1 New Business Opportunities - PowerPoint Presentation

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New Business Opportunities

Opening of

MyanmarMarket

25th October 2013

Tatmataw Hall, Yangon

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Opening Myanmar Market : New Business Opportunities

Presentation Outline 

Myanmar in BriefCurrent Myanmar Economy Outlook (Trade & Investment)Foreign Investment Law InformationInvestment Opportunities in Myanmar (By Sector)

Manufacturing Sector in MyanmarSpecial

Economic Zones in Myanmar

Conclusion

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Nay Pyi Taw

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KACHIN STATE

CHIN

STATE

SHAN STATE

KAYA STATE

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SAGAING

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MAGWAY

DIVISION

BAGO

DIVISION

YANGON

DIVISION

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CHINA

LAOS

THAILAND

INDIA

BANGLADAHS

Yangon

The Land:

The largest country on the mainland of South east Asia.

Total land area:

676,577 sq. km

50% mountains and

forests (northern and eastern)

Total coastline:

2,832 k

m

Total international borders of 5,858 km

Population:

60.97 millions

(Male 49.43%

& Female 50.57%)

Growth Rate: 1.84%

Literacy

Rate: 89.9 %

GDP:

USD 89.23 Billion

GDP per

capita:

USD

855

GDP Growth Rate : 7.6% (2012 – 2013)

Inflation : Remained Single digit

Since 2009 (3% to 5%)

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The Republic of the Union of Myanmar

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Policy and Economic Landscape

in Myanmar

Changes in Local : Policy ReformsChanges in Region :

Strategic Potential, GMS Economic Corridors, Deep Sea PortsSpecial Economic Zones, Special Industrial Zones (Pa-an in Karen State) and Local Industrial Zones

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Reviewing Myanmar Strategic Potential

India

1.2 bilChina

1.3 bil

Bangladesh158 mil

Laos 7 mil

Thailand

67 mil

Total People

2.8

bil

India

$4,060 blnChina$10,090 bilBangladesh$258 bilLaos $15 bil

Thailand

$622 bil

Total GDP(ppp

)US$15,088 billionWorld Factbook$76.5 bil60 million28th Most Populated, 40th Largest in the world and 2nd Largest in ASEAN41%World’s Population17%World’s GDP

Source : The World Factbook 20115

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Double Taxation Avoidance Agreement With :

Thailand

SingaporeMalaysiaIndonesiaVietnam

PREFERENCESASEAN FREE TRADE AREA – AFTAASEAN ECONOMIC COMMUNITY - AECASEAN COUNTRY OF ORIGIN (CO)

ASEAN INTEGRATION SYSTEM OF PREFERENCES (AISP)ASEAN’S & WTO’S SPECIAL AND PREFERENTIAL TREATMENTS TO MYANMAR

Regional Markets’ Opportunities

Over 600 millions Population

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MYANMAR

Thai

Cambodia

Lao

Vietnam

China

Japan

Korea

Malaysia

Singapore

Brunei

Philippines

Nepal

IndiaBangladeshBhutan

Sri Lanka

Regional Connectivity & Emerging Trends

ASEAN, ASEAN+3, GMS, BIMSTEC

Harmonized Rules and Regulations and Free Trade & Services DevelopmentACMECAyeyarwady, Chaopya,Mekong EconomicCooperation StrategyASEAN (AEC -2015)ASEAN+3GMSGreater Mekong Sub-regionBIMSTECThe Bay of Bengal Initiative for Multi-Sector Technical and Economic Cooperation

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GMS Highway

North-South Corridor

East-West Corridor

Southern CorridorNorthern Corridor

Western Corridor

Central Corridor

Eastern Corridor

Southern Coastal Corridor

NorthEastern

Corridor

Kunming-Bangkok

Mawlamying-DanagDawei-Quy Nhon

Fangcheng-Tamu

Tamu-MawlamyingKunming-SallahipKunming-Ho Chi MinhBangkok-Nam CanNanning-Bangkok

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Current Myanmar Economy Outlook (TRADE)Top Ten Export & Import Items of Myanmar

(2012-2013)

No

Items

Value ( USD Million)

Percentage

(%)

Items

Value ( USD Million)

Percentage

(%)

