PwC Myanmar Weekly Business Intelligence Issue September 2018

Transcription

1 PwC Myanmar Weekly Business Intelligence Issue September 2018

2 Disclaimer PricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they re looking for. We re a member of the PwC network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Tell us what matters to you and find out more by visiting us at This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved. PwC refers to the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. The application and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PricewaterhouseCoopers Myanmar Co., Ltd client service team or your other tax advisers. PwC September

3 1. Weekly Key Financial & Business News PwC September

4 Weekly Key Financial & Business News Headlines Govt housing project in the red before development commences Ride-hailing firm Get Ride officially launches in Myanmar after securing financing Électricité de France director: 'Our goal is to get the most competitive financing possible' New city project by Chinese firm raises hackles in Kayin Trade with Indonesia to reach $1b in 2018 PwC September

5 Weekly Key Financial & Business News Headlines TVP invests in FMR to tap into Japanese clientele Huawei urges Myanmar to back shared broadband construction Ygn government will start Elevated Expressway project in 2019 More than 10,000 apartments of public and staff housings to build in Mdy Belt and Road project tenders open to non-chinese: commerce minister PwC September

6 Myanmar Times Govt housing project in the red before development commences 17 Sep 2018 While the Yangon Region government has injected K54billion into the development of the Mahar Yangon new city project, construction has yet to commence, according to a report prepared by the Yangon Region Office of the Auditor General. Meanwhile, the project has already chalked up K11.6 million in costs. When it is complete, Mahar Yangon is expected to consist of several housing projects, including the Mayangone Villa housing project, Parami housing project, civil servant housing and a mixed-use project. It will also include a dry port industrial zone. Staff housing will be constructed to support the industrial projects. It is the first company established by the government to oversee housing construction. However, it co-invested with Myanmar Construction Development Public Company as it has no experience in construction, said U Shein Win, director of the Metropolitan Development Public Co. So far, land measurements have already been carried out for the civil servant housing in Dagon Seikkan township as well as for Mayangone Villa and the dry port industrial zone. The regional government will fund the Mayangone Villa project, which is being developed over 11.9 acres of land and will include six buildings when complete. The project was transferred to Yangon by the Urban and Housing Development Department. The Yangon Metropolitan Development Public Co was formed by the Yangon government to develop and oversee the project. The Yangon government has taken a 51 percent stake in the company, while Myanmar Construction and Development Public Company (MCD), a private firm, mopped up the remaining 49pc. Auditor General Daw Khin Tha Hla warned though, that funds may be lost or wasted should unforeseen complications take place as a result of the transfer. As such, plans and a clear line of management should be drawn out to ensure the project is successful. Source: Myanmar Times PwC September

7 Deal Street Asia Ride-hailing firm Get Ride officially launches in Myanmar after securing financing 17 Sep 2018 Get Ride, a homegrown ride-hailing platform majority owned by the founder of Myanmar s BOD Tech Ventures, officially launched its operations in Mandalay, the country s secondmost populous city, last week. The bike, tuk-tuk and taxi-hailing platform is part of Get, an omnichannel digital commerce platform established in 2017 by early-stage tech investor Mike Than Tun Win and fintech veteran Nyein Chan Soe Win. Get has already secured capital commitments of nearly eight-digit US dollars, said BOD Tech Ventures founder and CEO Mike Than Tun Win in an interaction with DEALSTREETASIA at its Asia PE-VC Summit Get seeks to emulate Go-Jek, the Indonesian unicorn that started as a motorcyclehailing platform and has since diversified into fintech and a host of horizontal services. The Myanmar startup plans to bring together service providers that have been backed by BOD Tech Ventures on a single platform. These include online travel agency FlyMya, Get Digital Store, food delivery company Yangon Door2Door, mobile learning app DedaaBox and others. The startup has announced that starting 2019, it will charge a fee lower than its competitors based on a rate agreed upon by its community of drivers and customers. It also plans to provide lifetime commission-free services to motorbike drivers. Being a local company with a team of leadership experienced in entrepreneurship, technology and fintech, Get Ride fundamentally understands Myanmar and truly cares about building a ridehailing platform that puts safety, reliability, convenience, and long-term sustainability for the whole at its heart, said Get CEO Nyein Chan Soe Win. The official launch of Get Ride comes about six months after a beta launch that started in January this year. It is now beta testing in two other major cities, Yangon and Monywa, with plans to expand to one new city every month. Its goal is to cover all second-tier cities of Myanmar by the end of Source: Deal Street Asia r-get-ride-launch / PwC September

