Burma Business Roundup (September 21)

By William Boot 21 September 2013

Japan’s Nissan to Assemble Cars, Trucks at new Burma Factory

Major Japanese vehicle maker Nissan Motor Company is to open a factory in Burma to produce cars and small trucks, Toyko business newspaper Nikkei reported.

Nissan plans to partner with Tan Chong Motor Holdings of Malaysia and an as yet unnamed Burmese firm to build a small plant which will “produce several thousand small passenger cars and pick-up trucks a year,” said Nikkei.

The vehicles will be assembled from parts built in other Nissan factories in the region, including Thailand, it said.

The location of the factory and details of the investment were due to be announced during a visit to Burma by Nissan’s chief executive Carlos Ghosn.

It will be the second production start-up by a Japanese vehicle manufacturer. Earlier this year, the Suzuki Motor Corporation announced the re-opening of its Rangoon factory to build pickup trucks. The Suzuki factory, which has been closed since 2010, is initially producing 100 vehicles a month.

Several other major international vehicle manufacturers have announced plans to enter the Burma market, where demand for cars especially has mushroomed since 2011.

Mazda Motor Corporation said this week it will start selling new vehicles soon in Burma; the US’s Ford Motor Company opened its first showroom in Burma in April; and General Motors is planning to follow suit.

Between October 2011 and April 24, more than 160,000 cars, mostly second-hand Japanese vehicles, have been imported, the Ministry of Commerce has said. The figures suggest a more than 50 percent increase in the total number of cars in Burma since October 2011.

China Seeks Contracts to Build Roads, Bridges and Improve Ports

Chinese companies are keen to win contracts to help develop Burma’s transport infrastructure, Beijing’s ambassador Yang Houlan said.

“The Chinese government attached importance to Sino-Myanmar cooperation in the transport sector, supporting the strength of Chinese enterprises to actively participate in port development, dredging and road and bridge construction,” the official news agency Xinhua quoted Yang saying.

He made the proposal when he attended an official handover in Rangoon harbour of 19 dredgers and supporting vessels supplied by the state-owned China National Aero-Technology Import & Export Corporation, also known as CATIC Beijing.

The dredging equipment was supplied with the assistance of a preferential loan provided by the Chinese government, said Xinhua.

Foreign Firms Invited to Bid for 2nd Business District Project in Rangoon

Rangoon’s City Development Committee is looking for foreign companies to help develop a new business center in Myangon Township.

The so-called Secondary Central Business District is meant to include offices, shops, a hotels, cinemas, theaters, and an exhibition and conference center, said a government notice announcing the project.

The site available for development is 36,500 acres, said the committee notice. Tenders are invited from foreign or domestic companies alone or in joint venture partnerships.

It said financial and technical bids for the contract must be submitted by December 2 along with a bid security in the form of a bank guarantee valued US$1 million.

EU Hears Allegations of Abuse of Burmese Workers at Thai Factory

Questions have been asked in the European Parliament about the treatment of Burmese workers in Thailand.

The questions were raised by British parliamentary deputy David Martin after charges of criminal defamation and damage were brought in a Bangkok court against Burma-based British human rights campaigner Andy Hall by the fruit juice processing company Natural Fruit.

Hall had earlier made a film, commissioned by a Finland NGO, documenting alleged abuse of hundreds of Burmese workers at Natural Fruit factory.

Hall said the factory employed illegal immigrants including Burmese children, paid wages below the Thai national minimum, made unjustified financial charges and confiscated workers’ passports tantamount to debt bondage.

Natural Fruit denies all the allegations.

Hall’s film was commissioned by Finnwatch concerned about imports into Finland of unethical produce.

In a September 18 video now on YouTube, Finnwatch executive director Sonja Vartiala said: “The legal process [in Thailand] is a farce. Natural Fruit is suspected of serious human rights violations. It’s the company’s managers and not Andy Hall who should be facing the threat of a trial”.

She called for the EU to pressure Thailand to properly enforce labor rights for all workers.

Swiss Nestle to Open a Factory in Burma, State Agency says

Giant processed foods company Nestle has established a subsidiary in Burma and will soon build a production factory in the country, according to the Directorate of Investment and Company Administration (DICA).

Nestle Myanmar was formed on September 16, said DICA quoted by Eleven Media.

The Switzerland-based giant produces such internationally renowned brands as Nescafe instant coffee, Kit Kat chocolate biscuit, and Maggi soups and sauces.

The firm also produces baby foods, numerous snack products, and breakfast cereals, but it’s not clear yet which will be produced in Burma.

DICA also said South Korean industrial conglomerate SK Group has entered the Burma market by setting up a construction industry subsidiary, SK Group Construction Myanmar.

US, Indian Oil Firms to Explore Bangladesh Seas adjacent to Burma

The Bangladesh government is to award three offshore blocks in the Bay of Bengal this month to ConocoPhillips of the US and India’s Oil and Natural Gas Corporation (ONGC), Dhaka newspapers said.

The two firms were the only bidders for the blocks which were among 12 offered by the government in December of 2012. No bids for the other nine blocks were received.

The two firms secured a concession allowing them to sell up to 50% of any production to third parties without reference to the state oil and gas firm Petrobangla, said The Star newspaper.

ConocoPhillips will get block 7, while ONGC will take blocks 4 and 9, the paper said.

ONGC is a partner in the development of Burma’s Shwe gas field in the Bay of Bengal, where the two neighbors had a naval confrontation in 2008 before their joint sea border was finalised following UN arbitration.