1

Natural Gas 3060.93

40

Petroleum Products

1597.73

202Pulses & Beans 825.7811Vehicles & Spare Parts 1243.56153Garment 592.01 8Construction materials 704.0594Marine Products 559.247Iron and Steel Materials495.5965Forest Products 527.147Machinery and Spare Parts352.0146

Rice 451.86 6Palm Oil281.6337Jade 319.23 4Plastic Raw Materials268.3638Sesame 218.56 3Ships, Boats and Spare Parts249.3839Rubber 217.123Pharmaceuticals239.84310Maize154.63

2Fertilizers 150.522Total Exports7612.68Total Imports8192.04Source : Ministry of Commerce

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Top Ten Trading Partners of Myanmar(2012-2013)

Figures in USD Million

Source : Ministry of Commerce

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Current Myanmar Economy Outlook (INVESTMENT)Foreign Investment of Existing Enterprises by Country

As of (31/08/2013)

No.CountriesPermitted Enterprises

%

No.

Approved Amount

1.

China

30

14,110.984

41.972.

Hong Kong

406,353.46418.903.Republic of Korea702,966.259

8.82

4.

Thailand30

2,871.6838.545.U.K282,493.2227.426.Singapore572,099.1696.247.Malaysia191,028.1923.068.Vietnam6511.1861.559.France1465.0001.3810.India8278.6000.8311.Japan26171.3390.51Source : Directorate of Investment and Company AdministrationFor Complete list, please visit : www.dica.gov.mm/dicagraph1.htmFigures in USD Million

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Foreign Investment of Existing

Enterprises by Sector (31/08/2013)

No.

ParticularsExisting Enterprises  %

No. Approved

Amount

1

Oil & Gas

64

13.630.102

40.54

2Power513,207.921

39.29

3Mining92,304.4966.854Manufacturing1852,201.1466.555

Hotel & Tourism

33

1,339.6753.98

6Real Estate9347.8701.037Industrial Estate2179.1130.538Agriculture7156.6700.479Transport & Communication7137.6760.4110Livestock & Fisheries888.0620.2611Other Services1025.2670.08Total33933,617.997100Source : Directorate of Investment and Company AdministrationFigures in USD Million12

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Criterion for Foreign Investment

Safeguard of environment conservationTransparency and accountability in financial mattersCreate job opportunities

Abide existing labor lawSupport corporate social responsibilities consistent with regional and international standard and agreementsTransfer of TechnologyEncourage and create level playing field among investors

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Highlights of New Foreign Investment Law

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MIC will consider investments based on the priority industries

Labor intensive Industries

Value-added industriesIndustries that contribute to living standard of Myanmar in all aspects

Capital intensive industries

Advanced Technology industries

Goods & Services which focus on welfare of citizens

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Land Lease

Investment Law

50 Years

(For Initial Period)

10 Years

(First Extension

)

10 Years

(Second Extension)

Depending on the business, type of business and investment amount

Land

Lease

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Few Tips for Myanmar Business Environment

Local currency is Myanmar Kyat and it is around K 960 per USD.Corporate Tax is 25%

of total profit annually. 5% Commercial Tax for imported items and products outside industrial zones. 3% for products produced in industrial zones. Items such as alcohol, cigarette etc. subject to much higher tax rate. Average worker’s monthly wages is around K80,000 per month without OT.Current commercial and industrial land depends on the location and prices are rather high at this moment.Bank deposit rate is 8% and lending rate is

13%. (Lending rate for SME – 8.5%)Electricity rate is K50 for resident & K75 for businesses.

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Investment Opportunities in Myanmar

(By Sector)

MatureGrowing

StarsAgriculture

EducationGarments & CMPAutomobiles

Fishery

Hotel

& Tourism

Oil

& Gas

Electronics and AssemblyForestryHospitalityEnergy & ElectricityBiotechGemsHealthcare & BeautyIT & TelecommunicationInsuranceJob AgenciesFood and Consumer goodsBanking & FinanceInvestment Firms

Commodities

Mining & MineralsLogisticsReal Estate & PropertyPharmaceuticals AgencyConstructionIndustrial SuppliesInfrastructure

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AGRICULTURE SECTOR

Country’s Total Area : 676,590 km

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Land Area : 653,520 km2 Water Surface : 23,070 km2Agriculture is a vital source of income for Myanmar, making up

36%

of

GDP and

28%

of exports value for 2012-2013.

