Yangon and Mandalay, have a strong
borders the two most populated countries in the demand for middle-class condominiums. The
world – China and India – its membership in the demand in Mandalay is especially high for
Association of Southeast Asian Nations (ASEAN) property worth around US$ 300,000. Yangon’s
economic bloc makes it an increasingly interesting population is estimated to grow by 3 million
investment destination, including for those within the next ten years requiring massive
looking to invest in real estate and infrastructure housing investments.
construction projects. The infrastructure sector displays another major
With manufacturers considering alternative investment opportunity for foreign businesses.
options to relocate due to the ongoing China-US The Asian Development Bank (ADB) estimates
trade war and the rising wages in China, the infrastructure gap between now and 2030 to
Myanmar offers a promising economic be worth US$ 120 billion. All infrastructure
environment for construction and real estate sectors like roads, railways, harbors and airports
investors. The country’s construction sector is require massive investments where international
only expected to grow in the coming years. developers can get involved with joint venture
The Myanmar Construction Sector operations or as a supplier.
After growth rates of more than 10 percent in
recent years, the Myanmar construction sector is
ready for large investments. In 2018, the Source: ASEAN Briefing
construction industry had a value of more than https://www.aseanbriefing.com/news/2019/04/
US$ 9.5 billion. This is a share of around 16.5 26/emerging-opportunities-in-myanmars-
percent of the country’s GDP and a major driver construction-sector.html
PwC | April 2019 13Newspapers
Frontier Myanmar
An industry-crippling jet fuel monopoly breaks
26 April 2019
A domestic airline has received approval to sell airport and the base for most domestic airlines.
aviation fuel in a decision that has ended a This has raised doubts about whether it will really
monopoly and raised hopes of cheaper prices and be able to compete with the incumbent player,
better service. National Energy Puma Aviation Services
GOLDEN MYANMAR Airlines has received (NEPAS), and potentially bring down prices.
Myanmar Investment Commission approval to The monopoly
operate an aviation fuel business, in the first sign State-owned Myanma Petroleum Products
of competition for the state-backed monopoly that Enterprise was the sole supplier of aviation fuel in
airlines say has undermined their viability. Myanmar until 2015, when it formed a joint
Golden Myanmar Airlines Public Co, Ltd received venture with Singapore’s Puma Energy following
permission for the “importation, storage, a tender.
distribution, transportation and into plane The joint venture, NEPAS, operates at 11 airports,
fuelling of jet fuel” at an MIC meeting on April 5, and is currently the only source of aviation fuel.
according to the Directorate of Investment and Airlines and industry observers have said the lack
Company Administration. of competition is a factor in high operating costs.
MIC stated that the wholly Myanmar-owned Over the past two years, five domestic airlines
venture would operate at Tachileik, Kawthaung, have ceased operations, leaving five private
Nyaung Oo, Heho, Sittwe and Myitkyina airports, carriers and state-owned Myanmar National
as well as Mandalay International Airport. It will Airlines.
also have a jetty terminal at Thilawa in Yangon
Region.
However, the new venture does not appear to Source: Frontier Myanmar
have received permission to operate at Yangon https://frontiermyanmar.net/en/an-industry-
International Airport, the country’s busiest crippling-jet-fuel-monopoly-breaks
PwC | April 2019 14Newspapers
Eleven Myanmar
YangonNet set to empower businesses with one-stop
ICT services
27 April 2019
AMID RISING demand for technology among market, we have managed to gain the confidence
companies to improve performance in Myanmar, of several big corporates, retail firms and some
locally-owned YangonNet Technology Solutions embassies in using our products and services,” he
Co is set to expand its business to fill the gap said. “I have built a great team inspired to work
through a wide range of ICT solutions and for YangonNet , and that is one of the
products, according to Lin Htet Aung, the firm’s achievements I will always be proud of.”
