Business Opportunities for Finnish

Companies in Myanmar04.05.2016

Myanmar After Elections

� First real Civilian President and Government

since 50+ years..

� The Lady Aung San Syu Kyi has been nominated

as ’Advisor for the State’, and will run the show

in practice.

� Military occupies 25% of Parliament and 3

Ministerial posts by Consititution

� Big restructuring of National and Provincial

Governments going on

�Now only 21 Ministries - before 36 (e.g. before

energy matters were devided under 8

different ministries..)

�Deputy Minister posts abolished

�Trend of privatizing of state enterprises,

requiring heavy investments, will continue.

�Pro business – pro foreign investments

�Transition has gone surprisingly smoothly

10/05/2016 © Finpro2

Industries with most opportunities

5/10/2016 © Finpro3

�Energy

�insufficient energy supply, private investments allowed, alternative sources

�Environment

�Waste management, waste to energy, industrial waste water, biomass

�Forestry & Agriculture

�from exporting logs to processing for more value added products

�from forest waste to energy (Myanmar-Finnish expert seminar maybe coming!)

�Mining

�huge untapped resources, GTKs advisory role at Mining Ministry

�ICT / Telecom

�mobile networks, optical lines

�Construction

�boom in real estate and industrial construction.

�Transportation infrastructure & Special Economy Zones

�deep seaports & industrial zones, roads, railways, airports, waterway dredging

�Capacity Building

�training of local authorities and private sector, vocational training

Electrictity Generation and Distribution

�Only 30% of the population gets electricity from

the Government grid !

�Hydropower dominates - seasonality

�Huge market for diesel generators and other back

up power solutions!

� Decentralized electricity & minigrid solutions

�IPP for industrial zones and major cities

�Coal, gas, liquid fuels (6 power plant projects

nearby Yangon completed 2015)

�Renewable energy

�Solar, Wind, mini hydros

�Waste to energy

�From Forest waste to Energy

�Fuel from MSW?

10/05/2016 © Finpro4

Forestry & Agriculture

�From log smuggling to value added exports

�Teak (80% of world’s teak exports) and other hardwoods

�Log exports banned – development of mechanical wood processing

�EU’s FLAG certification – traceability, documentation

� From forest waste to energy

� Possible expert seminar planned for Oct/Nov 2016

�Pulp & Paper, Cardboard industry

� modernization/rebuilding old mills

� foreign investments for new mills, local interest for small mills

� Plantations

� Foreign investments now allowed

� Eucalyptus (Oji, AA), rubber, teak etc

� Regular auctions of 400ha coming

� Agricultural machinery

� Food products processing, storate, cooling..© Finpro5

Mining

�Plenty of Untapped Resources

�Gold, gemstones, copper, lead, zinc, nickel, tin, antimony, chrome, uranium etc..

�Exploration, extraction of different minerals, feasibility studies, engineering..

�New Foreign Investment Legislation

�Foreign ownership extended on mining projects

�Exempt from income taxes for the first five years of operation in Myanmar

�Foreign investors able to lease land for up to 50 years with possibility to extend 2 times 10 years

�Australian and other multinational companies waiting further clarifications

� GTKs Advisory Role at Mining Ministry !

10/05/2016 © Finpro6

• This mining site, like others along the Irrawaddy River, is a concession given by

Burma’s ruling military junta to local warlords or businessmen.

ICT & Telecom

� Mobile networks

�Mobile penetration 7% in 2012, 60%

in 2016 and 90% in 2-3 years time !

� Engineering, hardware, construction,

capacity building etc.

�Telenor (budget 1 billion Euros,

technology from Ericsson and

Chinese, license for 15 years)

�Ooredoo (budget 15 billion USD,

technology from Nokia and Chinese).

�Myanmar Post & Telecom (MPT), …

� E-payments, payment & credit cards

� 1st ATM 2015, credit cards 2015..