Agricultural Land : 119,840 km2

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Livestock and Fisheries Sector

Continental Shelf

area:228,781 km2Length of coastline:2,832

kmSwamp Land:0.5 Million Hector

Production

(2012)

Over 4.1 Million tons

Exports (2012-2013)

559 USD Millions

5

th largest contributor to GDPForeign Investment:USD 88.062 Million as of 31/8/2013

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FORESTRY SECTOR

According to FAO, 48.3% or about 31,773,000 ha of Myanmar is forested.

Major exporter of teak in the world, takes up 75 percent of the world market.About 7% of Total Export.

Potentials for Value added production of other Forest Products:

Bamboo, Cane, Rattan

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MINERAL SECTOR

Eastern

HighlandsCentral

Belt

WesternRanges

Lead,Zinc

Copper

Silver

Tungsten

Antimony

IronPorphyryCopperGoldCoalOil & GasNickelChromitePGM

Jade is

seventh largest export item with the amount of over USD 319 Millions. 2.8 Billion USD investment by 67 Enterprises.

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OIL & GAS SECTOR

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4 offshore projects are currently operated by Foreign Firms.USD

4.1 billions are expected from Gas Exports in 2013.

53 onshore &

51

offshore blocks available for JV

With foreign companies.

Myanmar offshore reserves are estimated to be

71 Trillion cubic feet (tcf).Estimated crude oil reserves is 540 MMBL.

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TOURISM SECTOR

Annual Tourist Arrival

2010: 791,505

2011: 816,369

2012: 1,058,995

Booming sector after reform

Country

Hotel/Apartment

Investment in USD Million

Singapore

12597,756Thailand11263,250

Japan6

183,013Hong Kong477,000Malaysia220,000British13,400Total361,144,419

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Manufacturing Sector in Myanmar

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KAYA STATE

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YANGON

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THAILAND

INDIA

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Industrial

Zones in Myanmar

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Industrial Zones in Yangon State

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Industrial Zones in

Ayeyarwaddy

State

1

Industrial Zone in Chin Division

3

Industrial Zones in Mandalay State

1

Industrial Zone in Shan Division

2

Industrial Zone in

Magway

State

1

Industrial Zones in

Bago

State

1

Industrial Zone in Mon Division

1

Industrial Zone in

Tanintharyi

State

1

Industrial Zone in

Sagaing

State

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Manufacturing Sector

Monthly wage for

Mfg WorkerUSD 68Office Rent per Sq. MeterUSD 23

Mobile Phone charges per minuteUSD 0.30Corporate tax

25%

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Sectors Distribution of Registered Industries in MyanmarAs of

30/01/2013

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Special Economic Zones in Myanmar

Kyauk

Phyu

Thilawa

Dawei

Incentives under SEZ Law

Imported raw material

Machineries

Equipment

Machineries

Vehicles

Tax

holiday

- 5 years

Second 5 years - 50% relief on income tax – overseas sale products Third 5 years - 50% relief on income tax – reinvestment obtained from export sale Export Processing Zone5 years

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DAWEI Special Economic Zone

Conceptual Plan

DAWEI

A New Global Gateway to Enhance ASEAN Economic Landscape

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In the SEZ plan,

SEZ

and industrial zones will be as follows;

Special Industrial Zone (for FDI)- 2400 hectaresLocal Industrial Zone- 430 hectaresSingapore Myanmar Development (SINMARDEV) Industrial Zone -247 hectaresSea ports and container yardThilawa Special Industrial Zone – 3,170 hectares

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Thilawa

SEZ

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Conclusion - Why

Myanmar

?After 50 years of isolation, Myanmar door have been unlocked

On the new path of becoming democratic nation

Sanctions are moving away

Acting integration into international and regional communication

Striving to meet Millennium Development Goal.

More International Investments are approaching.

Overwhelmed by the political and economic reform

Gearing up for SEA Games 2013, ASEAN Chairmanship 2014 and AEC, AFTA 2015

Myanmar will be the biggest treasury land for the investors

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Thank you for your kind

attention

U Aye Tun

(Joint Secretary)

uayetun@gmail.com