Almost 600 firms have experienced delays getting their businesses off the ground since 1988 despite having received permits from the Myanmar Investment Commission (MIC).

Of the 2,723 local and foreign businesses permitted to operate in Myanmar between 1988 and 2017, a total of 581 have yet to start. As such, inspections will be conducted and assistance rendered to those affected by this month.

Late last month, Minister of Planning and Finance U Kyaw Win formed three teams tasked to investigate the situation. The teams will be led by MIC members U Htein Lwin, U Htay Chun and U Aye Lwin.

“There are many businesses that have experienced delays starting up in the country even though they have already received MIC permits. We will scrutinise and review these companies and provide assistance wherever needed,” U Htay Chun told The Myanmar Times.

He added that one reason for the delay is the failure to obtain additional licenses from the relevant ministries. “We will find out what the issues are and help to provide solutions.”

Typically, firms must apply for further licenses from the respective ministries and township municipals in Myanmar after receiving an MIC permit before being able to start operations.

While capital is not a major issue for foreign corporations, for local businesses, the lack of start up funds may well be a major hurdle resulting in delays getting off the ground. As local banks are not able to meet the capital requirements of these businesses, many may have been held back from starting out simply because they could afford to.

Out of the 2,723 companies that received MIC permits during the 29 years between 1988 and 2017, 1,410 were foreign businesses. Of the 581 that have yet to commence business, 288 are foreign.

Of the permitted foreign investments totaling $74.8 billion, during the period, more than 80 percent translated into actual activity.

Source: The Myanmar Times

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YANGON (Reuters) – Myanmar’s civilian president called in an Independence Day speech on Thursday for reform of a military-drafted constitution and for justice for all recognized minorities under a federal system, but made no mention of the treatment of its Rohingya Muslim people.

Amending the charter to remove a dominant political role for the military has been one of the most contentious issues facing Myanmar as it emerges from nearly half a century of strict army rule.

The debate over constitutional reform, however, has been muted since the assassination in January last year of a lawyer advising government leader Aung San Suu Kyi’s ruling party on the issue.

“As we build the Democratic Federal Republic, in accordance with the results of the political dialogues, we all need to work collectively for creating a suitable constitution,” President Htin Kyaw said in his speech marking the 70th anniversary of Myanmar’s independence from Britain.

Htin Kyaw’s post is largely ceremonial but he is a close ally of Suu Kyi. He did not elaborate on what he meant by suitable or spell out why he was suggesting the 2008 constitution drawn up by the military was unsuitable.

The constitution bars Suu Kyi from becoming president because it rules out candidates with a foreign spouse or child. Suu Kyi’s late husband was British as are her two sons.

It also reserves for the military one quarter of the seats in parliament and several major cabinet posts, including defense, interior and border affairs, giving it an effective veto over constitutional change and control of security affairs.

Myanmar began emerging from 49 years of military rule in 2011. Suu Kyi’s party swept a 2015 election and formed a government but concern is growing that the reform program is stalling or even sliding back.

This has been compounded by attacks on press freedom, including the detention of several journalists over the past year. On Dec. 12, the authorities arrested two Reuters reporters who had covered the army crackdown that has led to the mass flight of Rohingya residents of Rakhine State across the border into Bangladesh.

Htin Kyaw called for respect for human rights but he did not refer to the crisis over the exodus of 655,000 Rohingya people, nor to the international condemnation it has generated.

“We are working for the emergence of a democratic state based on the principles of freedom for all ethnic national races, justice, equality and right of self-determination,” he said.

“National race” is a term used by Myanmar referring to what it categorizes as indigenous ethnic groups. The Rohingya, who have traditionally lived in Rakhine, have been denied inclusion as authorities regard them as illegal immigrants who have crossed over from Bangladesh.

END TO CONFLICT

The Rohingya crisis erupted in late August after Rohingya insurgent attacks on security posts in Rakhine triggered a fierce military response that the United Nations denounced as ethnic cleansing.

Myanmar denies ethnic cleansing saying its security forces have mounted legitimate clearance operations.

Htin Kyaw called for an end to conflict with insurgents from various ethnic minorities who have been battling for autonomy for decades.

Clashes have flared in recent weeks between the army and guerrillas in Kachin and Shan states in the north.

Myanmar’s minorities have long demanded self-determination under a federal system. The army has traditionally seen itself as the only institution preventing the country’s disintegration and has favored a unitary state.

Amending the constitution would not be easy.

Changes require a 76 percent majority vote in a parliament dominated by military members and their allies.

The killing of lawyer and constitutional expert Ko Ni last year has not been fully explained even though the gunman was caught at the scene.

Many activists believe Ko Ni, who was Muslim, was targeted for his efforts to reduce the military’s political role.

Source: The Reuters

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Expectations for better demand and stronger profits among jade traders in Mandalay fell short in 2017. Weighed down by an oversupply of low-grade and a shortage of top-quality stones, sales have fallen for the sixth consecutive year and a rising number of traders are calling it quits.

“We suffered losses as the market was not good,” said U Aung Win Oo from the Maha Aung  Myay Gem Market Welfare Association.

