SEIZING OPPORTUNITIES IN MYANMAR Open Day For... · 5.0 Business Opportunities in Myanmar Potential sectors Pharmaceuticals and Medical Devices • The pharmaceutical and medical

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION

SEIZING OPPORTUNITIES

IN MYANMAR

MATRADE Yangon

10 August 2015

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1.0 Economic Development

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• Recent developments – relaxation of export and import licence requirements;

– introduction of the Myanmar Investment Law and Competition Law;

– setting-up of a national trade portal;

– enrolling for the Extractive Industries Transparency Initiative (EITI);

– joining the Open Government Partnership (OGP);

– implementation of Health insurance;

– imminent establishment of the Yangon Stock Exchange;

– launching of the National Export Strategy (NES);

– deployment of mobile inspection teams at various check-points and border crossings; and

– awarding of licences for foreign banks to operate in Myanmar.


2.0 Why Myanmar Myanmar’s strategic potential

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52 Million


2.0 Why Myanmar Myanmar’s Economic Potential

1. GDP Growth

– Potential to achieve USD200 billion+ GDP in 2030, over four times as high

as today

– Average economic growth of 8.25 per cent over the next few years (IMF

forecast)

2. Expansion of the Consumer Class

– Consumer spending potentially tripling from USD35 billion to USD100

billion in 2030

– Consuming class of 19 million in 2030 from 2.5 million in 2010

3. Foreign companies coming in

– Influx of foreigners and factories, (Coca-Cola, GE, KFC, Colgate)

– Myanmar has garnered the interest as the last frontier market

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2.0 Why Myanmar Myanmar’s Economic Potential

4. Country is in dire need for infrastructure and

human resources development – Telecommunications, infrastructure, logistics, air networks, training and

vocational skills needed

– Opportunities for Malaysian companies to share expertise and

international experience

5. Reforms going in the right direction – Government is making strides in improving transparency (Open

Government Partnership)

– Going towards the ASEAN Economic Community and improving

compliance with WTO

– Shifting from central state-owned economy to market oriented economy

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Malaysia’s Major Exports to Myanmar 2014

• Petroleum Products USD 285mil/35.4%

• Palm Oil USD 164mil/20.4%

• Chemicals & Chemical Products USD 103mil/12.7%

• Processed Food USD 36mil/4.4%

• Machinery, Appliances & Parts USD 36mil/4.4%

Total Exports 2014: USD 805.4 million

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Malaysia’s Major Imports from Myanmar 2014

• Agricultural products USD 47mil/28.3%

• Crude natural rubber USD 30mil/18.1%

• Seafood, fresh, chilled or frozen USD 22mil/13.2%

• Sawn timber USD 17mil/10.0%

• Processed food USD 15mil/8.9%

Total Imports 2014: USD 166.8 million

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MALAYSIAN PRODUCTS IN MYANMAR










MALAYSIAN BRANDS IN MYANMAR

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION 14

NO. COUNTRY AMOUNT (US$ MIL) PERCENTAGE (%)

Total 56,618.117 100.00

1 China 14,778.698 26.10

2 Thailand 10,285.681 18.17

3 Singapore 10,249.389 18.10

4 Hong Kong 7,176.199 12.67

5 United Kingdom 4,051.858 7.16

6 Republic of Korea 3,374.699 5.96

7 Malaysia 1,657.688 2.93

8 The Netherlands 981.991 1.73

9 India 727.689 1.29

10 Viet Nam 688.586 1.22

Source: Directorate of Investment and Company Administration (DICA), Myanmar

3.0 TOTAL INVESTMENTS INTO MYANMAR

BY COUNTRY (AS OF 30 JUNE 2015)


4.0 Investing in Myanmar

• Focal point is the Directorate of Investment and Company Administration (DICA)

• Promoted sectors – Agriculture

– Mining

– Oil and gas

– Hotel and tourism

– Power / electricity generation

• Introduced Foreign Investment Law in 2012 to promote FDI

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5.0 Business Opportunities in Myanmar Potential sectors

Construction & Building Materials

• The construction sector is expected to expand at an annual rate of at least 8% over

the next five years. The industry is valued at $3bn, with the residential segment

accounting for half the sum.

Power

• Myanmar’s annual electricity consumption rate is expected to increase 13% per year,

currently totalling 4,362 MW. Currently, only 30% of Myanmar’s population have

access to electricity with frequent power cuts.