founder and chief executive. Lin Htet Aung has a burning desire to establish a
In an exclusive interview, he said the firm would successful technology company since he was
pitch its products to the business sector in the young. He studied hard and later, migrated to
second half of this year. It aims to triple in size Singapore to gain more experiences and develop
from the current staff of 10 by the end of this year. his passion for technology. After the opening of
“The valuation of YangonNet is growing fast, and Myanmar’s economy in 2014, he decided to return
we are fully confident of achieving our targets, home and set his heart on the establishment of
working together with many strategic partners YangonNet with his own savings.
from Hong Kong and China,” he said. “Access to finance is still a big issue for many
Lin Htet Aung established the firm in June 2017, startups in Myanmar, and there is no difference
having worked in Singapore for more than a for YangonNet. But, I did not want to be
decade. Leveraging his experience acquired from overwhelmed by investors’ involvement in the
several technology projects there, the executive early stage of our business. So, I decided to stand
aims to provide effective ICT solutions for both on my own feet,” he said.
local and global customers seeking to transform Source: Eleven Myanmar
their business with modern technology. https://elevenmyanmar.com/news/yangonnet-
“Our commercial operations started in July last set-to-empower-businesses-with-one-stop-ict-
year. Even though our company is still new to the services
PwC | April 2019 152. Weekly Key Policy News PwC | April 2019 16
Weekly Key Policy News
Headlines
Local hydropower association goes independent
Engaging with China on Belt and Road
Trade laws protecting local producers now being drafted: MOC
A weakened Myanmar still needs to stand firm in Myitsone talks
Yangon Government Issues Condominium Licenses for 32 Developers
PwC | April 2019 17Newspapers
Myanmar Times
Local hydropower association goes independent
26 April 2019
The Myanmar Hydropower Developer’s development of Myanmar’s hydropower sector,”
Association (MHDA), led by the International said Vikram Kumar, IFC’s country manager for
Finance Corporation (IFC), has now become an Myanmar and Thailand.
independent Myanmar-registered group Myanmar is South East Asia’s largest thriving
promoting sustainable work in the country’s market for electricity. It is estimated that
hydropower sector, it announced on Wednesday. currently, 60 percent of the population does not
Founded in 2016 as the Hydropower Developers’ have access to power. The government’s National
Working Group, MHDA is a platform where Electrification Plan aims to electrify 7.2 million
hydropower firms and related professionals are households and provides universal energy access
able to support talks, influence policies, and by 2030. With the nation’s vast untapped
improve environmental and social management hydrological resources of about 95 GW and nearly
processes and governance. 100 hydropower projects operating, being built,
As its first initiative, the MHDA has partnered up or in the planning stages, the hydropower sector
with the Ministry of Electricity and Energy to is crucial for Myanmar’s economic growth and
produce standardised concessions and power social development. An example of a hydropower
purchase agreements for hydropower projects. project which became highly controversial is
These agreements will help regulate the rights Myitsone Dam project. Talks will be made on
and obligations of both developers and the whether to resume Myitsone during the second
government, and ensure projects will meet the Belt and Road Forum (April 25-27) attended by
accountability requirements of international State Counsellor Daw Aung San Suu Kyi.
lenders and comply with environmental and
social standards. Source: Myanmar Times
“We believe the MHDA is uniquely placed to https://www.mmtimes.com/news/local-
make significant contributions to the sustainable hydropower-association-goes-independent.html
PwC | April 2019 18Newspapers
Myanmar Times
Engaging with China on Belt and Road
26 April 2019
This week, 37 heads of state and government, as unsettling deal and ever-changing criteria.
well as 5000 participants from over 150 countries, Are there lessons to be drawn from the Sino-Thai
converged on Beijing for the second Belt and negotiations? From the beginning, repeated
Road Initiative (BRI) Forum for International criticism has been heaped on China’s continent-
Cooperation. The mammoth gathering of wide BRI. Among key allegations was the toxic
dignitaries and policymakers is crucial for the “debt trap” for recipient countries and Beijing’s
five-year-old BRI to gain wider recognition and desire to expand its geopolitical influence to
power to move onto the next cycle with new challenge the West. Examples from Africa and
lessons learned and adjustments made. For South Asia were highlighted as the BRI’s dark
President Xi Jinping, it will be a moment of truth side.