A merchant himself, U Aung Win Oo had purchased three raw jade lots for K600,000 during the year. But due to poor demand, the stones were worth just K250,000 in the market after being cut and processed.

The way he tells it, “the trader who manages to fetch a profitable price for his jade merchandise in the current market is a very rare one.”

Among the reasons for the slump in price is poorer jade quality. “Although high quality jade is rare, there is plenty of low-grade jade in the market. We don’t get good prices for such stones,” U Aung Win Oo said.

Ko Maung Lwin, a bracelet maker based in Mandalay, agreed that good quality jade is becoming rare. As a result, he has resorted to buying lower-grade stones to make his jewellery. Still, profit margins have narrowed. “When I sell bracelets made from cheaper jade, I don’t earn as much compared to the higher quality products,” he said.

Jade glut

Low quality jade has been flooding the market because jade mining firms in Hpakant, Kachin State, are upping production before their licenses expire, said U Aung Win Oo. Meanwhile, supply is piling up in China, the largest buyer of Myanmar jade. As such, prices have dipped over the past few years.

“For the past 4-5 years, jade sales at Maha Aung Myay jade and jewellery market in Mandalay have declined and this year has been the worst,” said Ko Soe Nyunt Aung, a jade trader at Maha Aung Myay.

To put things into perspective, Ko Soe Nyunt Aunt said he purchased a raw jade block in Hpakant for K10 million this year. Back in Maha Aung Myay however, the same block fetched just K8.5 million

“With the oversupply of low-grade stones in the market, even if we did sell some products, we did not make much profit from them,” he added.

Ko Wai Phyo Thu, a jade trader at Maha Aung Myay market for the past decade, said he has been facing problems too. “It’s not that there are no sales taking place. It is just that a lot of the items I sold left no profits for me. This year can be said to be the worst year for business so far. It is now difficult for me to continue in this business,» he said.

Emporium sales

The government has made efforts to give the sluggish jade market a boost over the past few years. It continues to host the bi-annual Gems Emporium in Nay Pyi Taw, each year. The emporium allows merchants to sell high-quality jade pieces via auction to traders worldwide.

“When domestic traders buy jade and other gems at the emporium, many of these stones will end up resold at Maha Aung Myay,” said Ko Soe Nyunt Aung. “If that is the case this year, then the market may improve in 2018 and we hope for better prices then.”

Things are looking positive for now. At the recent mid-year Gems Emporium between December 12-21, jade traders managed to sell a total of 5,054 jade lots worth €438.58 million, according to data provided by the emporium committee.

That represented an improvement from the previous year’s emporium, which generated total revenues of €328 million from the sale of 4,085 jade and gem lots.

While one lot of six jade stones priced at €100,000 fetched €12.5 million at the auction , two jade lots priced at €5.8 million each were not sold.

A total of 4,432 gem merchants attended the emporium, of which 2,827 were Chinese merchants and 1,580 were local merchants.

Still, many traders remain concerned about the market in the coming year. “Jade traders are always hoping that if the market is not good this year, it will be good the next. After continuing to disappoint us for the past few years though, many of us aren’t holding our breath,” said Ko Soe Nyunt Aung.

Source: The Myanmar Times

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WHERE others see operational and regulatory risks in setting up businesses in Myanmar, Burmese tycoon Serge Pun sees opportunities – openings that he says wouldn’t fall into his lap in highly regulated and mature markets like Singapore and Hong Kong.

In an interview with The Business Times on Thursday, the chairman of the Serge Pun & Associates Group, a multinational real estate firm, said: “In a mature market, your opportunities are very limited… Everybody knows every single clause of the laws and regulations; in a country like Myanmar where the latitude (for interpretation of the law) is very wide – I think that’s where the attraction of any emerging or frontier market is.”

He is also executive chairman of Memories Group, which runs a series of tourism-related businesses and is a spin-off company from Yoma Strategic and two other companies.

Memories Group starts trading on the Catalist board on Friday; Mr Pun said it is the first Burmese tourism-focused company to list on a foreign exchange.

It has completed a placement exercise that raised S$10.65 million and had undertaken a reverse takeover with SHC Capital Asia, a shell company which used to run an insurance business in Singapore and then sold it in 2014.

Last month, the Catalist-listed SHC Capital had completed an acquisition of shares of MM Myanmar from three vendors – a Yoma Strategic subsidiary, Yoma’s affiliated company First Myanmar Investment (FMI), and another vendor, Exemplary Ventures.

Mr Pun said Memories decided against doing a public offering because of the lack of time; he did not want the counter to remain suspended after the acquisition for too long, and wanted to restore the public float as soon as possible.

Perhaps retail investors can get in the game after the listing, he joked, especially as the company has ambitious plans to expand the business.

For one thing, it aims to become an end-to-end provider of tourism services – from owning physical hotel assets and organising nature and cultural activities for visitors to providing tour-agency services on an innovative technological platform.

Among companies running tour-agency services, the common practice now is a “small, thin sort of fee-earning exercise”, where these agencies book flights and hotels for customers for commissions, he said.

