The Irrawaddy Business Roundup (July 29)

By The Irrawaddy 29 July 2017

Grab Announces Expansion, New Initiatives

The Grab Myanmar taxi-ride platform is introducing a new phase of expansion with investments in technology, driver care and local partnerships, the company announced this week.

Following a four-month beta trial, there are now more than 5,000 drivers on the Grab platform and driver-partners have reported a 30 percent improvement in monthly income on average, according to a company statement. Drivers also have access to banking and financial services through the company’s partnerships with CB Bank and Wave Money, it added.

“The next phase for Grab in Myanmar is focused on bringing a five-star experience to driver-partners and passengers, while supporting the government in upgrading its transport infrastructure. This includes making the Grab app more user-friendly, upskilling and improving the well-being of driver-partners on our platform, and creating more job opportunities for locals,” said Hooi Ling Tan, co-founder of Grab, which is headquartered in Singapore.

The Myanmar arm of the company said that new initiatives include the introduction of a Zawgyi- and Unicode font- enabled app with more safety and tech features, a ‘Driver Care’ program and partnerships with local firms to improve traffic management and driver welfare.

Yangon chief minister U Phyo Min Thein presided over a launch this week of Grab’s new phase, where he encouraged the company to build the language, business and other skills of drivers in order to provide the best service to passengers.

Mini Grids Aim to Boost Electricity Access

The use of ‘mini grids’ to improve electricity connectivity in Myanmar is growing, according to a report in the Nikkei news website.

Trial operations are due to begin this year for one mini grid operation in about 10 locations in Sagaing Region, it reported.

The project is being operated by the Yoma Micro Power venture, a joint operation between Yoma Strategic Holdings and a Norwegian government fund, and will build small power stations that generate electricity with solar panels and diesel generators.

Excess power output will be stored in batteries and payments will be collected from customers, with mobile service companies as core customers. Each site will have at least one mobile service station.

The Parami Energy Group also sees opportunities in electricity for villages, according to the report.

Parami signed an MOU last year with French state-owned utility EDF and the Magway Region government to supply mini grid electricity to 8,000 households. It is working to introduce similar projects in other regions and hopes to expand the business to one million customers in four years, according to CEO Pyi Wa Tun.

Just 32 percent of households in Myanmar use electricity from the grid as a main source of lighting, according to the 2014 census.

Improvements to the national electricity grid will likely take decades, according to analysts.

CITIC in Deal to Raise Rice Sector Standards

Two Myanmar organizations have signed a memorandum of understanding with China’s China International Trust and Investment Company (CITIC) Construction to implement an agronomics service center project, according to reports.

The deal between the Myanmar Rice Association and the Myanmar Agronomics Public Corporation and CITIC was signed in Naypyitaw last weekend, Xinhua and the Myanmar News Agency reported.

The project is due to work to boost rice production per acre production rate, enhance rice quality, mitigate production costs and increase internal and external investment in production, milling and trading.

Myanmar exports a variety of Emata rice, Ngasein rice, sticky rice, parboiled rice and broken rice to international markets including China, Sri Lanka, the European Union and South Africa. But productivity is low compared to the production of neighboring countries such as Thailand and Vietnam.

China is by far the largest market with about 1.5 million tons of rice exported to the country through border gates during the fiscal year 2016-2017, according to the report.

CITIC already has a significant footprint in Myanmar as the lead partner in a consortium that has proposed taking a 70-85 percent stake in the US$7.3 billion Kyauk Pyu deep sea port, part of China’s One Belt, One Road Initiative. CITIC also won the right to nearly run a nearby industrial park and an oil refinery.

In June The Irrawaddy reported that farmers were demanding compensation for land selected by CITIC to be part of the industrial park. Earlier this year a report by the International Commission for Jurists (ICJ) urged the government to ensure human rights in the Kyauk Pyu SEZ development.

Bus Firm Seeks Foreign Investors

A local US$10 million bus assembly and production facility is keen to enlist 50 percent foreign investment, according to DealStreet Asia.

Yangon-based Myanmar Motor Corporation Public Company (MMC) is keen to expand with an eye to export to mainly Asian markets, its president Htay Aung told the website. The company is in talks with two foreign enterprises, he added.

MMC is an exclusive dealer of the German commercial vehicle MAN. Currently, it orders parts and assembly of the vehicles in China which are then imported into Myanmar as finished buses.

The firm expects to roll out its own MAN buses from Yangon soon, after it gained a license to manufacture the buses locally in January this year. The vehicles will be assembled at a facility in Mingaladon Township which will be able to produce around 100 buses a year.

Started in 2012, MMC is a consortium of 31 local companies including Sakura Trade Center, Sakura Engineering and Construction Development, Sakura Technical Services and Sakura Auto which imports new and reconditioned cars.

Marriott in Deal for Downtown Yangon Hotel

The Hotel Sule Square and the Naing Group have signed a deal with Marriott International to open a hotel in downtown Yangon, it was reported this week.

The 200-room Courtyard by Marriott will be located in Yangon’s Sule Square as part of a mixed-use development including retail outlets and cafes.

Karl Hudson of Marriott International said, “Myanmar holds immense potential as a new tourism destination in Southeast Asia given its rich history and natural beauty. Demand is expected to grow as the government and economy are stabilizing,” according to a report in a trade website.

Forum on Small Business Development

A forum on the development of small and medium sized enterprises will be held by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) at its Mingalardon Hall facility in Yangon on the morning of Saturday July 29 (today). The event is due to bring economists, government officials and private sector interests together and all are invited.