Burma Business Roundup (Aug. 24)

By William Boot 24 August 2013

Burma Mobile Network Developer Telenor Names its Partners

One of the two winners of mobile network development licences in Burma, Telenor, has named three other foreign firms it will involve in its plans.

“Telenor confirmed that the company has signed memorandums of understanding with China’s equipment maker Huawei, Ericsson of Sweden and India’s Wipro,” the industry news website Telecom Lead said.

“Formal agreements with these companies will be finalized when Telenor receives its operating licence. The [Burma] government has said that the licences will be issued by the end of September.”

Huawei’s mobile phone handsets are already on sale in Burma. Ericsson makes wireless network equipment and Wipro specializes in information technology.

“Telenor said that the company could not yet comment on what role the three companies will play in its network development plans,” said Telecom Lead.

The other mobile network licence holder is Ooredoo of Qatar.

Thailand’s PTTEP Finds More Gas in Burma’s Gulf of Martaban

PTTEP of Thailand said it found “quantities of gas” in all four wells it has drilled in its offshore Block M3 in Burmese waters of the Gulf of Martaban.

The drillings “resulted in gas flow rates of approximately 34.5 million standard cubic feet per day (977,000 cubic meters) with associated condensate flow rates of approximately 195 barrels per day for the Aung Sinkha-3 well,” PTTEP said in a Bangkok stock exchange statement.

The announcement gave no indication of the size of the discovery but said the firm would “conduct additional drilling of appraisal wells in 2014 for potential development and production.”

Earlier this year PTTEP said it hoped to begin commercial production at M3 in 2016.

PTTEP acquired 100 percent operatorship of the M3 and M4 blocks in August 2004 and said then it would initially spend US$23 million on seismic surveys and drillings. It sold a 20 percent share to Mitsui Oil Exploration Company in March this year, but this is still waiting for approval from the Burmese government.

PTTEP holds a number of licences in the Gulf of Martaban, the biggest of which is the Zawtika field, where gas production is expected by the firm to begin at the end of this year.

News about the M3 gas discovery was made after PTTEP had to answer media reports in Burma about its acquisition of two other blocks in the Gulf of Martaban, the M7 and M8.

The Myanmar Times newspaper alleged that former Burma Minister of Energy Than Htay was removed from his job earlier this year over the M7 and M8 licences because of industry complaints that they had not been awarded fairly.

PTTEP said in a statement that its negotiations to acquire the two blocks began in 2010 and were correctly done and did not involve any form of bribery.

Garment Industry Exports Double in Value in First Quarter

Burma’s garment makers exported a record volume in the first quarter of this year, almost double in value over the same period of 2012.

Exports for the January-March period were valued at more than US$300 million, said the Myanmar Garment Manufacturers Association, as quoted by Eleven Media.

The biggest buyers were Japan and South Korea, although orders from the European Union are expected to rise following Burma’s admission to the EU’s trade preferences scheme.

The greatly improved textile industry figure coincides with Burma’s overall foreign trade for January-March, growing above $7 billion, which is a 15 percent rise over the first quarter of 2012, according to Ministry of Commerce figures.

Much of the foreign trade volume in the quarter was due to a sharp rise in imports. The overall value for the whole of 2013 could be $5 billion, the ministry said.

Burma is to be helped by a World Trade Organization (WTO) program to gain more access to international trade.

The WTO will include Burma in its enhanced framework scheme, which gives guidance to least-developed countries on trade linked to economic growth.

The aim of the program is to make trade a driver for sustainable development, according to the Ministry of Commerce.

New Bridge Planned to Link Rangoon City with Thilawa Industrial Zone

One of the Japanese companies due to develop the Thilawa special economic zone on the edge of Rangoon has agreed to build a new bridge across the River Pegu to provide a direct link with the city, a report said.

The Itochu Corporation will build the bridge but the exact location across the river, also spelled Bago, has yet to be decided, said Eleven Media, quoting the Ministry of Construction.

Itochu is one of several Japanese firms linked with the Thilawa development. They include Marubeni Corporation, Mitsubishi Corporation and Sumitomo Corporation.

Thilawa, downstream from the old Rangoon port near the river estuary mouth, was originally planned to be 25 percent complete by 2015, but land access problems as well as electricity and water supply shortages have prevented progress.

Thilawa is intended to attract manufacturing and processing businesses and is supposed to provide up to 200,000 jobs.

Mya Hlaing, a spokesman for farmers in the development area, told The Irrawaddy this week that although the project is due to begin next month, the process of land compensation remains unclear.

Japanese Airline to Fly Daily to Rangoon to Meet Demand

Major Japanese airline All Nippon Airways (ANA) will begin operating daily flights between Tokyo and Rangoon from the end of September to meet rising demand from businesspeople and tourists, a business travel magazine said.

ANA at present operates direct flights between the two cities three times per week.

The airline will also introduce bigger aircraft in the route to more than triple the number of passengers per flight. From September, ANA will use Boeing 767s with 202 seats, reported Business Traveller magazine.

“ANA states that it expects strong economic growth from [Burma] in the coming years and, therefore, aims to capitalise on the projected increase in demand,” the magazine said.

More than 20 foreign airlines now operate in and out of Burma, but it is mostly Asian airlines that offer direct flights.