Business Roundup

The Irrawaddy Business Roundup

By Nan Lwin 29 February 2020

YANGON— Business in Myanmar’s major economic hubs was still dampened this week due to the effect of the coronavirus outbreak. The Myanmar government ordered citizens to avoid crowded places and large gatherings across the country.

Some textiles factories in Yangon closed down and further cut work hours due to a lack of raw material from China. Myanmar created its first ever barcode, making it easier to export local products, and launched a publicly-accessible online platform to provide information on major investment projects. The joint task force for the initial phase of the Dawei Special Economic Zone (SEZ) met and hopes to push the project ahead as soon as possible.

In Kachin State, the regional parliament approved a Chinese-backed business park project in the border town of Kanpiketi, a part of Beijing’s grand infrastructure plans for its Belt and Road Initiative (BRI). However, border trade with China remains badly weakened as the COVID-19 outbreak has interrupted logistic channels in and out of China.

Myanmar launches its own barcode

Myanmar launched its own globally-recognized standard barcode last Saturday, making it easier to get Myanmar’s products into international markets.

Myanmar’s new barcode, a part of the GS1 system, is 883. The GS1 system helps to quickly identify key information about products and distribute them throughout the supply chain.

In the past, Myanmar had to use the barcode numbers of other countries as it was not a GS1 member.

The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) set up the new Myanmar Barcode Association (MBA) together with the Myanmar Industrial Entrepreneurs Association, the Myanmar Retailers Association and the Myanmar Foodstuff Producers and Exporters Association.

The MBA applied for Myanmar to become a member of the GS1 system last year and the GS1 Member Association accepted Myanmar’s application in May.

“Because we have our own barcode, Myanmar can now enter the international supply chain system,” UMFCCI President U Zaw Min Win said.

The UMFCCI says local businesses can buy barcode numbers for their products at the MBA.

Myanmar launches Project Bank

The Myanmar government has launched a centralized, publicly-accessible online platform to provide information on major investment projects that fall under the country’s sustainable development plan.

The newly-launched Myanmar Project Bank aims to establish “a predictable and transparent system” and provides key data such as project descriptions, status, total project cost, financing plans and project timelines. It also notes the implementing government agency, project contact details and how each project aligns with the Myanmar Sustainable Development Plan (MSDP).

MSDP launched in 2018 and aims to align the country’s policies and institutions to achieve inclusive and transformational economic growth.

The Myanmar government said the Project Bank will help identify, screen, appraise and prioritize investment projects based on social, environmental, economic and risk indicators. The online platform will help increase public-private partnerships and opportunities for the private sector to invest in national development objectives. Some projects listed may still call for additional financing.

A total of 58 projects are currently listed in the Project Bank, having been screened by the National Economic Coordination Committee (NECC) to ensure that they align with the MSDP.

Myanmar and Thailand push for initial development of Dawei SEZ

The joint task force for the initial phase of the Dawei SEZ met last week on Friday in Bangkok and aims to get the project off the ground as soon as possible, according to a press release.

The long-delayed US$8-billion Dawei SEZ in southern Myanmar’s Tanintharyi Region would be Southeast Asia’s largest industrial complex. The budget for the initial phase is more than $1 billion, according to the management committee.

A key component of the project is a 196-square-kilometer deep seaport that proponents say will be a potential boon for firms that currently use the crowded Malacca Strait trade route. The project would include zones for high-tech manufacturing, information technology, export processing and service businesses.

The meeting was co-chaired by Mr. Danucha Pichayanan, Deputy Secretary-General of Thailand’s National Economic and Social Development Council (NESDC), and U Aung Soe, Permanent Secretary of the Ministry of Commerce.

Italian-Thai Development PCL (ITD) was initially granted a 75-year concession to develop the project and attract investment in Dawei in 2008, with the project to be completed in 2015. Financial constraints saw ITD withdraw in 2013 but two years later both countries agreed to allow ITD and other companies to develop a site of up to 27 square kilometers.

The initial phase, which includes an industrial estate, power plants, a small port and a liquid natural gas terminal, was granted to a consortium led by ITD in March 2016, just before the National League for Democracy (NLD) government came into office. The Dawei SEZ management committee and the ITD consortium are finalizing the conditions for the initial phase of construction.

In 2015, Japan joined ITD’s joint venture, Dawei SEZ Development Company Limited, saying the project lies along its Southern Economic Corridor for the greater Mekong region, a part of Tokyo’s development strategy.

Other shareholders are Thailand’s Neighboring Countries Economic Development Cooperation Agency (NEDA), Myanmar’s Foreign Economic Relations Department and the Japan Bank for International Cooperation.

In March 2018, the Union Parliament approved a 4.5-billion baht (US$137-million or 220.5-billion-kyat) low-interest loan from NEDA for a two-lane highway linking Dawei to Thailand.

Kachin state approves Chinese-backed business park project

The Kachin State parliament approved a proposal on Thursday to implement a Chinese-backed US$22.4-million business park project in the border town of Kanpiketi, a part of Beijing’s grand infrastructure plans for the BRI.

According to the State Minister of Finance, Revenue, Planning and Economy U Wai Lin, Kanpiketi Business Park will cover nearly 70 acres in the border town. Kanpiketi is part of northern Kachin State’s Special Region 1, an area controlled by the New Democratic Army-Kachin (NDAK) militia, which is allied with the Myanmar military.

The project will be developed by Myanmar Heng Ya Investment Development Company Ltd, a joint venture of Myanmar’s Kampaiti Development Company Ltd and China’s Yunnan Tengying Trading Company Ltd.

The business park includes plans to construct a South Asia–Southeast Asia Culture Park (Zone A) on 12.65 acres, two Trade and Logistic Zones (Zones B and D) on 8.8 acres and 12.7 acres, a Border Inspection Gate (Zone C) on 5.1 acres and a Business Shop (Zone E) on 1.65 acres.

The business park is one of three cross-border economic cooperation zones under the China-Myanmar Economic Corridor (CMEC) agreement. The CMEC will reach from China’s Yunnan Province to Mandalay in central Myanmar and then stretch south to Yangon and west to the Kyaukphyu SEZ in Rakhine State.

Border Trade Drops US$200M

Myanmar-China bilateral border trade dropped by US$209 million between Jan. 23 and Feb. 18 compared to the same period last year due to the coronavirus outbreak, according to U Khin Maung Lwin, assistant permanent secretary for the Ministry of Commerce.

The value of border trade through the Muse, Chinshwehaw, Lweje and Kanpiketi border trade zones totaled over $270 million—a decline from $479 million in the same period last year.

Before the coronavirus outbreak, the value of daily trade through the border trade zones was between $10 million and $14 million.

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