Human resources development

• Myanmar is facing a shortage of trained and capable labour in a range of industrial

sectors that could undermine the nation’s development prospects. The country’s

demand for skilled workers is expected to reach a level equal to almost half the

population by 2015.

Oil & Gas

• Myanmar has 7.8 trillion cubic feet of proven natural gas resources worth about

USD75 billion waiting to be discovered.

• 20 offshore and 25 onshore blocks awarded

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5.0 Business Opportunities in Myanmar Potential sectors

Pharmaceuticals and Medical Devices

• The pharmaceutical and medical equipment market in Myanmar is expected to grow

to USD800 million by 2020

Hotel & Tourism

• The tourism boom, which brought in a record number of 1 million tourists into

Myanmar in 2012 has drawn interest from hotel owners to invest in the country.

Other potential sectors

• Information & Communication Technology (ICT)

• Electrical & Electronic Products

• Medical tourism

• Fast Moving Consumer Goods (FMCG)

• Auto parts and accessories

• Processed food

• Franchise

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6.0 Challenges Doing Business in Myanmar

• Weak legal framework

• Limited pool of skilled and talented workforce

• High land prices

• Foreigners not allowed to own land

• Foreigners not allowed to do trading

• Competition from border trade

• Funding and technical assistance is expected

• Inadequate infrastructure

• Small quantity orders

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7.0 Strategies Doing Business in Myanmar

• Work with consolidators in Thailand and Singapore that has direct border access / shipping lines to increase market access.

• Work with local partners, distributors and agents

• B2B initiative between chambers and business associations of Malaysia and Myanmar (UMFCCI) for joint promotion activities

• Joint-venture to set-up manufacturing base in Myanmar as gateway into neighbouring markets and the EU (under GSP scheme)

• Leverage on Maybank’s presence in Myanmar

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8.0 ASEAN Economic Community

AEC – Is Myanmar

prepared? • Lack of awareness

• Trading restricted to

local companies

• Economy just opened

past 3 years

• Local industry is not

ready

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Number of Tariff Lines at 0% in the ATIGA Tariff Schedule of 2013

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Trade in Goods

(Rules of Origin)


Flexibility on seven % (7%) of tariff lines for CLMV

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Trade in Goods

(Rules of Origin)


9.0 Business Customs & Practices

• Cash based transactions still the norm

• Focus on personal relationship

• Provide technical training and

assistance, credit facility and

promotion incentives

• Culture and traditions are strongly

upheld

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10.0 Do’s and Don’ts Doing Business in Myanmar

• Don’t take yes to mean

agreement or action

• Be realistic about your local

partner(s)

• Get to know the local culture

• Get it down in writing

• The key to success –

preparation

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11.0 MATRADE Trade Promotion

Activities in Myanmar (2015)

MATRADE Yangon is coordinating the following activities in 2015:

• Special Projects Business Visit to Yangon & Nay Pyi Taw (23 - 27 February 2015);

• Specialised Marketing Mission on Construction & Related Services (16 - 20 March 2015);

• Specialised Marketing Mission for Construction & Building Materials in-conjunction with BuildTech Myanmar 2015 (27 - 29 May 2015);

• Specialised Marketing Mission on Tourism, Hospitality and Culinary Services (2 - 5 June 2015);

• Specialised Marketing Mission on Oil & Gas Sector (25 - 28 August 2015);

• Specialised Marketing Mission on ICT (8 - 11 September 2015); and

• Malaysia Services Exhibition & Showcase Malaysia (30 Sept - 3 October 2015).

• Incoming buying missions to Malaysia (year round)

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12.0 How MATRADE Yangon Can Assist

• Identify potential distributors, partners for joint ventures

• Arrange business meetings and conduct basic due diligence

• Advisory services as well as the dissemination of market information, market intelligence and industry reports

• Trade promotion activities (Specialised Marketing Missions, Showcase Malaysia / Malaysia Services Exhibition (MSE), Incoming Buying Missions)

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Snapshot of Activities

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Contact us

MATRADE Yangon

Embassy of Malaysia (Trade Section)

82, Pyidaungsu Yeikhta Road

11191, Dagon Township

Yangon, Myanmar

Tel : +95-1-230 1951 / 52

Fax : +95-1-230 1954

URL : www.matrade.gov.my

E-mail : [email protected]

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http://www.matrade.gov.my/

mailto:[email protected]

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SEIZING OPPORTUNITIES IN MYANMAR Open Day For... · 5.0 Business Opportunities in Myanmar Potential sectors Pharmaceuticals and Medical Devices • The pharmaceutical and medical