Myanmar Land of Opportunities and Challenges 2016
What are the associations? U.S.A U.K. Aung San Suu Kyi China Myanmar 2
Where is Myanmar?
Myanmar’s Vital Statistics Population 53.96 mln - Male - 49.43% - Female - 50.57% Area 676,577 sq. km GDP Usd 46.947 bln (2012-13) GDP annual growth rate 7.6% (as of March 2013) Number of household 11.1 mln (2013) Working population 31 mln (2013) (age 15 & above) Youth population 20 mln (2013) (age 15-24) Tourist arrivals Over 2 mln (2014) Local system Common law SME size 126,237 (99.4%) Source: The World Bank/Myanmar Government
5 Myanmar’s Exports & Imports In US Dollar in Million In US$ Million No TOP 10 Exports Value No TOP 10 IMPORTS Value Natural Gas 2,522.5 1 1 Petroleum Products 1,463.0 Jade 2,204.9 2 2 Machinery & Spare Parts 873.7 Matpe ( Black Gram Bean ) 458.6 3 430.4 3 Iron & Steel Construction materials Garment 381.1 4 4 Plastic Raw Materials 202.1 5 Fish 306.0 5 Palm Oil 198.8 Rubber 302.0 6 6 Vehicles & Spare Parts 197.1 7 Teak Log 292.3 7 Pharmaceuticals 188.3 Green Mung Bean 291.3 8 Ships, Boats 8 180.4 9 Cement 9 Hardwood Log 282.0 167.8 10 Rice 10 Fertilizers 162.6 194.4 5
Myanmar’s Foreign Investments FDI in Myanmar by Sector, as of 31/10/2014 Permitted Enterprises Sector Particulars Approved Amount Number % (in Usd mln) 1 Power 8 19,324.54 38.48 2 Oil and gas 132 15,177.32 30.22 3 Manufacturing 416 4,640.91 9.24 4 Mining 69 2,863.18 5.7 5 Transport & communication 27 2,858.04 5.69 6 Hotel & tourism 57 2,154.59 4.29 7 Real estate 28 2,120.15 4.22 8 Livestock & fisheries 32 441.318 0.88 9 Agriculture 16 240.645 0.48 10 Industrial estate 3 193.113 0.38 11 Other services 22 169.697 0.34 12 Construction 2 37.767 0.08 812 50,221.27 100 Source: HKMCC
Myanmar’s Priorities - in regard to itself • Rural development and poverty reduction • Agriculture development and industrialization • Energy sector development • Telecommunication development • Micro-finance for rural people and SMEs • Education and health sector development • Human resource development • Infrastructure development
China’s Priorities - in regard to Myanmar • Building the Bangladesh-China-India-Myanmar land bridge • Counting Myanmar in building smooth, secure and efficient ocean routes to connect the major sea ports along the ROAD • Including Myanmar in strengthening infrastructural connection, trade, investment, resource exploration, finance, ecology, culture, maritime development • Maintaining the Ruili (Yunnan) – Kyaukpyu (Myanmar) oil and gas pipeline, 2013 8
MCL’s Priorities - in regard to Myanmar 9
Opportunities
Myanmar’s Market Development - relative to other Asean countries Malaysia • Thailand High value merchanise • Indonesia Daily necessities Philippines Vietnam • Laos Low value merchandise Cambodia Myanmar 11
Myanmar’s Minimum Wage Level - relative to other Asean countries • Myanmar : Usd100 • Cambodia : Usd140 • Vietnam : Usd156 12
Myanmar’s Import Sourcing - general merchandise Yiwu in Zhejiang Guangzhou in Guangdong
Myanmar’s Other Opportunities 14
Other Import Logistics Opportunities Myanmar Plaza Myanmar Parkson City Mart Holding 15
Yangon - Thilawa - MTT MITT MITT is about 25km from city area 16
Yangon Thilawa － MITT SEZ - 2,400 hectares MITT 17
Foreign Investment Law 1 A citizen or 100% concerned foreign Government 2 owned organisation Joint venture 3 Any “system” Included in the Mutually Agreed Contract 18
Starting Up Business - MMCL • Documents requirements Business Permit Company Registration • Capital requirement Min. USD50,000 19
MMCL Team in Yangon 20
Myanmar’s Transport and Logistics Finance Supply Chain Logistics Physical Management Concepts Distribution Product Development Customer Development Supply Chain Integration www.vietnamsupplychain 1960s 1970s 1980s
Logistics Plus • Logistics services FCL LCL Land, Air, Ocean Freight Break Bulk Out of Gauge 22
Logistics Plus • CFS / Warehouse 23
Logistics Plus • Value added services (import to Myanmar) LCL Consolidation Cargo Inspection Supply Sourcing PO Management FCL Customs Clearance Inspection/Quarantee Landside Delivery
MMCL’s Overseas Network Italy Japan & Korea China & Hong Kong ASEAN Australia & New Zealand
Challenges
Congested Roads & Terminals Yangon Down Town Yangon Inner Port 27
Yangon Inner Harbour – Terminals & ICDs International wharves HTD (Hteedan) o Yangon Port – 17 wharves o Thilawa Port – 6 wharves AWPT Total – 23 wharves ICD – 3 Depots MIP SPW NANTHIDA BSW ICD 1 & 2 Monkey Point 28
Competition - general merchandise logistics Competition from existing agents in China
Competition - FMCG logistics Resources? 30
Myanmar’s Business Transaction - still cash based 31
Myanmese People and Culture
Government Effectiveness 33
Putting into perspective
SWOT Analysis - Myanmar Strengths Weakness 1. Strategic geo-political & commercial 1. Complex bureaucratic regulations & legal location issues 2. Opening up for business & investment 2. Rudimentary financial market 3. Pragmatic leadership 3. Inadequate infrastructures 4. Peaceful foreign policy 4. Limited industrial diversification 5. Large and young population 5. Lack of international exposure 6. Rich in natural resources 6. Insufficiency of skilled labour Threat Opportunities 1. Risks associated with reforms – economic, 1. On the Maritime Road social, and political 2. Last frontier in ASEAN 2. Negative impact on environment resulting 3. Connectivity with end-markets from massive industrialization 4. Strategic interest to China & USA 3. Inflationary pressure resulting from rapid 5. Investment in infrastructure, tourism, economic expansion trade & commerce, education & 4. Conflict with ethnic minorities ecology (the “green” vision) 5. External political forces impacting internal political, social and economic stability 35
On balance… Put a Marker on this Land of Opportunities 36
Communication Shunde Shenzhen 37 Yangon
To follow up…
Myanmar Star 39 www.mclhkg.com.hk
40 A New Chapter in Myanmar 40
One Belt One Road G G (Government) (Government) P P (People) (People) B B 2 (Business) (Business)
Questions & Comments 42
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