for his leadership and China’s dream. Before the current deal, previous Thai
All ASEAN leaders, comprising one-quarter of top governments under Abhisit Vejjajiva and Yingluck
global leaders, were to attend the forum, which is Shinawatra signed several memoranda of
a testimony to each member’s support and understanding to improve connectivity and
commitment to the global scheme and ongoing infrastructure. However, back in 2015, nobody in
projects in their own countries. Thailand would have thought for a minute that
Since Thailand is also an early BRI backer and the country’s largest ever deal would drag on this
one of its recipients, increased attention has long, given the excellent Sino-Thai ties. From the
begun to focus on its marathon negotiations with start, it was supposed to be a wholly China-owned
China over the US$12 billion (K18.2 trillion) high- project, like the numerous deals that Beijing had
speed railway project, which began with much successfully completed in other countries.
fanfare at the end of 2015. China watchers are Source: Myanmar Times
eager to know what challenges and prospects both https://www.mmtimes.com/news/engaging-
sides faced over the past four years with their china-belt-and-road.html
PwC | April 2019 19Newspapers
Myanmar Times
Trade laws protecting local producers now being
drafted: MOC
23 April 2019
The Ministry of Commerce (MOC) is drafting new first NES 2014-2019, according to the MOC.
trade laws to safeguard local producers while Notably, the new sectors appear to involve higher
promoting exports of domestically-produced value-add and selected across a wider spectrum of
goods, Minister of Commerce U Than Myint said. industries compared to the current NES, which
Due to the lack of investments and technology, prioritises raw commodities including rice,
Myanmar producers face stiff competition from pulses, oilseed crops, marine products, textile and
their regional peers, who are able to manufacture garments and wood and wood products.
at faster speeds and lower costs and produce In an exclusive interview with The Myanmar
higher quality goods. Times last month, Arancha Gonzalez, executive
As such, the legislation, drafted in collaboration director of the International Trade Centre, said
with the World Bank and German development Myanmar has the potential to become a value-add
agency GIZ, will include a new Safeguard Law on exporter of goods. She added though, that the
Increased Import and Antidumping and country’s current situation is very weak, contrary
Countervailing Law. The laws aim to safeguard to its real potential. The main thing to do is to
domestic manufacturers from cheap imports and help support local small and medium enterprises
support demand for locally-made products. and to keep abreast with international demand
At the same time, the government is also raising trends. The government’s policies, rules and
efforts to promote economic growth through regulations, financial support systems and other
exports by adding new priority sectors to its practices have to be realistic and aligned with the
National Export Strategy (NES). economy’s needs.
Gems and jewellery, the digital economy, fruits Source: Myanmar Times
and vegetables, agricultural product-based food https://www.mmtimes.com/news/trade-laws-
products and industrial art products have been protecting-local-producers-now-being-drafted-
added to the NES 2020-2025, which replaces the moc.html
PwC | April 2019 20Newspapers
Myanmar Times
A weakened Myanmar still needs to stand firm in
Myitsone talks
26 April 2019
Daw Aung San Suu Kyi, in Beijing this week for next year’s General Election. Just this week,
the Belt and Road Forum, finds herself in a much thousands of people in Kachin’s Waingmaw
weaker negotiating position than on her last visit township protested against Myitsone.
to China in 2017. With Myanmar’s diplomatic In Bago Region recently, Daw Suu told local
isolation, stalled peace process and lacklustre residents to think about the project from “a wider
economy, Daw Suu has far fewer cards in her perspective.” She should explain what she meant
hands. Beijing is Myanmar’s key “defender” in the by that, and say what other factors are taken into
United Nations at a time when the government’s account. For starters, transparency is essential.
handling of the Rakhine crisis and the recent For example, officials of SPIC have been urging
jailing of two Reuters journalists have eroded its the Myanmar government to publicly disclose
standing in the international community. China details of the Myitsone contract since June 2016.
