Burma Business Roundup (Saturday, Dec. 8)

By William Boot 8 December 2012

Big Thai Cement Firm Plans Major Factory in Burma

Major Thai cement maker Siam Cement Group (SCG) is to move its main manufacturing base to Burma, according to the International Cement Review newspaper.

The Bangkok-based giant plans to build production facilities in southeastern Burma’s Tenasserim Division, it said, quoting a SCG company manager.

“SCG is planning to manufacture its main products in [Burma] and is willing to open four retail stores in Yangon, Mandalay Naypyidaw and one other major city,” said Soontornpol Veerapravati.

World Cement magazine said SCG also wants to build a hydro dam to provide electricity for the factory or factories.

Industry observers expressed surprise that SCG is not considering Dawei for the location of a factory, given the proposals by other Thai firms to develop an industrial port there.

“If it goes ahead Dawei will have transport infrastructure, at least linking into Thailand,” said an industry source in Bangkok speaking on condition of anonymity. “The siting of production facilities in the deep south of Burma is surprising also when the initial demand for cement is likely to come from the greater Rangoon region.”

SCG, which already exports millions of tonnes of cement to Burma, has given no timetable for Burmese developments nor disclosed the level of investment.

Patience a Virtue for Would-be Investors, Says US Study

Success for foreign investors in the new Burma will need much patience as well as getting the “model of entry right,” a new study of opportunities said.

Burma is poised to “assume great geopolitical-business importance in years to come,” the survey by US think tank Frost & Sullivan said.

And China’s dominance of much of Burma’s economy is expected to change, said the firm’s vice president Vivek Vaidya in the survey.

“Southeast Asian companies are rushing to invest in the country. US and international companies are also doing so, but on a more selective and wait-and-see nature,” said Vaidya.

But like other surveys before it, the Frost & Sullivan report warns that many potential investors will remain in a wait-and-see mode until there is a substantial improvement in basic infrastructure such as electricity supply, water, ports and roads.

Burma should benefit from having a young population, but only if there is a major migration to urban centers of development, as happened in China, the report added.

Thailand a ‘Gateway’ for Tourists to Burma

Thai Tourism planners want to develop Thailand to become a base for tourists to visit neighboring countries such as Burma.

“As neighboring countries open up, tourists will want a fresh experience, so we can capitalize on this development and market Thailand as a gateway,” the president of the Association of Thai Tourism Marketing said this week.

By creating easy links to Burma, Laos, Cambodia and Malaysia, Thailand could attract new visitors, said the association’s Mingkwan Metmowlee.

There were two possible cross-over links between Thailand and Burma which the association should look at, he said. These are via Thailand’s far north province of Chiang Rai and through a new road being built from the Thai border town of Kanchanaburi to Dawei on Burma’s southeast coast.

Thai firms have drawn up plans to develop isolated southeastern Burma by constructing a port at Dawei as well as an industrial zone, but the project has been stalled all this year due to a lack of funds.

Thailand had logged almost 16 million tourists in 2012 up to the end of September, the Department of Tourism and Sports said, and was on target to clock 20 million visitors in a year for the first time.

Russian Trade Group ‘Interested in Oil and Gas Sector’

A Russian trade delegation made a low-key visit to Burma this week led by Deputy Minister for Trade and Industry Georgy Kalamanov.

The delegation met Minister for Energy Aye Myint to discuss “bilateral cooperation in the industrial sector,” The New Light of Myanmar reported.

It’s understood from embassy sources in Bangkok that the Russians are interested in investing in Burma’s onshore and offshore oil and gas business development as well as heavy construction projects.

Several small privately owned Russian firms are already engaged in some onshore projects in enhanced recovery programs in old oil fields in central Burma.

However, Russia has considerable experience in offshore exploration and production, especially of gas. Two state-owned Russian firms—Gazprom and Zarubezhneft—have been involved in helping to develop Vietnam’s offshore oil and gas resources.

Luxury Cars, Condos, Jewelery on Sale in Naypyidaw

A curious trade show will take place in Naypyidaw next week, offering a wide range of goods and services from jewelery to farm tractors to luxury cars.

The Naypyidaw Expo and Car Show, from Dec. 12 to 16, will involve 300 companies, according to the organizers.

Held in the isolated capital with a small population, observers question who the mostly luxury goods will be aimed at.

On offer will be medicines, furniture, condominiums and cosmetics—as well as agricultural equipment, machinery and car accessories.