Economy

The Irrawaddy Business Roundup (February 8, 2014)

By William Boot 8 February 2014

Nissan to Spend $200M on Vehicle Factory in Burma

Japanese automaker Nissan will invest more than US$200 million in an assembly factory in the Pegu Division north of Rangoon, a report said.

Work on the factory, due to be operational by 2015, will begin once a land tenure agreement is negotiated, said Eleven Media quoting Burma’s United Diamond Motor Company, part of Tan Chong Motor Holdings of Malaysia.

Nissan was reported by the Japanese business news agency Nikkei last September to be planning a production plant in Burma.

Nissan plans to “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.

Last year Japan’s Suzuki Motor Corporation re-opened its Rangoon factory to build pickup trucks, producing about 100 vehicles per month. The factory had been closed down since 2010.

New 5-Star Hotel in Rangoon Will ‘Boost Tourism Industry’

A new five-star hotel planned for Rangoon will help boost much-needed facilities for Burma’s burgeoning tourism industry, said regional travel trade magazine TTR Weekly.

The hotel will be the focal point of a shopping mall plus offices, and will include serviced apartments, said the magazine.

A license to build the complex, details of which have not yet been given, has been awarded to Adventure Myanmar Tour & Incentives Company, “a well-known travel firm based in [Rangoon],” said TTR Weekly.

The hotel and mall is to be built on land on Shwedagon Pagoda Road in Dagon Township, it said, quoting Rangoon’s investment commission.

The Ministry of Hotels and Tourism said in January that Burma had 2.04 million visitors in 2013, almost a doubling of the number in 2012.

The main problem facing Burma’s tourism industry was insufficient accommodation for visitors, said TTR Weekly.

Burma’s Rice Industry Probing New Markets in European Union

Burma is test-marketing quality rice to European countries as part of an agreement with the European Union, said the Myanmar Agribusiness Public Corporation (MAPCO).

Another batch of quality rice is also being shipped to Japan, MAPCO director Soe Tun was quoted as saying by Eleven Media.

Japan is helping Burma’s rice industry to develop new disease-resistant varieties with better crop yield for what MAPCO said was an “emerging market that specializes in top quality products.”

“We are now preparing to export 6,000 tonnes of rice that have already been awarded the tender. Japan is going to buy native paddy strains and [Burma] is now test exporting high-quality rice to European countries,” Soe Tun said.
The exports to Europe are part of a favorable trade scheme, he said.

Army Land Theft a Thing of the Past, Claims Burma Govt

More than 150,000 acres of land confiscated by the Army in recent years is to be returned to its previous holders, according to Deputy Minister of Defense Major-Gen Kyaw Nyunt in a parliamentary statement.

“There are no more land seizure programs in the armed forces but instead land give-back programs,” he claimed.

The Army has already returned about 10,000 acres, and “partially given back” 26,512 acres, Kyaw Nyunt said.

However, these promises come against a background of continuing reports of land seized by military units or businesses linked with the Army.

The Irrawaddy reported last month on a British parliamentary statement of concern about land clearances in Shan State in connection with an Army-linked commercial teak logging operation adjacent to a planned hydro dam on the Salween River.

The British parliament heard about Shan Human Rights Foundation allegations that villagers in Murng Paeng Township are being used as forced labor by Burmese soldiers providing security for “military-linked logging operations above the planned Ta Sang Dam.”

Conference Organizers Hope Mobile Banking Will Spur Economic Growth in Burma   

Burma’s economy could be drastically reshaped through the fast adoption of banking via mobile phone, organizers of an e-commerce conference in Rangoon claim.

“[Burma’s] transformation and investment in internet and mobile infrastructure will enable banks to launch safe and simple payment solutions,” said a statement from one of the conference participants, Mastercard.

An outline of how this could be achieved will be presented at the Mobile Payments and E-Commerce Asia Pacific Summit, to be held in Rangoon February 13-14, said organizers Magenta Global of Singapore.

“The emerging economies in this region are likely to see a huge increase in mobile subscribers who are mostly unbanked,” said Magenta Global chief executive Maggie Tan in a statement.

“Banks must implement at least one mobile banking offering, either via messaging, mobile browser or an app-based service. Some banks are already doing so with larger banks deploying two or more of these technologies. This [conference] has been specially convened to take the industry forward.”

The Rangoon conference, with participants from Thailand, Cambodia, India, Singapore, Japan, Vietnam, Pakistan and China, will discuss how Burma’s e-commerce can benefit from the expected development of new mobile phone networks and nationally available Internet, said Tan.

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