The Irrawaddy Business Roundup (Nov. 1, 2014)

By William Boot 1 November 2014

US Soap Conglomerate Cleans Up in Burma With $100Mln Deal

American soap and hygiene products giant Colgate-Palmolive has paid around US$100 million to buy Burma’s biggest toothpaste brand Laser.

The deal is “one of one of the biggest acquisitions by a foreign company” in Burma, the Wall Street Journal said.

“Colgate confirmed it had acquired the Laser brand of toothpaste and personal care products from Shwe Ayar Nadi Company, a local privately held business group,” the Journal said.

The two firms did not disclose the value of the purchase but the US business newspaper cited unnamed Colgate sources saying it was approximately US$100 million.

“[Colgate-Palmolive] will acquire Laser’s manufacturing and tube-forming facilities and will produce Laser brand toothpaste, along with importing Colgate brand goods from Thailand,” the Journal said.

Sales of personal hygiene and beautifying products in Burma totalled US$318 million in 2013, according to research firm Euromonitor International, which said sector growth was running at 14 percent.

“Euromonitor has identified [Burma] as one of the 20 markets that will offer the most opportunities for consumer goods companies globally,” the Wall Street Journal said.

Thai Bank’s $60Mln to Turn Rangoon Courthouse into 5-Star Hotel

A Thai bank is lending US$60 million to finance the conversion of one of Rangoon’s colonial-era buildings into a five-star Kempinski brand hotel.

Siam Commercial Bank has advanced the loan to turn the former Small Claims Court building on Strand Road into a 230-room hotel that will be managed by Germany-based Kempinski AG.

The conversion and refurbishment work will be done by Burma’s JL Group and Thai firm Kanok Furniture and Decoration, said a bank statement.

The new hotel is due to open in 2016, the bank said. Other reports have said up to 500 jobs will be created, mainly service staff.

There is a close link between Siam Commercial Bank and Kempinski, since both are majority-owned by Thailand’s Crown Property Bureau, an agency that manages the Thai royal palaces and also administers the country’s biggest property and land portfolio.

A Kempinski managed hotel is due to open in Naypyidaw on Nov. 1, in time to accommodate high-profile delegates to the Asean and East Asia summits from Nov. 9-12. Located next to Naypyidaw’s convention center, it has 106 rooms and 35 suites.

The hotel website lists its most expensive accommodation, the Royal Suite, at $4,000 per night.

Over 3Mln Motorbikes on Burma’s Roads ‘Smuggled Into the Country’

Four out of every five motorcycles on Burma’s roads were smuggled into the country, a senior government official has claimed.

That means more than 3 million bikes are illegal, Deputy Railway and Transportation Minister Chan Maung said.

“The number of illegally imported motorcycles may be higher still as many are thought not to have registered for licence plates,” the Myanmar Times said, referring to a statement made by Chan Maung in Naypyidaw.

Most of the illegal bikes are smuggled across the border from China, but some also enter Burma from Thailand.

Chan Maung warned that there would be no more amnesties, which allowed illegal bikes to become officially registered. In future, owners caught with illegal motorbikes will be fined or have the vehicles confiscated, he said.

Western-Style Finger-Licking Fast Food Set for Bonanza in Burma

Growing numbers of people moving from village to city and rising urban incomes will create a fast-food boom for foreign brand franchises, a report said.

“Opportunities for food & drink companies in [Burma] will be driven by strong macroeconomic and demographic fundamentals,” said Business Monitor International (BMI).

These factors are making Burma a new frontier market for fast food companies such as Yum! Brands, which recently announced it would open a KFC franchise in Rangoon in 2015.

“With a population of 50 million, [Burma] is a sizeable market. Fast food companies will also benefit from ongoing urbanization as we expect the share of urban population to reach 40 percent by 2024, up from 34 percent in 2014,” BMI said in an analysis of the market.

“As disposable income and private consumption rise over the next few years, the middle class will expand, resulting in strong opportunities for food companies.”

UK Foreign Office’s Burma Links ‘About Business, Not Human Rights’

The British Foreign Office has dropped human rights as its priority in Burma in favor of promoting trade, an NGO has alleged, as Foreign Minister Hugo Swire avoided questions in the London House of Parliament this week about the rise in political prisoners in Burma.

“Swire also avoided answering a question in Parliament about whether or not he shared concerns expressed by the UN Special Rapporteur on Burma about the backtracking of reforms,” Burma Campaign UK said.

“Hugo Swire is either trying to avoid talking about the number of political prisoners because it is embarrassing for his government, which has been praising the regime, or because he doesn’t want to embarrass the Burmese government, as he is trying to win business deals with them,” said campaign director Mark Farmaner.

However, the embassies of the United States and Britain this week urged the Burmese government to order a transparent investigation into the recent killing by the Burma Army of Burmese journalist Aung Kyaw Naing.