What Mr Pun hopes to build is a more premier company, one with the infrastructure to serve in-bound and out-bound visitors quickly and efficiently.

He said: “Things that people don’t serve, we want to serve. Things that people serve in a conventional way and don’t take one more step, we will take that one more step. Hopefully, that will bring us market share.”

To do this, the group will need to hire talent and buy over certain target companies.

The listing of Memories Group is crucial in granting it exposure to capital markets and bank financing to execute its game plan and to grow exponentially.

The plan is taking shape, he said. “Since word got out that Memories Group was listing in Singapore, we have had a lot of hotel owners approaching us to offer to sell their hotels to us and become partners.

“To them, owning a piece of a publicly-listed company in Singapore is huge. Not only do they lift the branding of their hotels, they are also converting a hard asset into liquid security in a very safe place.”

He added that spinning off the tourism business also gives it its own limelight; the segment had been overshadowed by Yoma’s and FMI’s more prominent businesses for years.

Yoma has three core business segments: automotive, consumer and real estate. FMI’s three pillars are real estate (which often enters into joint ventures with Yoma), financial services and healthcare.

The tourism assets, such as the commercial hot-air balloon business in Bagan and hospitality development Bagan Land, were previously jointly held by Yoma and FMI.

“Although they are prized iconic assets, in the context of Yoma or FMI, they are very small, so they never received the deserved attention. Today, we put it under an independent platform and an independent management group, so it’s going to be the star, the flagship. Suddenly, it becomes a very different asset.”

To those thinking of making a foray into Myanmar for business, Mr Pun had this to say: “You have to be agile, assess your risks, take risks on a calculated basis and not recklessly, and you just have to work harder, but at the end of the day, none of it is negative.

“I see opportunity at least in one sense – that for those people who see it as a risk, they won’t come. At least I have a better time capturing the market. In that narrow sense, I’m already ahead.”

Source: The Business Times

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Myanmar will hold its first value-added gems and jewellery fair at the Lotte Hotel in Yangon between January 11 and 14, according to the Yangon Gems and Jewellery Entrepreneurs Association.

The fair aims to showcase processed stones and jewellery pieces made from Myanmar gemstones.

In fact, Myanmar-produced rubies, sapphires and jade are among the best in the world. Up and until now though, Myanmar’s gemstone traders and entrepreneurs had only sold raw or uncut gemstones to buyers from around the world.

But Myanmar is now upping its game as part of its strategy to raise its value proposition and become an international value-added gems market. From this year on, it will begin to showcase processed stones and jewellery made using modern techniques and based on international-standard designs, according to U Aung Myint, vice-chair of Gems and Jewellery Entrepreneurs Association in Yangon.

“The value-added gemstone fair this year will be Myanmar’s first step towards becoming an international-standard gems and jewellery market,” said U Thiha Thein, treasurer of the Gems and Jewellery Entrepreneurs Association.

Source: Myanmar Times

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YANGON — The international Gems and Jewelry Fair is returning to Yangon this year, nearly a decade after it was last held in the country’s commercial capital.

The fair will feature about 100 booths selling mainly rubies, jade and sapphire and run from Jan. 11 through Jan. 14 at the Lotte Hotel in Hlaing Township, said U Aung Myint, vice chairman of the Yangon branch of the Myanmar Gems and Jewelry Entrepreneurs Association.

“Though our rubies and sapphires are popular among international countries, we don’t have a market at home for international buyers. So we intend to establish a domestic market gradually through such exhibitions,” U Aung Myint said at a press conference on Tuesday.

Professionals will also give talks on the gem and jewelry market during the fair, according to organizers.

In the past, jade and gem emporiums for international buyers were mainly held in Yangon. But after the U Thein Sein government took power in 2010, the emporiums were moved to the national administrative capital of Naypyitaw.

“We intend to develop jewelry making in the country through such exhibitions,” said U Aung Myint, noting that the country mainly exports raw jade and gems rather than finished jewelry items.

The Myanmar Gems and Jewelry Entrepreneurs Association also intends to fight the smuggling of gems and jewelry with such fairs so that the government can earn more revenue from legal trade.

At a press conference for Myanmar Gems and Jewelry Day in Naypyitaw in August, U Myint Han, the Myanmar Gems and Jewelry Entrepreneurs Association’s vice chairman, claimed that there was rampant smuggling of jade and gems to China not because merchants did not want to pay tax but because the trade taxes were too high.

According to the association, more than 1,000 gem merchants and their peers from 36 countries have been invited to this month’s fair.

Source: The Irrawaddy

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1. Myanma timber enterprise will sell teak & hardwood round logs and sawn timbers by open tenders in us dollars. Particulars of the Open tender sales are as follows:

2. For further detailed information please contact myanma timber Enterprise head office and also visit myanma timber enterprise Web-site (www.myanmatimber. Com.mm).

Contacts; Office Ph; 01528771,
E-mail; Marketing 1 ppy@gmail.com
Open tender committee
Myanma timber enterprise

Source: Myanma Timber Enterprise

The post Myanma Timber Enterprise, Invitation for open tender, Closing Date: 29 January 2018. appeared first on Consult Myanmar.