� No clear regulations exist yet

�Internet Users

�400,000 (0.8% of population in 2015)

�WiFi in public places, transport etc.10/05/2016 © Finpro7

Construction

�Real Estate Booming

�47 new hotel investment projects approved for Yangon, Condominiums and Service Apartments, Offices etc

�30+ story buildings coming

�Foreigners can now buy 40% of units (buildings over 12 story)

�Foreign investments now possible

� Industrial Areas

�Foreign investments are pouring in

�Land ownership possible for up to 70 years

� Machinery

�Ready market for all kind of 2nd hand machinery

�New methods to speed up construction needed (precast elements etc.)

10/05/2016 © Finpro8

Transportation Infra & Special Economy Zones

�New Special Economy Zones and Seaports

�Dawei, Thilawa, Kyaukphyu (Phatein,

Belugune). New deap seaporst for

Dawei & Kyaukphyu (in the future)

�New seaport for Thilawa (now) and

existing 5 ports in Yangon/Thilawa area

expected to expand

�SEZs in border areas with Thailand

�Electricity for SEZs and other IEs

�Airports

�New international airport for Yangon in

Bago (80km from Yangon downtown)

�Upgrade of regional airports

�Railways, Roads, bridges

�Rivers - Huge need for dredging!

10/05/2016 © Finpro9

Environment

�Municipal solid waste management

�Yangon, Mandalay, but also smaller cities and tourist spots

�Waste collection a big challenge

�80% organic waste

�Industrial waste water treatment

�Mandalay

�Water supply & purification

� Water supply in Cities and rural areas

� Yangon water pipes rehab project

� Mountainous areas

� Salt removal

�Dredging of water ways/reservoirs

�Interested of Finnish Oil Spill management!

�Waste to energy, pyrolyses (?)

�Biomass and Biogass

�Agri and forest waste, MSW

�Financing..

�Looking for private investors

�ADB, WB, EU..?10/05/2016 © Finpro10

Medical Sector

� “If yet get sick in Myanmar, the nearest good hospitals are in Bangkok..”

�Under developed hospital sector

� 56000 hospital beds (population 51m)

� 0.6 doctors / 1000 people

� Over 50000 local patients travel to Bangkok for treatment annually

� Under developed laboratory sector

� Lab samples for more advanced tests are sent to Bangkok and Singapore

� Capacity building needed in medical education

� ASEAN integration (AEC) has opened door for easy investments from Thailand and other AEC countries

� Local private hospitals expected to upgrade and expand their facilities

� WB, ADB, WHO active in this sector

10/05/2016 © Finpro11

International Project Financing

�Asian Development Bank (ADB)

�$1 billion for 2013-16. (e.g. rural off-grid

renewable energy)

� New 5 year plan under planning

�World Bank, IMF, IFC

�$2 billion package for agriculture, energy

and health.

� New 5 year plan under planning

�Other

�Japanese (JICA) and other countries

bilateral development projects

�EU – Health, rural development

�EEP Mekong (Finnish MoFA)

�Asian Infrastructure Fund (AIIF) ?

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Finpro

*World Bank Group President Jim Yong Kim visits

the Myanmar North Dagon Township Hospital.

Summary

�World’s fastest growing Economy in 2014 !!

�Large untapped natural resources (oil, gas, minerals, teak etc.)

�Insufficient electricity supply, decentralized power generation, alternative sources –electricity investments have top priority!

�Large infrastructure investments for telecom (Finns are already involved) and transportation infra

�Capacity building needed in every field (especially vocational skills)

�Huge need for international financing to activate infra projects, but ADB, World Bank, EU and bilateral financing from many countries have started to pour in

�Existing market for 2nd hand (and new) generators, transportation-, agricultural-, forestry- and construction machinery

�“We might be 2-3 years too early for our business, but if we come back after 2-3 years, we will be already too late..!”

�Finpro – Finland Trade Center in Myanmar

�Aye Maw, aye.maw@finpro.fi, +95 (0) 9 255 803 325

�Kai Tuorila, kai.tuorila@finpro.fi, +66 (0) 81 815 2029

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Finpro