currently also accounts for a quarter of all And this is not the only enterprise which needs to
approved foreign investments in the country. come clean. With the exception of Serge Pun’s
In Beijing, the State Counsellor is expected to Yangon “new city” scheme, none of the major
discuss the highly controversial Myitsone dam projects involving Chinese players have been
project with her Chinese counterparts. The transparent. These include the grand China-
US$3.6 billion, 6000MW dam, backed by China’s Myanmar Economic Corridor (CMEC),
State Power Investment Corporation (SPIC), was Kyaukphyu deep-sea port, Kachin’s border
suspended by then-President U Thein Sein in economic zone and mega industrial park, among
2011, owing to widespread domestic opposition. others.
Recent developments suggest Daw Suu is under Source: Myanmar Times
pressure from the Chinese to resuscitate the dam. https://www.mmtimes.com/news/weakened-
As I’ve argued, resumption would place her myanmar-still-needs-stand-firm-myitsone-
National League for Democracy party at risk in talks.html
PwC | April 2019 21Newspapers
Myanmar Business
Today Yangon Government Issues Condominium Licenses
for 32 Developers
26 April 2019
Yangon Regional Government said it has issued Thein, Chief Minister of Yangon, said.
32 condominium licenses for real estate In build the condominium, developers needed to
developers as of April 6. All licenses are issued for pay the license fee of K10 million ($6,636) and a
Yangon while other regions and states have not registration fee of K20,000-K50,000 depending
received any condominium license. on the development size.
“We are implementing rules and regulations that Myanmar enacted the Condominium Law in
are appropriate to the present time and will January 2016, and the by-law was enacted in
provide opportunities. This includes the December 2017. Following the law and bylaw, the
Condominium Law. We will start issuing Ministry of Construction formed the first
condominium license for real estate developer committee named Yangon Condominium
and we are proud for that,” U Han Zaw, Union Management Committee on December 31, 2018.
Minister for the Ministry of Construction, said.
As of now, the Condominium Management
Committees have been formed in Kayah State,
Karen State, Chin State, Mon State, Rakhine
State, Shan State, Yangon Region, Mandalay
Region, Sagaing Region, Tanitharyi Region, and
Ayeyarwaddy Region in accordance with approval
from the Ministry of Construction and Union
Government.
“Private businessmen should be granted more Source: Myanmar Business Today
space in accordance with the existing https://www.mmbiztoday.com/articles/yangon-
condominium law and regulations so that they government-issues-condominium-licenses-32-
can enjoy the profits of the law,” U Phyo Min developers
PwC | April 2019 223. Weekly Investment News PwC | April 2019 23
Weekly Key Investment News
Headlines
Yangon financing platform Daung Capital raises capital for ongoing Series A round
Tokyo Century picks 20% stake in Myanmar auto leasing firm Yoma Fleet
Govt to hold tender for construction of Muse airport this year
Myanmar’s Rent 2 Own raises $3m debt from impact investor Incofin
Japan insurers enter Myanmar in joint-venture frenzy
PwC | April 2019 24Newspapers
Deal Street Asia
Yangon financing platform Daung Capital raises
capital for ongoing Series A round
22 April 2019
Daung Capital, a Yangon-based financing by Incofin Investment Management. In Myanmar,
platform, has raised capital for an ongoing Series a 53-million population country, only 5 per cent
A financing round, according to its founder. have a bank account and about 70 per cent are
Daung Capital extends credit for the purchase of financially excluded or informally served,
products like motor vehicles or electronics according to the Myanmar Microfinance
through a rent-to-own model. Targeting the Association. With the microfinance law being
working class, the company also provides enacted only in 2011, the country still has a long
advanced credit to salaried workers and education way to go, in terms of financial inclusion.