Thanks to the enactment of the New Companies Law and the emergence of bylaws for condominium developments, the country may see an inflow of foreign direct investment (FDI) to reactivate the cooling property market, according to Aung Naing Oo, secretary of Myanmar Investment Commission.

“Take a look at the FDI situation, there may be both positive impacts and negative impacts in 2018. I think the positive impacts may outnumber the negative ones,” he said.

“The first point is the Investment Law enacted since April, 2017 has gained momentum. The second point is there may be significant changes when the Companies Act comes into effect in August, 2018. Especially, there may be foreign capital inflow. The third point is the bylaws for condominiums have emerged. These bylaws could make the cooling property market revive,” he continued.

As the EU has suspended a plan to sign the Investment Protection due to the Maungdaw violence in Rakhine State, a massive influx of investments from the western countries cannot be expected this year.

“The Maungdaw cases have tarnished the image of the country. We planned to sign the agreement in 2017 and made strenuous efforts to promote the massive inflow of investments from the EU into the country in 2018 and 2019. We had to prepare it for three years,” Aung Naing Oo said.

“To sum up, the country sees strong law and legal framework from the legal infrastructure point of view. The economy sector creates favourable conditions and a lot of opportunities for investors. The country will see an inflow of labour-intensive investments into every sector.”

Source: Eleven Myanmar

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(1) Ministry of Natural Resources and Environmental Conservation, No (1)Mining Enterprise Invites to submit the Cathode Copper( 3000) Tonnes Sale open tender quotation in the United State Dollars.

(a) Cathode Copper

(1) (1) Lot (100) Tonnes each, 5 Lot Monywa, Minesite
(2) (1) Lot (200) Tonnes each, 5 Lot Monywa, Minesite
(3) (1) Lot (300) Tonnes each, 5 Lot Monywa, Minesite

(b) Reserve price- The price of Cathode Copper is not less than the Copper price of London Metal Exhange on opening date. (Unknown price)

(2) (Tender Closing Date and Time is 15th February, 2018 (15:00) hrs.

(3) Tender documents are available from the Procurement Department, No.(1) Mining Enterprise, Ministry of Natural Resources and Environmental Conservation, Office Building No.(19), Nay Pyi Taw and Details Can be asked to +95-(0)67-409012 and 409383 within the office hours.

Tender Committee,
No. (1) Mining Enterprise

Source: Ministry of Resources and Environmental Conservation

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Myanma Railways Extends the Tender Closing Date as follows:

Managing Director, Myanmar Railways
Ministry of Transport and Communications, Nay Pyi Taw, Myanmar

Resource: Myanma Railways

The post Myanma Railways, Extension of Tender for Track Recording Car. Closing Date 22 March 2018 appeared first on Consult Myanmar.

Written by Ben Roache

The way people use the internet in Myanmar – and, in particular, the dominance of Facebook – has implications for businesses and advertising agencies.

IN MYANMAR, Facebook is the internet.

While Facebook usage is high in many countries, a very late-stage adoption of smartphones and the internet has created a technology culture unlike anything seen overseas. So how did this happen, what does it look like and what does it mean?

To understand this scenario, look to pre-democratic Myanmar. “Myanmar never experienced technology like the rest of the world,” said Yu Yu Din, a former general manager of Wave Digital, a digital agency under Mango Myanmar Group.

There were cyber cafes in major cities but many websites and services were blocked. Skype was restricted, as was Gmail and Facebook. While Google, Apple and Facebook were expanding into the behemoths they are today, Myanmar was almost completely disconnected. Most people just didn’t use the internet because it either wasn’t available or was too expensive. SIM cards were also prohibitively expensive – until 2010, they cost thousands of dollars.

All of this combined to build tremendous demand within the country for mobile phones and internet connectivity. “When you didn’t grow up with that stuff, you want it even more,” said Yu Yu Din, who has 13 years of digital marketing experience in India and Myanmar.

And then SIM prices dropped dramatically, to K1,500 and cheap Chinese smartphones were to put them in. Data speeds were decent and restrictions on internet access had been lifted. Unlike in Western countries, telecommunications and computing and the internet were all coming online at the same time, in the same device.

Many first-time phone owners bought devices they didn’t know how to use and help was provided by small phone shops, who set up the phones and installed apps through a file sharing service called Zapya. For users who didn’t know what they could do on their new phones, a Facebook account was created and some pages were liked.

We tried this ourselves, paying K5,000 to get a store-made Facebook account, which came with five pages pre-liked; mainly newspapers and the essential Myanmar Model Girls page. While waiting, we met a 67-year-old man from Yangon who owned two phones, 3 SIM cards and two Facebook accounts. His favourite app was Viber, which he used to send Buddhist quotes to his friends and family. He was a big spender: about K80,000 a month on top ups, mostly used to call family overseas. We asked him if he used Google; he’d never heard of it before.

You could say he represents the average Myanmar phone user, for whom Facebook meets many of their needs. “Myanmar people are a social people,” said Yu Yu Din.

Furthermore, technical issues with competing Unicode and Zawgyi text encoding standards have hampered the growth of Myanmar-language content, something that Facebook seems to have done the best to address so far.

