Business Roundup (January 21)
By The Irrawaddy 21 January 2017
Burma Growth Rate Revised Downwards
Burma is expected to see economic growth of 6.9 percent in 2017, down 1.5 points from a previous estimate, according to the World Bank’s Global Economic Prospects report released earlier this month.
The report said that real-term growth in 2016 was estimated to be 6.5 percent, down 1.3 percentage points from an earlier estimate in June last year, the Nikkei Asia Review reported.
Real-term growth in Burma declined for three straight years and fell below 7 percent in 2016 for the first time in five years, according to the World Bank. It attributed the falling growth rate to a slow real estate market, slower export expansion and reduced foreign investment.
The new government’s delay in announcing detailed economic policies was encouraging a cautious approach among potential foreign investors, the Nikkei report added.
A delay in the start of operations of the reconstituted Myanmar Investment Commission after the new government came to power also contributed to a backlog in foreign investor applications last year, according to the Nikkei report.
Thailand Delegation Seeks to Boost Trade
Thailand’s deputy Prime Minister Somkid Jatusripitak will lead a Thai business delegation to Burma at the beginning of February, the Bangkok Post reported.
The visit by 40 delegates is scheduled for Feb. 2-3 and will seek to expand bilateral trade and investment, including border trade.
Representatives will meet Burmese business people to discuss possible partnerships on investments as well as financial and capital market developments, according to Isara Vongkusolkit, chairman of the Thai Chamber of Commerce.
The visit is expected to include a meeting with State Counselor Daw Aung San Suu Kyi, the Bangkok Post reported.
Also on the agenda will be discussion of a joint special economic zone between Mae Sot and Myawaddy on the Thailand-Burma border, and the improvement of roads between Dawei and Phu Nam Ron in Thailand’s Kanchanaburi Province, and between Myeik and Sing Khon in Thailand’s Prachuap Khiri Khan Province.
Burma-Nepal Air Link Set to Start Next Month
Nepal’s Himalaya Airlines plans to expand to Burma with a twice-weekly service between Kathmandu and Rangoon due to start around the end of February, according to the Kathmandu Post.
The return fare on an Airbus 320 will start at around US$320, the report said.
Nepal is a popular destination for Burma travelers, the Post said. Last year more than 25,000 visitors from Burma visited the country, mainly overland from India. Some 15,000 of the total visited Lumpini, the birthplace of the Buddha.
Himalaya Airlines will also start a service from Kathmandu to Kuala Lumpur in Malaysia.
“The launch of new destinations is part of Himalaya’s commitment to connect Nepal directly with Asia Pacific countries and boost tourism as well as trade opportunities,” said Vijay Shrestha of Himalya Airlines, which currently operates flights to Doha and Colombo.
SMI to ‘Vigorously Refute’ Complaints
Singapore Myanmar Investco (SMI), a company with retail, auto services, and logistics operations in Burma, said this week that it has been told of an intention to make a criminal complaint about the firm to the state courts of Singapore, the Straits Times reported.
The complaint is reportedly related to SMI’s divesting 97 percent of its stake in subsidiary telecoms tower firm the Myanmar Infrastructure Group, in a sale to Hong Kong-based Shining Star International Holdings.
In a statement, SMI said that the complaint by German lawyers acting for Golden Infrastructure Group (GIG) was in regard to the alleged disregard of the rights of GIG under a joint venture agreement, and “failure to make timely disclosure” of allegations made by GIG.
Singapore Myanmar Investco said it “intends to vigorously refute the complaint if GIG were to proceed with lodging the complaint.”
Among other businesses, SMI operates a large amount of retail space at the new international terminal of Rangoon International Airport.
Sembcorp Signs Gas-Fired Power Plant Deal
Singapore-based Sembcorp Industries announced a new agreement this week with the Ministry of Electricity and Energy for its 225MW gas-fired power plant in Mandalay, the Straits Times reported.
Under the agreement, Sembcorp Myingyan Power Company will build and operate the power plant for 22 years. The plant will then be transferred to the government of Burma.
The US$300 million project is set to become one of Burma’s largest gas-fired power plants.
United Oil in Deal with Lighthouse Enterprise
United Global, a unit of the United Oil Company, will form a joint venture with Burma-based Lighthouse Enterprise, Dealstreet Asia reported.
The joint operation agreement is for a three-year period and covers marketing, distributing, and sales of specialized lubricant products in Burma.
Both companies will make an initial capital contribution of US$90,000 in the deal.
The deal will enable United Global to expand its presence in Burma, the company said in a filing to the Singapore stock exchange (SGX).
Fast Food Chain Looks to Expand in Burma
Malaysian fast food operator TCRS expects a local franchise holder to operate five chicken and rice outlets in Burma by the end of 2017, according to a statement.
The company is projecting 19 percent overall sales growth in 2017, according to the statement. It operates a total of 88 outlets in Malaysia, two in Singapore and one in Brunei.
TCRS was founded in 2000 and calls itself the largest chicken and rice restaurant chain in the world.