NAYPYITAW — The Lower House Investment and Industrial Development Committee will consider the termination or privatization of 24 loss-making state-owned factories—including the Myingyan Steel Factory which has received significant state investment.
Committee member U Aung Kyaw Kyaw Oo said: “A total of 24 factories are making a loss, most were suspended when parliament discussed the Union budget [in early 2017]. Now, we are gathering data and inspecting those factories on the ground.”
“We will report findings [to Parliament] and decide if those factories should continue operation or not.”
The committee formed two teams comprised of officials from the Planning and Finance Ministry and the Ministry of Industry and representatives of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) to assess the profit and loss of those factories, said U Aung Kyaw Kyaw Oo, who is also Yangon’s Hlaing Township lawmaker representing the National League for Democracy (NLD).
“We have invited expression of interests from businesspeople to operate those factories. We’ll discuss with interested parties and privatize some, turn some into joint ventures, and terminate some as necessary,” he added.
Steel plants in Myingyan Township, Mandalay Region and Pangpet in Taunggyi Township, Shan State; paper mills in Thabaung Township, Irrawaddy Region, and a heavy industry in Thagara, Bago Region are among the biggest to be inspected, said Myingyan Township lawmaker U Paw Khaing, who is also the secretary of the committee.
“Myingyan steel plant is a large-scale investment, so it is a waste to close it down. We will examine its pros and cos. If it is not viable, we have to shut down. We have to look for long-term benefits,” he said.
Permanent secretary of the Ministry of Industry U Ko Ko Lwin told The Irrawaddy in a press conference in August 2016 the National League for Democracy-led government has privatized three loss-making factories—glass factories in Kyaukse, Mandalay Region and Pathein, Bago Region and a fire-resistant bricks factory in Pathein and closed down a chemical industry which was transferred from military-owned Myanma Economic Holdings Ltd to the industry ministry.
Privatization and closure of state-owned factories needs the approval of the government’s economic committee led by State Counselor Daw Aung San Suu Kyi, he said.
The Ministry of Industry operates 103 factories which operate on their own, are leased to private businesspeople, or operate as a joint-venture or profit-sharing.
The ministry plans to keep Myanmar Pharmaceuticals as a state-owned factory.
According to the committee, expressions of interest (EOI) have been invited for No. 14 Heavy Industry (Thagara) three times, but no one has shown interest. Likewise, no company has submitted an EOI for No. 26 Heavy Industry (Thagara).
EOIs have been received for two heavy industries in Thagara and Sinte (in Mandalay Region) as well as for No. 1 Steel Plant (Myingyan) and No. 2 Steel Plant (Pangpet), No. 23 Heavy Industry (Nyaungkyayhtauk), near Thagara, and Plastic Factory (Kyaukse).
Eight textile factories in Sagaing Region, Pakokku in Magwe Region, Myingyan, Shwetaung, Myittha, Pyawbwe and Yamaethin in Mandalay Region manufactured school uniforms, surgeon’s gowns, linen, bandages and cotton wool.
No. 6 Textile Factory in Monywa needs major repair, and EOI will be invited for No. 10 Textile Factory (Taung Tha) in Mandalay Region.
EOI will be also invited for two pulp factories in Irrawaddy Region’s Thabung Township. The ministry is considering leasing rubber products factory in Yangon’s Tingangyun Township to Stellar Power House Co. Ltd., as well as No. 32 Heavy Industry (Kyangin) in Irrawaddy Region to Asia Square Co. Ltd. and a glass factory in Pathein to Excellent Fortune Development Group.