Mr Shane Neubronner, general manager of Helium Communications, said that for a first-time phone user, Facebook offers “everything you could wish for. There’s search, news, information, things about people, celebrities. Your knowledge [of the service] grows, and you’re going to spend more time on Facebook.”

And that’s what has happened. Myanmar has a unique internet culture: Facebook now accounts for over 85 percent of all internet traffic, and most people don’t search or view web pages.

So where do advertising companies direct their ad spend? Unsurprisingly, email and email marketing never took off here. The phone number is more important: on Grab, email is optional. Digital marketing companies invest heavily in Facebook; it can be a large percentage of their clients’ total ad spend.

Mr Anthony Larmon of Echo Myanmar said this is unlikely to change. “It’s all Facebook. Myanmar people find something they like and they stick with it.”

Neubronner recalled launching a campaign encouraging users to upload an image to a small website. It was a failure: People didn’t want to click out of Facebook, loading was unreliable and customers were unfamiliar with web browsing. Data price sensitivity kept users on Facebook because mobile operators charge a lower rate.

YouTube seems to have been made redundant by Facebook’s own video service. What about Instagram? It skews more for the foreign-educated, the elites and younger digital natives. It remains a small market, in comparison to Facebook’s 14-18 million daily users.

So how should companies run their digital platforms? For business to consumer (B2C) companies, a comprehensive Facebook page is essential. Companies should expect and prepare for large amounts of leads, complaints and queries through the messaging platform. Because most people only use Facebook, there’s increased competition for ad space.

Thankfully, though, both search engine optimisation and search engine marketing are less important. For some, a consumer-facing website might not even be necessary. Neubronner recommends that brands with nutritional information, regulatory disclosure requirements or corporate governance information maintain this information on a website, but B2C content should remain on Facebook.

Myanmar is a great opportunity for fast-moving consumer goods, or FMCG. Currently, Facebook’s audience is 64 percent male, which suggests that many households still only have one phone. As more women – who are the main decision-makers in FMCG purchases – come online, there are great opportunities to target content to the right customer. Dutch Lady is doing very well in this space, even running a chatbot for 24/7 customer enquiries through Facebook Messenger.

The same methods could work well for NGOs. Facebook can be used as a platform for good to help reach the right people at the right time. NGOs should be using this opportunity to supply their target demographics with helpful information on things like pregnancy, diet advice, family planning or financial advice.

Our advice for B2B is surprisingly different. Professionals are the one demographic that uses email, and are comparatively large users of LinkedIn. Mr Justin Sway of JobNet.com.mm and Ko Wai Phyo Kyaw of CarsDB both said LinkedIn was important for finding potential candidates and business leads. As the professional class grows, there exists an opening for Google to enter through their business tools packages, as well as more traditional SEO and SEM. This is mainly due to these users having higher levels of foreign education and being comfortable searching on Google in English.

Online classifieds advertising is one of the few other areas where Facebook is not dominant. The more educated user base and the unsuitability of the Facebook app for listings have enabled classifieds companies like JobNet and CarsDB to develop successful mobile-focused sites. Of course, many listings are still posted to Facebook (and LinkedIn for JobNet), but the main activity happens on their own sites. Their recent success suggests that this particular user base is willing to try new things.

Source: Frontier Myanmar

This article was first published on Frontier Myanmar.Click here to read the original article.

About the author:

Ben Roache has a Bachelor of Laws/ Bachelor of Arts from the University of Adelaide this artcile was part of a research project on the the internet and telecom market that Ben was involved in while working at Consult-Myanmar, a Yangon-based consulting firm.

The post What Myanmar’s Facebook supremacy means for business appeared first on Consult Myanmar.

The Myingyan Combined-Cycle Gas Turbine Power Plant has begun distributing 143 megawatts (MW) to the National Grid, according to a report on January 4 in the Myawady Daily.

The Sembcorp Minygyan Power Company Limited has signed a build-operate-transfer (BOT) agreement with the Ministry of Electricity and Energy of Myanmar for its upcoming 225-megawatt power project in Mandalay. Under the agreement, Sembcorp Minygyan Power Company will build and operate the power plant for 22 years, after which the facility will be transferred to the Myanmar government.

The plant will be built with two high-efficiency gas turbines and waste heat generators, which will generate a capacity of 225 MW. In the first phase, the Myingyan Power Plant will distribute 143 MW to the National Grid. After the completion of the gas turbine project, the Sembcorp factory began operating the turbine last week.

Starting January 1, two gas turbines began generating power regularly, said Dr. Tun Naing, deputy minister for Electricity and Energy.

The Myingyan Combined-Cycle Gas Turbine Power Plant project was begun on March 29, 2016. The Sembcorp Myingyan Power Project become one of Myanmar’s largest gas-fired power plants, and will play a key role in meeting the country’s growing demand for electricity.

Source: The Mizzima

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Government will enter into join ventures with businesses to stimulate low-cost housing projects on public land, according to the Department of Human settlement and Housing Development.

In an effort to stimulate construction of needed low-cost housing, public-private developments will be allowed on government land, the department said.

