Burma Business Roundup (Saturday, Sept. 29)

By William Boot 29 September 2012

Beijing Urges ‘Smooth’ Progress on Projects Despite Dam Suspension

The Beijing government will continue to “encourage Chinese enterprises to make investment in the livelihoods of [Burma’s] people,” China’s Vice President Xi Jinping said.

China was particularly keen to assist in agricultural cooperation and “ensure the smooth implementation of major bilateral cooperation projects,” the official Chinese news agency Xinhua quoted Xi as saying.

The comments were made during the visit to China by Burma’s President Thein Sein, who last year ordered the suspension of a major hydroelectric development project by Chinese companies on the Irrawaddy River at Myitsone.

The International Commission on Large Dams (ICOLD) confirmed earlier this year that the Chinese state-owned China Power Investment is still active in the project despite the suspension order.

ICOLD said the Chinese developer had called in foreign experts to reassess the environmental impact of the huge hydro dam, which Thein Sein halted on environment grounds.

Most of the electricity which would be generated by the dam was earmarked to be pumped out of Burma into China.

Bangkok, Naypyidaw Agree to Keep Talking on Dawei Port Project

The Thai and Burmese governments have “agreed to form a joint committee” to look at the Dawei port project but there remains no sign of any significant investment.

Thai Prime Minister Yingluck Shinawatra and President Thein Sein discussed the long-delayed project on Sept. 26 when they met in New York while attending the UN General Assembly debates.

Their brief meeting came after two planned visits by Yingluck to Naypyidaw to supposedly finalize Dawei were postponed.

The two governments tentatively agreed in July to in effect take over the stalled project, which envisages an oil transhipment facility, petrochemical plants and other industry, plus road and railway links into Thailand.

Bangkok construction firm Italian-Thai Development won a contract to develop the special economic zone but has failed to make a start due to lack of investment support.

Japanese Interest in Burma Investment is ‘Feverish’

Japanese business interest is Burma is “feverish” according to an official of the Tokyo government-funded Japan External Trade Organization (JETRO).

Up to 200 businesspeople a month are passing through JETRO’s Rangoon office compared with perhaps only 200 in a whole year previously, the agency’s senior researcher Toshihiro Kudo told a conference in Bangkok.

Kudo claimed that 50 percent of all foreign business delegations to Burma so far this year had been Japanese.

The visit to Burma by US Secretary of State Hilary Clinton had “changed the perception of [Burma] for the Japanese from a pariah to Asia’s last frontier,” Kudo told the Bangkok meeting on Sept. 26.

Garment Industry to ‘Benefit Most’ from End to US Import Ban

Burma’s garment making industry is likely to benefit most from the lifting of a US import ban on Burmese good and resources, said a leading Burmese businessman.

The end of the ban would likely create “more job opportunities for garment factories workers,” vice chairman of Yoma Bank Myat Thin Aung was quoted as telling the AFP news agency.

The ban was imposed in 2003, although by then the US was importing only textiles, hardwood and some gems from Burma with bilateral relations already strained over the military regime’s isolationist policies.

The share value of property developer Yoma Strategic Holdings and some other Burmese firms registered on the Singapore Stock Exchange rose sharply on the news of the lifting of the ban on Sept. 26.

Yoma’s shares jumped nine percent and Rangoon-based oil and gas firm Interra Resources rose five percent.

Korea’s Daewoo Firm to Help Build an Oil Refinery?

South Korean government and industry representatives are discussing the possibility of building an oil refinery and other energy projects on the back of Korean industrial conglomerate Daewoo International’s development of the Shwe offshore gas field.

The representatives met Burmese Ministry of Energy officials to discuss a range of issues at a joint cooperation committee session in Naypyidaw.

The South Koreans expressed interest in a new refinery and a hydroelectric project which could use natural gas as a back-up fuel to keep generators working when dam water levels were low.

Most of the 200 billion cubic meters of proven gas reserves under the sea in the Bay of Bengal Shwe field are being bought by the China National Petroleum Corporation (CNPC) and will be piped through Burma into China’s neighboring Yunnan Province.

Burma has inadequate oil refining facilities and must expensively import diesel and other oil fuel products.

There are plans by the Myanmar Oil and Gas Enterprise (MOGE) to build a small 56,000 barrels per day capacity refinery at Myotha in Mandalay Division which would be supplied with crude oil to be set aside for Burma by China as part of the agreement to allow CNPC to build its oil pipeline through the country.

The pipeline will transmit crude from a transhipment port on the central coast brought by tanker from the Middle East and Africa and destined for Yunnan.

However, so far it’s not clear how MOGE will finance the refinery and reports say the South Koreans and, possibly, Daewoo have been asked to help.