loan to workers. Financial terms of the round The country has over 200 licensed microfinance
remain undisclosed. However, one investor institutions and, international firms like Alliance
betting on Daung Capital is Mike Than Tun Win, Microfinance in Myanmar Ltd, Vision fund
an early-stage tech investor who owns Myanmar, Proximity Designs and Pact Global
Flymya.com, a travel booking platform and has a Microfinance Fund are leading the pack.
majority stake in Get Ride, a homegrown ride-
hailing platform. Daung Capital founder Leon Qiu
claims that the company has so far financed about
2,900 motorbikes with 3,500 active borrowers
present across its platform. Daung Capital’s
leadership team includes CEO Wang Yi En,
strategy head Richard Ng Tiong Beng and finance
lead Tee Choon Kiong. Rent 2 Own (Myanmar)
Ltd, a motorcycle rental service provider, operates Source: Deal Street Asia
in a similar space and is backed by Germany’s https://www.dealstreetasia.com/stories/daung-
DEG and agRIF, an impact focused fund managed capital-series-a-round-131723/
PwC | April 2019 25Newspapers
Deal Street Asia
Tokyo Century picks 20% stake in Myanmar auto
leasing firm Yoma Fleet
22 April 2019
Japanese financial services company Tokyo automotive market. Yoma Strategic is an affiliated
Century on Monday announced that it will acquire company of Serge Pun & Associates (Myanmar)
20 per cent of common shares in Yoma Fleet, the Limited and has a diversified portfolio of
auto leasing subsidiary of SGX-listed Yoma businesses in real estate, consumer, automotive
Strategic Holdings, for $26.6 million. According and heavy equipment, financial services and
to Tokyo Century, Yoma Fleet is Myanmar’s investments in Myanmar. Elsewhere in Southeast
industry leader in auto leasing and car sharing for Asia, Tokyo Century has also invested in
both corporate customers and individuals Singapore-headquartered ride-hailing unicorn
throughout the country. “By combining Tokyo startup Grab this January. It made an undisclosed
Century’s financial expertise and reputation in the investment into Grab’s car rental arm, Grab
Japanese market with Yoma Fleet’s existing Rentals, in addition to a strategic investment in
customer base and credit analysis capabilities, the Grab itself.
partners will work to grow Yoma Fleet’s current Tokyo Century had previously invested in Grab in
services as well as explore opportunities to 2016 and 2018. It has now invested a total of $175
expand into further business lines,” said the million into Grab, including funding for its rental
Japanese firm. The partnership with Yoma business. Last May, Tokyo Century picked a 5 per
Strategic will allow Tokyo Century to further cent stake in Indonesian listed lender Nobu Bank,
expand its auto business overseas and contribute which is controlled by conglomerate group Lippo.
to the development of Myanmar’s automotive
sector. Myanmar has a population of about 52
million and is expected to enjoy strong economic
growth in the coming years. The growth rate for Source: Deal Street Asia
new car sales is currently the highest in ASEAN https://www.dealstreetasia.com/stories/tokyo-
and Myanmar has the potential to become a large century-yoma-fleet-131800/
PwC | April 2019 26Newspapers
Myanmar Times
Govt to hold tender for construction of Muse airport
this year
23 April 2019
Plans are being drawn out for the construction of dealings with the Chinese. It will also improve the
an airport in Muse, which is a major hub for trade tourism industries of Myanmar and China,” said
at the Myanmar-China border. A tender will be U Chan Thar Oo, a Muse-based businessman.
held this year, said U Ye Htut Aung, deputy Currently, travelers from Yangon must first fly to
director general of the Department of Civil Lashio, which is a five-hour drive away from
Aviation (DCA). Muse. As such, direct flights from Yangon to
“We have presented this project to the minister’s Muse are expected to facilitate business and trade
office. We will announce the tender as soon as we between Myanmar and China.
receive permission. It is expected to happen this Muse is now the largest hub for border trade
year. We are proposing to build it as a domestic between Myanmar and China. Currently, there
airport,” said U Ye Htut Aung. are also arrangements between the Chinese
The new Muse airport will be constructed under a Tourism Authority and local authorities to allow
Public-Private Partnership. The size and capacity Chinese visitors to enter Myanmar via the Muse
of the airport have yet to be confirmed and will gate.
depend on the size of land available, the DCA "At present China is quite interested in cross-
said. border tours. When Muse airport is implemented,
Six private companies have already been selected it would be likely to run Muse-Mandalay flights
to participate in the tender after an invitation to and tourism is expected to improve for both
submit Expressions of Interest (EOI) was called in countries,” said U Toe Aung, a travel agent.