Land will be provided by the government and the Construction and Housing Development Bank (CHDB) will offer long-term mortgages, while the construction association will oversee house building, said Min Htain, director-general of Department of Human settlement and Housing Development.

(CHDB) will offer an installment system for the low-cost and affordable housing apartments.

A pilot project is now underway to build 700 low-cost apartments in three major cities, with 50 per cent of the project scheduled for completion in 2018, according to the department.

The Yangon Region is to see 400 apartments, 200 in Nay Pyi Taw and 100 in Mandalay. The construction will be phased, Min Htain said.

Source: Eleven Myanmar

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Excel KC Myanmar Co has won a tender by the Yangon Regional Government to implement the Yangon Payment Services (YPS) cashless payment system on all Yangon Bus Service (YBS) buses this year.

The company was selected over two other companies which were shortlisted by the Yangon Regional Government to provide the service.

After conducting checks and meeting with a total of 14 companies which tendered for the project, the Tender Supervisory Committee shortlisted AnyPay Payment Services Co, Asia Stamar Transport Intelligent Co., and Excel KC Myanmar as the top three potential candidates for the job.

The winner was announced on Wednesday, two days later than scheduled. According to the announcement, the government may still cancel the contract with Excel KC Myanmar should any inconveniences or disagreements arise when discussing the terms. The contract will then be given to one of the other two shortlisted firms.

After switching to the Yangon Bus Service (YBS) from the old Ma Hta Tha transportation system last January, Yangon Chief Minister U Phyo Min Thein is now focused on implementing YPS, which involves the use of prepaid cards to pay for the fares on all buses.

Under the new YBS system, the government had replaced all bus conductors with cash boxes in all buses. However, commuters abused the system by placing paper instead of cash into the boxes, while others paid torn or damaged notes.

By implementing the new prepaid card system, the government hopes to solve these problems. According to U Phyo Min Thein, the prepaid card can also be used in trains, water taxis, restaurants and supermarkets by connecting with the banks. Cash will be deducted directly from the cards and commuters will be charged based on distance in miles.

‘’We hope to start the service by February, but can’t say when exactly. And we can’t say definitely that the card can be used by other modes of transportation and supermarkets,” said secretary U Maung Aung from Yangon Region Transport Authority (YRTA).

While the card payment system is not new in international countries, it is the first time Myanmar is attempting to go cashless.

Source: Myanmar Times

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Telecom service player MTG DC Co Ltd is planning to invest about US$24 million over the next year and a half in building the tower infrastructures in Myanmar.

Its top customer will be the new telecom operator, Viettel-backed Myanmar National Tele & Communications Ltd (MNTC), which is the company behind the brand – “Mytel”.

Besides, Myanmar Technology Gateway (MTG) will also be investing US$12 million in the first phase of the project, that involves the setting up of 250 towers by March 2018.

“We aim to start in Nay Pyi Taw and Shan State then continue with other regions,” explained the business development manager of MTG, Min Nyi Soe.

But apart from its telecom services, MTG is also currently partnered with Malaysia’s Numix Engineering to develop a satellite teleport in Nay Pyi Taw.

MTG previously received its Network Facilities Service (Individual) license in 2015 to provide satellite earth station facilities and internet services.

The company hopes to complete the installation work of their satellite infrastructure by next month in order to be able to sell the service of high speed VSAT broadband and GSM backhaul by March 2018.

MTG has previously handled telecom tower development work as a subcontractor and is now looking to set them up on its own, providing co-locations.

Outside tower construction and satellite teleport development, MTG is also building a 20 to 25-rack data center in Nay Pyi Taw. However, the data centre development is currently on hold due to its focus on telecom tower business.

Some of the major players in the tower construction in Myanmar include Malaysia’s OCK Group, which announced plans to invest $243 million in 2016, edotco and Apollo Towers.

Source: The Reuters

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Beans and pulses produced in Myanmar have long relied on the Indian market, but the industry has started broadening their horizons to another giant market – China, said U Aung Soe, director general from Myanmar’s Trade Promotion Organisation under the Ministry of Commerce.

A delegation, which consists of officials from the ministry and nine companies which are part of the Myanmar Pulses, Beans and Sesame Seeds Merchants Association, attended the Myanmar Beans and Pulses Market Promotion Forum on January 8 at the Myanmar trade representative office in Nanning, capital of China’s autonomous Guangxi region.

The forum attracted 90 Chinese companies. The event was the first kind of its kind.

“This is the first time we organise an event like this and it was a success. It also attracted Chinese traders. We can’t know how the demands will increase but it’s sure that they will buy more,” he told The Myanmar Times on January 11.

Since a few years ago, China started importing green gram from Myanmar and also bought a small amount of matpe since last year.

Indians and Muslims who have been residing in China are potential consumers, as well as Chinese people who live in the borders along Azerbaijan and Russia. Hence, China is a big potential market for beans and pulses, U Aung Soe said.

The trade representative centre in China will continue to organise similar events and will promote products from Myanmar.

The Indian government changed its policy last year and have disrupted Myanmar’s beans and pulses  market as a result. Therefore, Nay Pyi Taw is now seeking other prospective markets to diversify their reach.