8 Frontier Myanmar Électricité de France director: 'Our goal is to get the most competitive financing possible' 17 Sep 2018 In December 2015, state-owned utility company Électricité de France signed a memorandum of understanding with the government for the 1,050- megawatt Shweli-3 hydropower project in northern Shan State. After several years of policy uncertainty, the government is keen to move ahead with hydropower projects and at a power sector working group meeting on August 8, Minister for Electricity and Energy U Win Khaing said it would soon issue notices to proceed to several developers, including EDF. Mr Yacine Chouabia, the company s business development director for tells Frontier s Thomas Kean about EDF s plans for Shweli-3, which could see the size of the project scaled back. How significant is Shweli-3 for EDF? As a global utility company and a leader in lowcarbon electricity solutions, we are able to support Myanmar in a variety of energy projects. Shweli-3 is definitely one of them. We are currently looking forward to the government s decision regarding the choice of project developer. This decision, referred to as a notice to proceed, is an important step since it will enable the appointed company to move forward and engage works on the project s financing scheme. How did EDF identify Shweli-3 as a project it wanted to pursue? When the country opened to investors after 2011, we started looking for development opportunities in the region. The project was originally developed by the Ministry of Electric Power's Department of Hydropower Implementation and we offered our support. We carried out preliminary studies to assess the project s compliance with our standards. With our experience in hydro energy, we are confident about our capacity to bring a real added-value in terms of optimizing the project s key parameters the size and installed capacity and making it cost-efficient, while reducing as far as possible the environmental and social impacts. Source: Frontier Myanmar PwC September

9 Myanmar Times New city project by Chinese firm raises hackles in Kayin 18 Sep 2018 The Kayin State Border Guard Force and Jilin Yatai Group of China launched the Shwe Kokko new city project in Myawady township in the first week of August over the objections of local residents. The residents are worried that the project s gambling houses and entertainment establishments could have a corrupting influence on young people, and that its airport, hotels and shopping centres could harm local businesses. Jilin Yatai Group was registered with the Ministry of Planning and Finance under the name Myanmar Yatai International Trading Co Ltd in February In mid-april, ground clearing and fencing work began, said Saw Aung Myo, who lives in Shwe Kokko Myaing, Myawady. We don t know if it was approved by the government or the border guard. Since it is in the area controlled by the border guard, they were able to start just by informing the border guard, but they should have also informed local residents. Now, we can t even go near it, Saw Aung Myo said. The project, which covers over 2000 acres along the Thaungyin River and will cost an estimated US$15 billion (K23.35 trillion), applied for permission to build from the Myanmar Investment Commission in April 2017 and the state government, according to Colonel Saw Chit Thu of the border guard. Colonel Saw Chit Thu and Myanmar Yatai International Trading Company signed a partnership agreement in September 2017, organised by the China Federation of Overseas Chinese Entrepreneurs, before the plan received permission from the commission. The commission announced that it granted permission for part of the initial phase of the project on July 26 this year, specifically 25.5 acres with a $22.5 million investment. According to figures released by the commission, the border guard contributed 20 percent of total investment. Source: Myanmar Times PwC September

10 Myanmar Times Trade with Indonesia to reach $1b in Sep 2018 Trade between Indonesia and Myanmar has steadily increased and is expected to reach US$1 billion at the end of this year. Figures show the continued development of both countries. I am confident that the total trade volume will reach $1 billion at the end of 2018 and this will be a new chapter for continuing improvement of both countries and bilateral economy relation, said Indonesia s ambassador Iza Fadri. The total trade volume between two nations reached $973 million in 2017, and has jumped by 31pc in The Indonesia and Myanmar business-matching event was held at Yangon Lotte hotel, organised by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) together with the Indonesian embassy. U Aung Soe, director-general of the commerce ministry s Myanmar Trade Promotion Organisation, said that the bilateral trade volume is expected to increase and will benefit both sides. Trade volume between Myanmar and Indonesia has increased annually and the total trade volume reached $741 million in fiscal year, $827 million in , $1,025 million for Indonesia ranks 14th in the list of foreign investor (by country) in Myanmar. State-owned enterprises and private businesses from Indonesia have made investments in the country, and sectors such as infrastructure, mining, construction, pharmaceutical, telecommunication and banking are of particular interest. I would like to encourage Indonesia investors to come and invest in Myanmar in order to boost investment promotion between the two countries, U Aung Soe said. Source: Myanmar Times PwC September