2017.
“The Yangon- Muse route has always been a
popular one. If a domestic airport is constructed Source: Myanmar Times
in Muse, it will make travelling much more https://www.mmtimes.com/news/govt-hold-
convenient for traders who have business tender-construction-muse-airport-year.html
PwC | April 2019 27Newspapers
Deal Street Asia
Myanmar’s Rent 2 Own raises $3m debt from impact
investor Incofin
25 April 2019
Myanmar-based Rent 2 Own, which offers interest charge. The company aims to promote
motorcycle rental services to promote mobility the rural population’s employability and
and livelihood opportunities for low-income improvement in the living standards through the
groups, has raised $3 million in debt financing acquisition of motorcycles. The company claims
from Incofin CVSO, one of the funds under the to have set up 39 branches across eight provinces
management of Belgian impact asset manager in Myanmar with nearly 100,000 clients. “The
Incofin, according to an announcement. This portfolio growth shows that there is a clear
comes six months after Rent 2 Own raised $6 market demand for motorcycles in rural Myanmar
million in funding from investors including where financial exclusion is still high and
agRIF, an impact-focused fund managed by infrastructure challenging. We see a good fit
Incofin Investment Management. Rent 2 Own between Incofin CVSO mission to support at an
also counts Germany’s Deutsche Investitions-und early stage the funding needs of dynamically-run
Entwicklungsgesellschaft mbH (DEG) and Daiwa companies and the entrepreneurial drive of R2O
PI Partners among its investors. Established in management.” Lionel Dieu, fund manager,
2016, Rent 2 Own seeks to help entrepreneurs, Incofin IM, said in a statement.
especially farmers, to generate income and grow Rent 2 Own has previously raised $4 million in
their businesses. “The new funding will enable equity investment from a pool of investors
Rent 2 Own Myanmar to continue providing including trusts, boutique investment firms, and a
economic opportunities to families of the low number of small private seed investors.
income and rural population in Myanmar,” said
Olivier Bertrand, CFO, Rent 2 Own Myanmar.
Rent 2 Own requires customers to make an Source: Deal Street Asia
upfront payment for the motorcycle rental and https://www.dealstreetasia.com/stories/rent-2-
the rest to be paid on a payment plan with an own-incofin-132628/
PwC | April 2019 28Newspapers
Nikkei Asian Review
Japan insurers enter Myanmar in joint-venture
frenzy
26 April 2019
TOKYO/YANGON -- Five Japanese insurers have yen in a life insurance joint venture, also with
teamed up with local players to enter Myanmar's Grand Guardian's life insurance arm.
fledgling insurance market, looking to provide MS&AD Insurance Group Holdings subsidiary
such products as annuities and automobile Mitsui Sumitomo Insurance will join hands with
policies to a largely uninsured population. local company IKBZ Insurance.
The Myanmar government announced in January Sompo Holdings will team with AYA Myanmar
that foreign insurance companies would be Insurance under Max Myanmar Group, while
allowed offer products in the country, either on Taiyo Life Insurance will partner with Capital Life
their own or through joint ventures, after multiple Insurance.
delays in freeing its almost completely closed Meiji Yasuda Life Insurance will gain a foothold
market. The application period for companies indirectly through its 15% stake in Thai Life
seeking to form joint ventures ends Friday for Insurance, which will form a joint venture with
nonlife insurers and May 3 for life insurers. Citizen Business Insurance.
