Economy

The Irrawaddy Business Roundup (March 5, 2016)

By Simon Lewis 5 March 2016

General Electric Expands in Burma, With Caution

A company report submitted to the US Embassy in Rangoon last month details the expansion of American industrial conglomerate General Electric (GE) into a number of sectors after re-engaging with Burma in 2012.

GE is working in the health care, aviation leasing and power sectors, said the report, dated Feb. 19, which was submitted under a US government rule that requires any American firm investing more than $500,000 in the country to file submissions.

In a recent development, the company said, it will supply gas turbines to a major power generating project.

“GE was also recently awarded a contract to supply two state-of-the-art gas turbines to the Myingan Power Project in central Myanmar, which is owned and operated by Singapore-based Sembcorp, operating as an IPP [independent power producer] and selling electricity to MEPE,” the state-run power firm, the filing said.

Sembcorp Utilities announced in December that it had signed an agreement with the Burmese government to develop the 225-megawatt plant in Mandalay Division. A 20 percent stake in the project is held by a local firm thought to be owned by a prominent Mandalay businessman with links to the Kokang region bordering China. The World Bank is considering putting $45 million into the project.

GE has also sold turbines for a gas-fired power plant in Rangoon’s Ahlone Township run by Thailand-based Toyo Thai Power Corp. The US firm will also rehabilitate two gas turbines in Rangoon and supply turbines to China Energy Engineering Group, in a World Bank-funded project in Thaton, Mon State.

The conglomerate is also providing aircraft to the state-owned Myanmar National Airlines, and equipment to the oil and gas sector.

“Overall, GE’s focus has been on supplying safe, efficient and sustainable products and services to meet the substantial infrastructure needs of the Myanmar people,” the report said, noting that the company was taking a careful approach to operating in Burma, where concerns over labor and land rights abuses, and over the involvement of armed groups in business, remain. A foundation linked to GE has commissioned a report on the human rights impacts of the extractive industries sector.

“GE’s approach to operating in Myanmar has been, and will continue to be, measured, incremental, and informed by due diligence, commensurate with the size, scope and nature of our operations,” it said. “GE’s activities in Myanmar are in compliance with US law and in keeping with the company’s human rights commitments.”

Rangoon Gets Uber-Like Taxi Ordering Service

An application has been launched that lets users in Rangoon to order a car or “limo” with their mobile phone.

Travel company Oway in January launched “Oway Ride,” according to the service’s website.

The app—which can be downloaded to smartphones on Google’s Play Store or the Apple App Store—mimics the functionality of Uber, and the founders hope it can gain the same popularity Uber has found around the world.

“One of the many advantages of riding with Oway Ride is that fare is calculated within the app based on the distance and time that rider travels,” the website says. “So, you only have to pay as you go!”

According to a report this week on the website Web in Travel, users are offered the choice of “Standard, Prime or Limo” vehicles.

Oway CEO Nay Aung told Web in Travel that the service would initially be available in Rangoon only. “With Yangon as the main economic hub city in Myanmar, it is logically [sic] to launch here first with a hundreds of cars and then expand the service rapidly into other cities, such as Mandalay and Naypyidaw,” Nay Aung was quoted saying.

Burmese Workers to Get Compensation From Thai Factory

A factory in Thailand that processes tuna has agreed to pay out a total of $1.3 million in compensation to mostly Burmese workers, Agence France-Presse reported this week.

Hundreds of workers in the migrant worker hub of Samut Sakhon are set to receive compensation after demonstrating to demand compensation, the report said. About 1,000 workers went on strike demanding back pay in line with Thailand’s minimum wage, and forced the company, Golden Prize Tuna Canning, to enter negotiations involving the country’s military junta.

Some of the workers have already been paid, AFP quoted a Thai labor official as saying.

The Thai seafood industry relies on migrant laborers from Burma and Cambodia, many of whom are undocumented and therefore do not receive proper protections under the law. The multibillion-dollar industry has been embroiled in a series of scandals of late, including revelations of widespread slavery on Thai fishing boats.

In a statement about the factory dispute, released before an agreement was reached, Thailand’s Foreign Ministry insisted that it is committed to protecting migrant workers.

“The Royal Thai Government is determined to protect the rights of workers regardless of their nationality,” the statement said. “It has implemented a raft of policies aiming to regularize undocumented migrant workers and to combat human trafficking.”

Singapore’s Surbana Jurong to Build Underground Walkway

Surbana Jurong Private Limited, which is owned by the Singaporean government’s investment fund, is set to build Burma’s first underground pedestrian walkway.

According to a press release Feb. 26, the company has been hired by Burmese tycoon Aik Htun’s Shwe Taung Development to design and build the subterranean tunnel, close to one of his shopping malls in Rangoon.

“The underpass will connect the Practising High School, Yangon Institute of Education and Junction Square Shopping Centre, allowing pedestrians [to] bypass heavy traffic on Pyay Road, Yangon’s busiest thoroughfare,” the press release said.

“The underpass measures about 30 metres long and when completed will help improve traffic flow and pedestrian movement significantly.”

The same press release touted Surbana Jurong’s growing business in Burma. Projects include working with China’s CITIC Group to win the Kyaukphyu Special Economic Zone tender, an industrial park in Pegu Division and the planned Hanthawaddy International Airport, also in Pegu, it said.

“Since our branch opening in April 2014, Surbana Jurong has grown its presence rapidly in Myanmar. From two projects in April 2014 in Yangon, we are now actively involved in 40 projects across the states of Yangon, Bago, Mandalay, Rakhine as well as Ayerwaddy Division,” CEO Teo Eng Cheong was quoted saying.

Yoma Strategic Signs Volkswagen Import Deal

A subsidiary of Singapore-listed investment vehicle Yoma Strategic Holdings has signed an agreement with German automaker Volkswagen to import passenger cars and SUVs for sale in Burma.

Yoma German Motors limited signed the “importer agreement” on Feb. 29, extending an existing relationship under which the Burmese firm has been providing after-sales, servicing and spare-parts services for Volkswagen in Burma since October 2013, according to a statement on Yoma Strategic’s website.

“Under the Agreement, Yoma German Motors Limited will serve as the official importer and distributor of a range of passenger cars and SUVs manufactured by Volkswagen AG, within Myanmar.”

“This appointment will allow us to tap into Myanmar’s fast growing automobile market by offering an enticing and dynamic range of passenger cars and SUVs to local customers, further expanding our presence in the automotive industry in Myanmar,” Yoma Strategic CEO Melvyn Pun—son of Yoma founder Serge Pun—said in the press release.

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