11 Myanmar Times TVP invests in FMR to tap into Japanese clientele 20 Sep 2018 Local financial advisory Trust Venture Partners (TVP) will make a minority investment into business information firm Frontier Myanmar Research (FMR). TVP will exclusively distribute FMR s subscription services on energy, financial services, real estate and transport infrastructure to Japanese clients, for whom TVP acts as a market entry point into Myanmar. The two companies will also combine FMR s research insights and TVP s advisory services to support foreign and local investors in Myanmar, as well as local companies looking to raise funds. By integrating expertise and resources, the partners will offer a single solution for market research, financial advisory, fund raising and due diligence. The partners also hope to leverage TVP s expertise in financial advisory and FMR s coverage through its Myanmar Financial Services Monitor and tap into the growing market demand. TVP chief executive officer Shinsuke Goto said Once Myanmar s financial market gains more momentum, the demand for related financial services such as corporate analysis reports will increase. Investors will require much more sophisticated information than is currently provided. Small and medium sized firms will not have the capacity to undertake this in-house, he added. Alex Warren, CEO of Frontier MEA, FMR s UKbased parent company, expected the partnership to increase the reach and range of its business research services. Source: Myanmar Times PwC September

12 Eleven Myanmar Huawei urges Myanmar to back shared broadband construction 20 Sep 2018 GIVEN THAT construction of a broadband infrastructure costs a fortune, Myanmar should encourage telecom operators and Internet service providers (ISPs) to make collective efforts for broadband investment, said Bill Lan, chief national broadband network strategist at Huawei Technologies Co. Lan said at the two-day Myanmar Connect 2018 that infrastructure sharing would enable telecom operators to drive in the fast lane on the deployment of broadband infrastructure. Construction cost is a major issue that makes broadband infrastructure investment less attractive for telcos, he said. It is estimated that 70 per cent of broadband investment will be spent on right-of-way (ROW) expenditure, site acquisition and civil engineering. According to the executive, Thailand sets a good example, thanks to the aerial fibre being deployed on electricity poles, which has saved 80 per cent of construction costs and 40 per cent of deployment time over the past few years. In most developing countries, public and private ROW acquisition is an annoying issue for operators who want to deploy or upgrade their broadband infrastructures, he said. The process involves multiple management authorities, complicated administrative procedure and diverse acquisition fees including an administration fee, usage fee, environmental restoration fee which not only slow down the approval time but also make ROW acquisition more costly, he added. Today, the development of broadband infrastructure is facing a variety of challenges, especially in terms of ROW acquisition, high construction cost and the difficulty of home connection, he said. At the event, Lan stressed the importance of broadband connection, as ICT reshapes the society and accelerates socio-economic transformation. Source: Eleven Myanmar PwC September

13 Eleven Myanmar Ygn government will start Elevated Expressway project in Sep 2018 YANGON- With the aim to reduce the traffic jams and to create more job opportunities, Yangon Government Committee discussed about implementation of Elevated Expressway Project with International Finance Corporation (IFC). The project is expected to start next year, according to Union Minister of State Counsellor s Office Kyaw Tint Swe. Yangon Elevated Expressway is expected to provide easy access to Yangon downtown, Yangon International Airport, Yangon Port, Thilawa Special Economic Zone, Mindalardon Industrial Zone and Yangon-Mandalay highways. In order for the goals to be met, the Ministry of Construction has prepared a Request For Qualification (RFQ) and Preliminary Information Memorandum (PIM). As implementation of the elevated expressway project, we can solve the issue of traffic jams and also will be creating many employment opportunities at the same time, said Kyaw Tint Swe. The Ministry of Construction and IFC on January 11th signed an advisory services agreement to build an elevated expressway connecting Yangon Port, Thilawa Special Economic Zone, Yangon International Airport, Yangon Industrial Zone and Yangon-Mandalay expressway. The 27 kilometer long elevated expressway will cost US$400 million 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 construction of 4 lane elevated expressway project which will be connecting from southern to northern part of Yangon. 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 highquality maintenance capability. IFC also said the project will help develop the economy. Source: Eleven Myanmar PwC September