Now the country has resumed its exports to India. The export volume has not changed but the price has fallen.

“Despite the lower prices, export volume has not fallen. This is because prices went up due to speculations. Now prices have returned to normal,” the director general said.

In the meantime, Myanmar has also exported green grams of special quality to the European market as well as to Japan and South Korea. Farmers don’t need to worry about the lack of markets. The challenge is to produce a decent variety of crops and the technical know-how, for example, using the right amount of insecticide.

Source: The Myanmar Times

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Industry players forecast tour packages from Asian markets to jump 25 percent in 2018 and 2019, while arrivals from European countries could dip by almost 20pc for the same period.

U Khin Zaw, advisor of the Union minister of Hotels and Tourism, told The Myanmar Times on January 3 that the change in arrival pattern was due to the Rakhine crisis.

The outbreak of violence in northen Rakhine State led to a major humanitarian crisis since August 25 last year and attracted bad press, which industry experts believe could have an impact on the tourism sector.

“We need not fear the decline in arrivals from western and European markets. If we change our tourism focus and do more tourism promotions, it will be a better situation,” he said, but added that the government needs take more initiates to attract tourists, especially from Asian countries.

“The Asian market is very close to our country, that is why the government should open up a market so they can come in easily. If this happens, the tourism sector will flourish and generate more revenue for the country,” U Khin Zaw said.

According to the Ministry of  Hotels and Tourism’s statistics, Myanmar received 3.1 million international visitors in the first 11 months of  2017, which was 20pc higher compared to the same period in 2016.

But tourists arriving from Germany, Spain, Italy, Belgium, the United Kingdom and the United States fell from 10pc to 20pc in 2017.  In contrast, travellers from Singapore, Vietnam, the Philippines, China, Japan and Thailand increased.

Destinations that depended on European markets such as Mrauk-U, Nagapli, Inle, Kalaw, Pintaya and Bagan would be further affected, but those which relied on Asian tourists, such as Yangon, Kyaiktiyo [Golden Rock Pagoda] and  Bago were less affected, according industry experts.

Revenue from tourism could also see a dip due to the varied length of stay of different tourists groups. For instance, Asians mostly spend five days in the country but western and European travellers stay over 10 days.

The overall tourist arrival number would have increased in 2017, compared to last year but the tourism revenue could be down because travelers from Asia stay at a shorter time.

According to U Kyaw Min Oo, managing director of Equalink Travel and Tours, tour companies lost almost 75pc of their businesses compared to 2016 due to rising competition — not solely from the Rakhine crisis.

From October to November, the company received five tour package cancellations from  European travelers who were entering via the Indian border, he said.

“We have to do a lot to recover from this situation. Especially release the right news to the world and tell peopl that the real situation is different here. It will take time to stabilise,” U Kyaw Min Oo said.

The company plans to woo more  backpackers and caravan tours through border crossing, if the government will open more border gates.

He also urged the government to promote Myanmar tourism in neighbouring countries such as Thailand, Laos and Cambodia.

Source: The Myanmar Times

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Open tenders are invited for supply of the following respective items in Myanmar Kyats.

Tender Closing Date & Time- 13-2-2018, 16:30 pm

Tender Document shall be available during office hours commencing from 12 January 2018 at the Finance Department, Myanma Oil and Gas Enterprise, No (44) Complex, Nay Pyi Taw, Myanmar.

Myanma Oil and Gas Enterprise
Ph.+95 67 – 411206

Source: Ministry of Electricity and Energy

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The Ministry of Construction and International Finance Corporation (IFC) on January 11 signed an advisory services agreement to build an elevated expressway connecting Yangon port, Thilawa SEZ, Yangon International Airport, Yangon Industrial Zone and Yangon-Mandalay expressway.

The 20.5-kilometre elevated expressway will cost US$400 million (535.86 billion kyat), with maintenance costs to be paid for by collecting taxes. According to the agreement, the IFC will be entitled be the leading advisory corporation for the project.

The IFC said it would implement a tender selection process to choose an experienced and high-profile construction company with good management, diversified operations and high-quality maintenance capability.

IFC said the project will help to develop the economy.

“The big investment in basic infrastructure, especially in the transportation sector, is very important to develop the economy in the long term. That’s because it can promote a link between the economy and services in the social sector,” said Kyi Zaw Myint, deputy director general (planning) at the ministry.

If the project is successfully implemented, it will set a standard for Yangon’s inbound and outbound road projects.

The government expects that investment in the transportation sector will require expenditures of $48 billion by 2030. A public-private partnership (PPP) with the private sector taking on most development costs, will reduce the burden for the government.

The 2-3-year project is slated to start early next year.

“The IFC will create an international market standard to attract high-profile investors to implement the project,” said Vikram Kumar, residential representative of IFC (Myanmar). “It will create a good precedent to attract projects under public-private partnerships (PPP) across the country as it is an elevated expressway project developed under the PPP. It will also promote competition and production in addition to boosting connection between people and business enterprises and commercial business,” said Kumar.

Source: Eleven Myanmar

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A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.

