The Irrawaddy Business Roundup (Sept 3)

By Kyaw Hsu Mon 3 September 2016

Survey: Sharp Downturn for Manufacturing

Burma’s manufacturing sector contracted in August at a steeper rate than in the previous seven months, according to a monthly survey of the sector.

New orders, output and stocks of purchases continued to fall in the manufacturing sector throughout the month along with staffing numbers, according to the inaugural Purchasing Manager’s Index (PMI) for the country, produced by IHS Markit.

Data collection for the index began in December 2015 but the first information for public release was announced on Sept. 1.

The index is compiled from information collected on new orders, output, employment, suppliers’ delivery times and stocks of purchases among manufacturers. The index decrease in August, down to 47.2 from the previous month’s 49.2, was the largest monthly drop since the survey began.

In line with falling inflows of new business, in August, firms in Burma’s goods-producing sector curtailed production for the fourth consecutive month, according to the report.

Many survey respondents attributed the latest drop to severe flooding in the country, IHS Markit reported.

Vietnam’s Increased Presence in Burma

The rising presence of Vietnamese companies in Burma may be a sign of increased Asean economic integration, or possibly also of an “affinity” between the two countries, a report in the Nikkei Asian Review suggested this week.

Included in the “remarkable” rise of Vietnamese investment in Burma is the recent arrival of the Bank for Investment and Development (BIDV) of Vietnam, which opened a branch at Rangoon’s Myanmar Plaza in July and aims to rank among the top five foreign banks in the country by boosting its local assets to $300 million, the report said.

The Myanmar Plaza commercial complex was built by Vietnamese real estate developer Hoang Anh Gia Lai. More Vietnamese companies are expected to take space in the complex and may come to comprise a large percentage of the tenants, according to a real estate industry source.

Other notable recent Vietnamese entrants to Burma include the Viettel Group, which plans to launch high-speed mobile services, and FPT, an information technology company.

According to the Nikkei Asian report, a senior official at a Japanese bank said that the two countries shared some common history, including having a large number of state-owned companies and having formerly antagonistic relationships with the United States.

Vietnam’s aggressive entry into the market has also been supported by the establishment in late 2015 of the Asean Economic Community, a framework for abolishing tariffs between members of the Asean bloc, the report said.

Jade Industry Faces Tougher Times

Lowered demand from China is hitting jade companies in Burma whose unsold stock is starting to pile up, according to a report in the Global New Light of Myanmar this week.

New anti-graft measures in China banning gifts of value-added jade is affecting sales of the gem, the report said, quoting Soe Naing, a member of the Myanmar Gems Club.

The jade market remains cool although the government halted extensions for many jade mine licenses in Kachin State this year, the report added.

Over the 2015-2016 fiscal year, raw jade worth US$305.779 million was exported to China via a 115-mile camp at the Muse border. Exports of raw jade from April to July in the 2016-2017 fiscal year amounted to $53.016 million, with a volume of 475.096 tonnes.

Burma Increases E-visa Access for Three Border Towns

Tourists and business people with electronic visas are now eligible to enter Burma through three towns on the border with Thailand.

The Ministry of Immigration and Population started to allow tourists from 100 countries holding electronic visas to enter Burma through three border towns on Sept. 1, the ministry announced on its website this week.

The e-visa system was introduced in 2014 and allowed tourists holding electronic visas to enter the country via airports in Rangoon, Mandalay and Naypyidaw. The business e-visa was introduced the following year for the same locations. The application process and policies for e-visas will remain the same, according to the announcement.

The three new locations open for e-visa holders are Myawaddy in Karen State, which sits opposite Thailand’s Mae Sot; Tachileik in Shan State, across from Mae Sai in Thailand; and Kawthaung in Tenasserim Division, which is close to Thailand’s Ranong.

New Investments Planned

Yoma Strategic Holding will invest $19 million to build a five-star hotel at the Pun Hlaing Golf Course, DealStreet Asia reports. The same site also reports that Maxxcare—a subsidiary of Mega Life Sciences which engages in manufacturing, distribution and marketing of medicines—is to invest $21.6 million to build a warehouse in the Mingaladon industrial zone in Rangoon.