14 Eleven Myanmar More than 10,000 apartments of public and staff housings to build in Mdy 21 Sep 2018 Companies will build over 10,000 apartments of public and staff housings in Mandalay within a two years time and 4,000 of them will be developed under public-private partnership (PPP), said Union Minister Kyaw Tint Swe for State Counsellor s Office during a ninth regular session of Union Parliament held on September 19. The government is implementing to develop urban projects and industrial cities in big towns like Yangon and Mandalay to modernize urban development and housings systematically within a three-year time. It hoped investment made by the businessmen in housing sector will facilitate the country s economic growth, he said. A total of 5,748 out of 10,924 apartments for public and staff housings have finished construction in the last two years. The rest are 70 per cent finished. We will continue to finalize the apartments and over 10,000 apartments under PPP agreement will be built within two and a half years time, he said. Anyone who wants to buy low-cost and affordable housings with a long-term installment plan has to open a housing savings account with a minimum of Ks10,000 in branches of Construction, Housing and Infrastructure Bank to meet 30 per cent of the cost. Source: Eleven Myanmar PwC September

15 Myanmar Times Belt and Road project tenders open to non-chinese: commerce minister 21 Sep 2018 The commerce minister said international companies will be invited to take part in Belt and Road-related projects and that the tender process will be transparent. As fractures between the international community, especially Western countries, and Myanmar widen, Myanmar should tap into the resources and connectivity offered by China s Belt and Road Initiative (BRI), analysts said. But Myanmar s participation must be based on responsible investments and take into account the risks. This month, U Soe Win, Minister for Planning and Finance, signed an Memorandum of Understanding regarding the China-Myanmar Economic Corridor (CMEC), a key component of the BRI. U Tun Tun Naing, permanent secretary for the Ministry of Planning and Finance, told The Myanmar Times that the government signed an umbrella agreement, while agreements on individual projects will have to be negotiated by the ministries from the two sides in the future. CMEC is a key component in BRI routes, covering a highway project from China s Yunnan Province to Kyaukphyu via Mandalay, as well as for the Mandalay-Yangon-Mawlamyine route. Beijing is keen to speed up implementation of the proposed highways but Myanmar has difficulties to catch up with such expectations, given the country s slowing economy and lacklustre investments from Europe and the US. Political analyst U Ye Htut, a former MP from Thibaw constituency, said that Nay Pyi Taw signed up to the deal quickly so as to secure Chinese investments as well as Beijing s support for the peace process. China s role in Rakhine affairs, peace matters and investment is important for us. As we take part in the BRI development, we accept that both sides will be fairly benefited. We will share the [fruits of] Chinese development, U Than Myint, commerce minister, said. Source: Myanmar Times PwC September

16 2. Weekly Key Policy News PwC September

17 Weekly Key Policy News Headlines Renewable energy law in the works to speed up development New policies unavoidable if Myanmar is to keep up in AEC Govt bans MLM firms National Planning Law Expects Highest Growth in Telecom, Industrial, Financial Sectors Losses mount on lease of govt land, action needed PwC September