In Myanmar, banks require collateral in the form of property before they are able to extend loans to start-ups and SMEs which do not have a proven financial track record. While these measures are prudent for the banks, many promising businesses are not able to obtain the financing they need to grow, which, in turn, holds back further economic development.

“Under the current economy, secured loans are necessary for financial prudence. But when a businessman wants to invest in his business and needs capital, he faces difficulties if he does not own properties he can use as collateral. For further economic development, we need to also allow unsecured loans,” said Dr Aung Thura, CEO of Thura Swiss, which provides consultancy services to the Yangon Stock Exchange.

Lack of capital

Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.

But qualifying for loans is notoriously difficult in Myanmar. To qualify for an SME loan, businesses must obtain recommendations from the SME Development Department and Republic of Union of Myanmar Chamber of Commerce and Industries (UMFCCI). The borrower must be a UMFCCI member and be up and running for at least two years to be eligible for a recommendation.

Together with its financial statements and business plan, the borrower can then apply for a JICA SME loan through local banks like Apex Bank, AYA Bank, Cooperative Bank, Myanmar Citizens Bank and the Small & Medium Industrial Development Bank.

P2P lending

While this has helped to alleviate the capital constraints for some businesses, many others still struggle to attain the necessary capital, particularly entrepreneurs who are just starting out.

To get around the financial constraints, borrowing from family members and peers is common. Take Ma Khin Yadana, a dress shop owner in Yangon. After losing her savings when a business decision went wrong, she sought help from other entrepreneurs on Facebook who were willing to invest in her start-up by extending credit via a peer-to-peer (P2P) lending system. In return, the funds would be paid back at a hefty interest rate.

“I don’t want to go on like this. But if I go to a bank for a loan, none of them will lend to me. Banks only want to give loans to people with collateral. It is impossible for people like us. I have started my business like this and have to repay debts at 10pc interest rate monthly. That’s 120pc yearly,” said Ma Khin Yadana.

In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.

Why banks don’t lend

To ease financing restrictions and encourage more growth, the Central Bank of Myanmar (CBM) said November that a maximum of three years would be given to banks to recover the overdraft loans that make up the bulk of their lending. The original deadline was January 2018, six months after the regulations were introduced in July.

The CBM will now allow banks to keep debt in the form of overdrafts – most of which were made on open-ended, preferential terms with customers – at 50pc of their loan books by July 2018 and 20pc by 2020. In December, the CBM went on to allow foreign banks to extend financial assistance to local exporters.

Notably, loans unsecured by collateral were also permitted, subject to approval by the lender and depending on the cash flow and industry of the borrower, a vice governor of the CBM and deputy minister from the Ministry of Planning and Finance told The Myanmar Times.

But local banks also face constraints when lending to the public. For one, the banks can only offer loans commensurate with deposits. “Commercial banks are responsible for preserving the savings of the public. Each time we lend, we are taking a risk,” said U Pe Myint, senior adviser to CB Bank.

Indeed, Myanmar’s overdraft loans are estimated to amount to $9 billion currently, representing about 70pc of local banks’ total lending, according to Reuters.

“Banks do offer loans without collateral but these are typically extended to large companies with low risk of default. But banks are not at liberty to lend to everyone due to the high risk of default,” he added. Just last week, Ayeyarwaddy Bank issued letters to credit card holders with outstanding payments, urging them to repay their debts.

“This is Myanmar’s big problem. People do not pay back what they owe. While it is true that businesses need loans without the burden of collateral, but banks also have a lot at stake when deciding who to lend to,” U Pe Myint said.

Banks, businesses must buck up

For unsecured loans to work in Myanmar, lenders and borrowers must buck up. “To offer unsecured loans, the banks should restructure their risk management procedures, making them more robust. They should hire qualified analysts who can read the financial statements of potential borrowers and who understand the nature of their businesses so that forecasts can be made to gauge the possibility of future profits or losses,” said Dr Aung Thura.

“In the past, the central bank completely disallowed disbursements of unsecured loans. But now, they are making exceptions. They recognise the small-scale industries cannot give collateral. So, we need to get better at analysing the prospects of the various businesses and industries,” said U Mya Than, a banking expert.

U San Thein, another banking expert, agreed.”We’ll have to improve our credit analysis department and provide proper training to our staff,” he said

Businesses should do their part, too. For example, companies need to be able to prepare and display their financial statements and be able to provide answers to questions regarding the statements raised by the banks.

“The banks will be extra cautious when evaluating the authenticity of the financial statements. If any figures appear dubious, they will not be inclined to extend the loan. We’ve encountered many businesses that desire capital but which do not have data that is up to standard,” said Dr Aung Thura.

“The majority of companies in Myanmar do not want to prepare statements as they’re worried about costs being high. But if a company wants to search for outside investors or just receive a loan from banks, the best way for it is to do so is to have the required statements and data.”

While the CBM allowing banks a freer hand in managing and disbursing capital is a major development, it will take time for the industry to adjust and implement the necessary changes needed to provide greater capital access. For now at least, unsecured loans approved by the banks are still out of reach for many.

Source: The Myanmar Times

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