Shortlisted applicants will be announced in May. On April 5, the Ministry of Planning and Finance
Myanmar ended a long-held state monopoly in announced the list of foreign insures granted
2013, permitting 11 local private companies to provisional licenses to operate through wholly
begin offering insurance. owned subsidiaries. The list includes Japan's Dai-
Japan's Tokio Marine Holdings intends to take a ichi Life Insurance, Hong Kong's AIA Group,
35% stake, the maximum allowed, in Grand Prudential of the U.K. and two other foreign
Guardian Insurance's casualty arm, owned by insurers.
local real estate developer Shwe Taung Group. Source: ASEAN Briefing
The investment is likely worth about 5 billion yen https://asia.nikkei.com/Business/Companies/Ja
($44.7 million). pan-insurers-enter-Myanmar-in-joint-venture-
Nippon Life Insurance will invest about 2 billion frenzy
PwC | April 2019 293. Weekly New Tenders PwC | April 2019 30
Tenders (Myanmar)
List
MOEE: Invitation for Bids, National Electrification Project, Closing Date 4th June, 2019
Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and
http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .
PwC | April 2019 31Tenders (Multilateral organizations)
List
ADB: TA-9600 REG: Southeast Asia Energy Sector Development, Investment Planning and Capacity
Building Facility - Clean Energy Regional Coordinator - CAM 02 Clean Energy Regional Coordinator
(52096-001), Closing Date: 30 Apr 2019 (Individual)
ADB: TA-9074 MYA: Capacity Development for Project Implementation - Infrastructure Sector
Coordinator - Position B (49297-001), Closing Date: 02 May 2019 (Individual)
WB: Systematic review: Analysis of transition pathways for modern energy cooking services,
Closing Date: 2 May 2019
Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org
PwC | April 2019 324. MIC Permitted Projects PwC | April 2019 33
MIC Permitted Projects (Meeting 5, 2019)
No. Name of Company Type of Investment Form of Investment
Pacific Medical Industries Limited Myanmar Manufacturing and Sales of Pharmaceutical
1 Wholly Myanmar Owned
Citizens 100 % (Myanmar) and Related Products
2 American International Partners Ltd. (Permit) Private International School (s) Wholly Foreign Owned
Importation, Storage, Distribution
Golden Myanmar Airlines Public Company
3 Transportation and Into Plane Fuelling of Wholly Myanmar Owned
Limited (Permit)
Jet Fuel
Source: DICA
PwC | April 2019 345. Upcoming Events PwC | April 2019 35
Upcoming Events (May 2019)
List
Date Location Name of Event Sector Price Focus Points
“The forum will be two days event – the first
day will consist of the speeches by high
ranking government officials, the
presentations by concerned government
authorities on the investment legal
framework and two panel discussions, the
10-11 May Yangon – Yangon Investment Investment
TBC first one ; Industry, Finance, Logistics,
2019 Lotte Hotel Forum 2019 Forum
Industrial Zones and the second panel
discussion will deal with Agribusiness,
Garment and Textile and Manufacturing.
The second day will have two site visits tour
– the first one to Thilawa Special Economic
Zone and the second is to Hilaing Thar Yar
Industrial Zone.”
“Mandalay International Livestock and
Agriculture Show (MILAS) successfully held
for the past 2 years since 2016. The 1st
Mandalay International edition in 2016 showcased over 48 brands
28-30 May Livestock and
Mandalay Livestock and Free and companies from 14 countries with total
2019 Agriculture
Agriculture Show 60 booths. We had 1300 + local and foreign
visitors in 2016. The 2nd edition in 2017
showcased over 60 brands and companies
from 15 countries with total 87 booths.”
Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .
PwC | April 2019 36www.pwc.com/mm
PwC Myanmar Weekly Business Intelligence Publication
For further information please contact:
Jovi Seet
Senior Executive Director
jovi.seet@sg.pwc.com
Brandon Lye
Director
brandon.ys.lye@sg.pwc.com
© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this
document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part
of the network of member firms of PricewaterhouseCoopers International Limited,
each of which is a separate and independent legal entity.
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