18 Myanmar Times Renewable energy law in the works to speed up development 19 Sep 2018 The Ministry of Electricity and Energy (MOEE) is drafting a renewable energy law to develop the sector, said U Maung Maung Kyaw, Chief Engineer from the Department of Renewable Energy and Hydropower Plants under the MOEE. The ministry is aiming to generate 8 percent of the country s electricity through renewable sources of energy by By 2025, the target is for 12pc of all electricity generated in Myanmar to be renewable. We have plenty of natural resources such as solar and wind power. What s lacking is legislation to govern the development of renewable energy. Without the law, investors are not protected and we do not have a system for providing incentives, said U Maung Maung Kyaw. We understand the situation and will try to enact a law to govern renewable energy to speed up development, he added. The government will prioritise the development of solar energy, followed by wind energy, U Maung Maung Kyaw said. On the solar front, the state is currently building a plant in Minbu, Magway Region, which will have the capacity to generate 170MW of electricity when it is complete in February next year. The Minbu plant is the first solar powered plant in Myanmar. Two more solar plants are expected to be constructed soon, U Maung Maung Kyaw said. The plants will be built in Myingyan and Wundwin in Mandalay Region and are expected to have the capacity to generate 150MW of electricity each. Meanwhile, an agreement has been signed for China s Three Gorges Corporation to develop a 30MW wind power project in Chaung Thar, Ayeyarwaddy Region. It will be first such project in Myanmar. Currently, the MOEE is negotiating terms for the power purchase agreement. Development of the Chaung Thar wind power project will commence after, said U Maung Maung Kyaw. Source: Myanmar Times PwC September

19 Myanmar Times New policies unavoidable if Myanmar is to keep up in AEC 19 Sep 2018 With just three months remaining before it is due to join the Asean Economic Community (AEC), time is running out for Myanmar to improve its economic policies and prepare local businesses for foreign competition. By January 1, 2019, Myanmar, together with the other CMLV countries, which includes Cambodia, Laos and Vietnam, will officially be part of the AEC. The AEC s aim is for Asean to operate as a single market and production base with equitable economic development among members. If it is realised, the Asean market will enjoy free movement of goods, services and investments as well as freer flow of capital and skills. While the AEC will yield new opportunities for growth and development for Myanmar companies, it will also introduce challenges the country is currently far from prepared to face. It will, for example, introduce a new level of competition for Myanmar businesses as new investors enter the market and traders look at other countries for better deals, especially since there are few good quality Myanmar-made goods and brands fit for exports. Foreign competition In fact, foreign competition has already been rising in the country since the government allowed investments in the retail sector in May this year. Now, local retailers say there should be restrictions placed on foreign firms that directly compete with local SMEs and mom and pop shops. Myanmar has around 3 million small convenience stores that have run in the country for years. These shops will face no small amount of difficulties if major retail chains like 7-Eleven, for example, are allowed to enter, said U Myo Min Aung, deputy chair of communications and member affairs at the Myanmar Retailers Association told The Myanmar Times. Source: Myanmar Times PwC September

20 Myanmar Times Govt bans MLM firms 20 Sep 2018 The Ministry of Commerce (MOC) on September 18 issued notification (46/2018) which prohibits the business of multi-level marketing (MLM) in Myanmar. The ban will take effect immediately. Action will be taken against all MLM businesses found to still be in operation after the date of the issued notification, under the Essential Supplies and Service Law. The law states that those found to be in violation of the regulations could be punished with a minimum of six months up to a maximum of three years in jail. There will also be a fine not exceeding K500,000. The move comes after the Food and Drug Administration (FDA) met with 41MLM companies and conducted audits on the companies books in February. We are taking action after studying this field and having found that many consumers have fallen victim to MLM strategies. At the regions and states, some regional governments have already prohibited MLM businesses from operating, said U Khin Maung Lwin, assistant secretary of the MOC. U Maung Maung, secretary of the Myanmar Consumers Union, said his organisation has always been opposed to MLM. We have been calling for further regulation of this business model as many consumers have been negatively impacted by MLM, he said. Source: Myanmar Times PwC September

