Hmawbi Township Fertilizer Factory will Continue Despite Local Protest

By Kyaw Hsu Mon 19 December 2016

RANGOON — Myanmar Awba Group will continue building a controversial agricultural fertilizer plant in Rangoon’s Hmawbi Township despite recent criticism of the project, company representatives said.

The project, called the Hmawbi Agricultural Input complex, is funded with support from the World Bank’s International Finance Corporation (IFC). In September, the IFC loaned US$10 million to Myanmar Awba Group, and the developer chipped in additional funds.

The finished complex, which will produce liquid and powder fertilizers for plant crops, will be worth an estimated $15 million. The construction site is located 30 kilometers (19 miles) north of Rangoon.

Since receiving the IFC loan, Myanmar Awba Group has started landscaping the eight acre site near War Net Chaung village in Hmawbi Township, according to U Nyan Lin Phyo, the chief operations officer of Awba Group subsidiary Piti Pyae Sone Company.

But some residents of War Net Chaung village organized a press conference on Dec. 16 aimed at stopping the construction. Former political prisoner U Aye Lwin joined the villagers in protest. The villagers alleged that the fertilizer complex would damage the surrounding environment and the village too, Kamayut Media reported.

Villagers said they didn’t want to attack the interests of Myanmar Awba Group, but they feared the negative impact of the fertilizer plant.

On Sunday, Myanmar Awba Group announced that it would continue construction. The company plans to complete construction in phases through final completion in 2020. The first phase is scheduled to be completed by March 2017.

“We’ve been approved by the Myanmar Investment Commission to build this complex,” said U Nyan Lin Phyo. “We submitted an environmental impact report as well. We will also speak with the village residents about their concerns.”

When completed, the Hmawbi Agricultural Input complex will produce 3 million liters (800,000 gallons) of liquid fertilizer and 2 million kilograms (4.4 million pounds) of powder fertilizer per year. This amount will supply 50 percent of total agri-input for the whole country, said Dr. Maung Maung Paing Soe, a factory manager at Myanmar Awba Group.

“We will manage wastewater carefully too,” he said.

Myanma Awba Group expects the new complex to create about 500 jobs and to supply fertilizer to more than 3 million farming families across the country.

The government currently leases the Hmawbi complex land on a 50-year BOT (build, operate, and transfer) contract. Nearby, Myanmar Awba Group and Malar Myaing operate a former government-run pesticide plant.

“The government has designated this area for agricultural input production,” said U Nyan Lin Phyo. “But we will form a committee to negotiate with the villagers and to address their concerns.”

Once the fertilizer complex is fully operating in 2020, the outstanding loan debt will be converted into company shares owned by the World Bank, according to U Thadoe Hein, Myanmar Awba Group chief executive.

During the fiscal year that ended in June 2016, the IFC invested $3.4 billion into the agribusiness supply chain across Burma to boost crop production, improve logistics and distribution, and expand credit access for small farmers. The IFC has invested in a portfolio of businesses in Burma valued at $5.6 billion as of June.