21 The Irrawaddy National Planning Law Expects Highest Growth in Telecom, Industrial, Financial Sectors 21 Sep 2018 YANGON Amid a slowing economy and complaints from the business community, Myanmar s parliament has approved a National Planning Law for the fiscal year which expects to see the highest growth rate in the country s telecommunications, industrial and financial sectors. On Wednesday, President U Win Myint signed the bill with the approval of the Union Parliament and it is to be effective from October 1 this year to September 30, According to the National Planning Law, the government expects to increase the growth of GDP from 6.8 percent to 7.6 percent, while the telecommunications sector is projected to grow by 15 percent, the industrial sector by 11.2 percent and the financial sector by 9 percent in the coming fiscal year. The law states that the government will make efforts to improve the trade sector by 7.7 percent, the mineral sector by 7.5 percent and the social management sector by 7.3 percent. Meanwhile, a growth of only 4 percent is expected in the fisheries sector, 2.9 percent in the energy and electricity sector, 2.4 percent in agriculture and 1.1 percent in the forestry sector. The government projects that the highest growth rates will take place in Yangon Region, Naypyitaw Union Territory, and Kachin State with rates of 9.8 percent, 9.6 percent and 9.3 percent respectively. The relative ministries will draw up implementation plans in order to facilitate improvements across the sectors. The law also instructs the government departments to make a review of all national projects and assess whether they are beneficial to the people or not. It states that projects must be suspended or canceled if they are found not to be beneficial to the people. The government departments need to compose a list of state-owned enterprises (SOEs) which make annual loses and suggests that they should be converted to private enterprises, according to the law. Source: The Irrawaddy t-approves national-planninglaw.html PwC September

22 Myanmar Times Losses mount on lease of govt land, action needed 21 Sep 2018 Even though the government is leasing out land and buildings at rates lower than then market price, no action has been taken to renegotiate those rates and narrow the losses incurred by the State, according to the Yangon Region Auditor General s report for For example, the Department of Garden and Playground Parks under the Yangon City Development Committee (YCDC) is leasing out shops within state-owned parks and around playgrounds to private businesses under long term rates that are now below market price. According to the report, these include shops and restaurants at Kandawgyi, Kan Taw Min and Myaing Hay Won parks. Despite different shop sizes, the monthly rental fee for all business owners at the park is fixed at K1 million, or around K12 million per year. This is after the fees were raised in , resulting in implied annual losses of about K2.1 billion for the YCDC against the market price. A total of 1,030 shops were allowed to open in state-owned parks in While the market price for leasing land is around K1,000 per sq ft in Dagon, the government is accepting rates at just K300 per sq ft, said U Kyaw Zeya, regional MP from Dagon township. As such, the government should re-auction the land at rates that are commensurate to the market, he said, adding that discussions will be made in parliament to ensure transparency and equity in any new auctions or lease negotiations. According to the Auditor General s report, the government racked up losses involving undervalued land projects totalling K14.2 billion in The projects include the Time City Project, Kantharyar Tower Project, Shwemoekaung Luxury Housing, 45th Street Complex Project and Golden Land Tower Project in Yangon. The process of leasing out land for such projects by the Urban and Land Administration Department lacked transparency even though the land is located in heavily populated townships. Source: Myanmar Times PwC September

23 3. Weekly Investment News PwC September

24 Weekly Key Investment News Headlines Korea-Backed Industrial Zone to be Developed in Hlegu Township US power firm expands into Myanmar Singapore s Campana raises $40m from Mitsui, others for fiber cable expansion TPG said to seal deal to become Myanmar s biggest tower owner Starbucks Coffee informs MIC of investment put on hold PwC September

25 Myanmar Business Today Korea-Backed Industrial Zone to be Developed in Hlegu Township 17 Sep 2018 The Ministry of Industry submitted a proposal to parliament for a $61.8 million loan from South Korea to build an industrial zone in Hlegu called the Korea-Myanmar Industrial Complex. The project will be developed on 600 acres of land where Nyaung Hna Pin Training School is located in Hlegu Township. The aim of the project is to promot investments and trade between the two countries, to further develop the industry sector. We view this as an important step, so we should not to lose any valuable time, Dr. Khon Win Thaung, a lawmaker, said. This project is located close to Yangon which has a metropolitan population of 7.6 million people and Hlegu is also close to Naypyidaw and Mandalay highways as well. Moreover, from Hlegu it will take approximately 35 minutes to drive to Yangon International Airport, 60 minutes to drive to the proposed Bago Airport (Hantharwaddy Airport), and about 95 minutes away from the Yangon Port located in Ahlone Township. Korean and Myanmar Companies can enter the market via those channels, he explained. The project is expected to lure investments from South Korea and create job opportunities for an estimated 50,000 to 100,000 people while supporting the economic growth of Hlegu Township. Moreover, it is expected to generate around $10 million in revenue from 200 companies operating the Zone, Lieutenant General Toe Lwin said. The Korea-Myanmar Industrial Complex will be funded with the loan from EXIM Bank of Korea, the Ministry of Industry reported to parliament. Source: Myanmar Business Today PwC September

26 Myanmar Times US power firm expands into Myanmar 19 Sep 2018 US-listed power management company Eaton Corporation announced its expansion into the Myanmar market through a partnership with Myanmar Golden Rock International Co (MGR), which provides technology solutions in the country, on Septemer 18. Together with MGR, Eaton will bring its expertise in power management technologies to the data center, healthcare, utilities and commercial building sectors with the aim of improving the reliability of existing and newly-developed power generation, transmission and distribution infrastructure in the country. Kidsada Santisak, Eaton country manager for Indochina West, said Myanmar displays growth potential in the power and energy market, with only a third of the country s population currently enjoying access to a stable supply of electricity. Demand for power and energy solutions will only grow as the country races towards electrifying 100 percent of Myanmar households, the primary goal set out in the Myanmar National Electrification Plan, he said. Eaton is listed on the New York Stock Exchange and headquartered in Ireland. The company registered sales of US$20.4 billion in 2017 and employs some 96,000 globally. Source: Myanmar Times PwC September

27 Deal Street Asia Singapore s Campana raises $40m from Mitsui, others for fiber cable expansion 20 Sep 2018 Singapore-headquartered Campana Group, a fixed line domestic and internet gateway data operator, has raised a $40 million Series B equity investment led by Tokyo-based Mitsui & Co, a global trading house, and existing individual investor Thein Htwe, the company announced in a release. The investment will play an important role in helping us continue our expansion into Myanmar, Thailand, and Singapore, said Dr. Myo Ohn, CEO, Campana. The financing will be used for the development of the SIGMAR submarine cable network, a 4-fiber pair that spans 2,200 km connecting Campana s International Gateway (IGW) facility in Thanlyin, about 16 km south-east of Yangon, to Tuas in Singapore. Campana will then offer diverse fiber backhaul to Yangon and Singapore via open access points of presence (POPs,) creating a data center corridor between Singapore and Myanmar. Branching units will be installed for both a future landing in Thailand and for sub-sea interconnection with cables coming from the West, according to the release. Apart from the equity funding, Campana is also raising an additional debt facility of $40 million which is expected to be closed over the next four months, said a company spokesperson during an interaction with this portal. The company is in advanced talks with international lenders for a commercial debt facility. Prior to the latest financing, the group raised $20 million from two public companies from Thailand, Advanced Information Technology Public Co Ltd and Loxley Public Co Ltd, and one from Singapore. Campana has already completed the TARO fibre cable that operates a cross border terrestrial route from Yangon to Thailand via Htee Kee at Dawei, the south eastern city of Myanmar. In addition to SIGMAR, the proceeds will also be used to accelerate its growth in enterprise and cloud services. The investments will lead to the convergence of a submarine cable gateway, datacenter hub, connectivity, and cloud. Source: Deal Street Asia es-campana-raises-40m-from-mitsui-others-forfiber-cable-expansion / PwC September

28 Deal Street Asia TPG said to seal deal to become Myanmar s biggest tower owner 20 Sep 2018 US private equity major TPG has finalized a deal to fully acquire tower operator Pan Asia Majestic Eagle, a rival to its portfolio company Apollo Towers, according to a report by the Nikkei Asian Review. According to the report, TPG has received government approval for the deal. However, an official announcement is yet to be made. TPG was first reported to be interested in the telecom tower deal in May this year. It was reportedly planning to merge the two telecom tower companies and become the majority shareholder of the combined entity. The merged entity, which is expected to have more than 3,000 towers and an enterprise value of at least $700 million, is set to surpass the current market leader, Irrawaddy Green Towers, that has about 2,500 towers in the country. The 100 per cent cash acquisition of Pan Asia and a share swap deal with Apollo s minority shareholders will leave TPG with an indirect ownership in both companies. Apollo s minority shareholders, US-based Tillman Global Holdings and AIM-listed Myanmar Investments International will see their shareholding halved to just under 7 per cent in the new company. Meanwhile, TPG will eventually hold per cent of the new entity, said the Nikkei report. The PE firm co-founded Apollo Towers with an initial investment of about $40 million from the TPG Growth found in 2014, around the same time as the country opened up its telecom market to foreign operators. It followed that up by investing in Myanmar Distillery Company in 2015 through its TPG Capital Asia Fund. A little over two years later, TPG completed the country s largest PE exit by selling its 50 per cent stake in Myanmar Distillery to Thai Beverage Public Co (ThaiBev) for about $494.4 million. The latest telecom tower deal comes at a time when international investors are concerned about the political and economic state of affairs in Myanmar. Cambodia, Laos and Myanmar-focused Emerging Markets Investment Advisors CEO Joshua Morris said Myanmar is in for a long, difficult ride as it battles these issues. Source: Deal Street Asia PwC September

29 Eleven Myanmar Starbucks Coffee informs MIC of investment put on hold 21 Sep 2018 American coffee franchise Starbucks informed Myanmar Investment Commission (MIC) that they have decided to suspend their investments in Myanmar, according to Director-General Aung Naing Oo of Directorate of Investment and Company Administration (DICA). On May 12, the Myanmar Investment Commission (MIC) endorsed Coffee Concepts Myanmar Ltd (CCM), a wholly foreign-owned food and beverage services provider. CCM is the operator of Starbucks in Myanmar, according to the MIC. CCM was registered with the Directorate of Investment and Company Administration in December 2017, a DICA document reveals. Starbucks, which was founded in 1971, has opened stores around the world, including locations in Asia in Brunei, Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. It had planned to open up at least 20 stores across Myanmar. According to 2017 data, there are 300 stores in the Philippines, 264 stores in Thailand, 249 stores in Indonesia, 220 stores in Malaysia, 125 stores in Singapore, 28 stores in Vietnam, 7 stores in Cambodia and 4 stores in Brunei. Coffee Concepts Ltd is based in Hong Kong and is partners with Starbucks. Coffee Concept (Myanmar) was established in December Source: Eleven Myanmar PwC September

30 3. Weekly New Tenders PwC September

31 Tenders (Myanmar) List Yangon Region Government, Expression of Interest, Upgrading and Renovation of Yangon City Golf Course on BOT Basis, Closing Date: 28 September 2018 Naypyitaw Development Committee, Invitation of Expression of Interest (EOI) for long-term lease in Naypyitaw Cement Factory, Closing Date: 16 November 2018 Note: tenders information are collected from and PwC September

32 Tenders (Multilateral organizations) List ADB: Sustaining the Gains of Regional Cooperation in the Greater Mekong Subregion - Transboundary Livestock Disease Control Specialist, Closing Date: 25 September 2018 Note: tenders information are collected from PwC September

33 4. MIC Permitted Projects PwC September

34 MIC Permitted Projects (Meeting 15, 2018) No. Name of Company Type of Investment Form of Investment 1 Stream Net Co., Ltd Telecommunications service Myanmar Citizen Investment Source: DICA PwC September

35 5. Upcoming Events PwC September

36 Upcoming Events (September 2018) List Date Location Name of Event Sector Price Focus Points Sep 2018 Yangon Agri Myanmar Agriculture Free Agri Myanmar is the leading agriculture event in Myanmar promises great chances for business cooperation, networking, potential market entry, as well as for exchanging useful information and innovative ideas. Note: Events information are collected from and PwC September

37 Upcoming Events (October 2018) List Date Location Name of Event Sector Price Focus Points Oct 2018 Yangon Mining Myanmar Mining Free showcases product from Minerals, Metals & Ores industry. This event showcases product from Minerals, Metals & Ores industry. like will provide companies with opportunities to see first-hand the potential in Myanmar's Mining sector Oct 2018 Yangon Building & Construction Myanmar Construction Free showcases product from Building Construction industry. This show will meet the need and demand of the construction industry Oct 2018 Yangon Myanmar Water Water Free This event will provide a platform to Meet and connect with over 5,000 quality visitors including water and wastewater industry's professionals, trade buyers, distributors, government representatives, Small and Medium Enterprises, thought leaders and visionaries for building new partnerships and proactive business opportunities Note: Events information are collected from and PwC September

38 PwC Myanmar Weekly Business Intelligence Publication For further information please contact: Jovi Seet Senior Executive Director Brandon Lye Director 2018 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. 38