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Newsletter | November 2017

News |
Insights
Office Exhibition |
Upcoming Events

Myanmar Newsletter

Dear reader,

Welcome to the November edition of our Myanmar Newsletter! The end of the year is approaching fast and we again are proud to provide you with a short overview on the major topics and headlines about Myanmar.

The month of November was full of events.  We participated in the Asia Pacific Regional Conference  in Perth organized by the German Australian Chamber of Commerce and we also represented Myanmar on various events organized by IHK Stuttgart, IHK Reutlingen and IHK Munich. VDMA organized an excellent workshop in Frankfurt, where we presented insights to the Food & Beverage sector in Myanmar.

If you wish to receive more frequent information, please like us on facebook or visit our website!

Yours truly,


Martin Klose,
Delegate of German Industry and Commerce in Myanmar


News

Political, economic and legal news

  • Change of fiscal year approved. Myanmar's new financial year will be dated from 1 October to 30 September. As the ongoing financial year ends on 31 March, there will be a six-month gap next year before the new rule becomes effective. Authorities changed the fiscal year to get the dry season (November-May) into one financial year, which shall improve the circumstances for infrastructure projects. However, there is a lot of skepticism about the change.
Linkicon  More information

  • Govt allows foreign JVs to trade agri machinery. The government will allow foreign joint ventures to import and sell agricultural machinery. This step will help to meet the high domestic demand for this type of machinery.
    Furthermore, import competition may force domestic producers to increase the quality of their products and/or reduce prices.
    Overall, farmers benefit as prices are likely to decline and product variety and quality will increase.
Linkicon  More information

  • Reforms in Myanmar's banking sector. The Central Bank of Myanmar (CBM) agreed with private banks on rules for handling the extensive amount of mostly open-ended "overdraft loans", accounting for around 70% of Myanmar's 9 billion USD lending pool. Furthermore, the CBM is about to increase the maximum bank lending rate to 16% and considers to allow non-collateral loans.
    Myanmar’s banking assets have jumped to 55% of its GDP in 2016 from 15% in 2011.
Linkicon  More information

  • New companies law passes parliament. Myanmar’s new companies law has recently passed the parliament currently pending to be signed by the President. Under the draft law, a foreign company is defined as a company of which a foreign individual or corporation holds more than 35% ownership stake. Additionally, the payment of dividends when the company does not make profit and the reduction of share capital are easier now. The draft law (as of July 2017) can be found under the link below.
Linkicon  More information


Investment and business news

  • MIC describes export-oriented investments, grant tax exemption. The Myanmar Investment Commission (MIC) announced that it considers investment activities as 100% export-oriented investments if the investors supply all of their finished goods and semi-finished goods manufactured locally to investment businesses which are 100% export-oriented without supplying the domestic market. According to the Myanmar Investment Law (section 77 b), such companies can apply for a tax exemption or relief, particularly of import tariffs.
    Linkicon  More information
  • Myanmar's first modernized agricultural wholesale market to launch. This November, Danyin Gon fruits and flowers wholesale market in Insein township will reopen after modernization. The new market consists of 7 hubs and 5,600 shops which can be rented for 80,000 MMK per month. Another possibility is to rent a sales stall on a daily basis for 600 MMK. Furthermore, the market provides cold storage and staff for security and cleaning, respectively.
    Linkicon  More information
  • 2.5-billion-dollar power plant to boost power. Thai company TTCL Public Company Ltd will invest 2.5 billion USD to construct a coal-fired power plant in Karan State. The power plant shall fully work in 2024 and provide 1,280 MW electricity. TTCL and the Myanmar government agreed on a 40-year lease for the project area land. Furthermore, 95% of the generated profit will go to TTCL while the remaining 5% go to the Myanmar government. As coal-fired power plants are highly controversial, there is protest among the population against this projects.
    Linkicon  More information

Insights

Metro sets up warehouse in Thilawa SEZ

METRO Cash & Carry is a German Wholesale & Food Specialist with more than 750 stores in 25 countries, primarily serving over 21 million professional clients, including hotels and restaurants, catering and hospitality companies, independent small retailers, and institutions and offices.
The presence of METRO Cash & Carry will bring global best practices in supply chain management to support operations in Myanmar by three main activities: sourcing, warehousing and delivery. For sourcing, METRO Cash & Carry will help to develop high quality products by working together with local farmers. For warehousing, they will process and package of goods and provide QA labs for assuring quality. Delivery will be done by local logistic service providers, but the company will keep close contact to its customers.
METRO Wholesale Myanmar Ltd. marked the beginning of its warehouse construction in Thilawa Special Economic Zone in mid-September 2017.


Office exhibition

Bart Was Not Here
Linkicon  Current exhibition: Bart Was Not Here


General Information

Special announcement: Furniture factory for sale
You have the opportunity to buy a Yangon based timber manufacturing firm which was established in 2000. There is a  2-acres property with steel-buildings on it. The firm covers the whole production chain having a sawmill and machines needed for furniture production. The land is leased by a 60-years contract including an option to renew the lease. There are 50 employees, and the company has a timber business license which allows exporting as well.
The current owner is looking for someone who is willing to purchase the whole company including factory, licenses and machinery. Though buyers who are interested in the whole company are prioritized, buyers who are only interested in land and buildings are also welcome.
For more information, please contact AHK Myanmar

 Green Energy Solutions

The Delegation of German Industry and Commerce in Myanmar recently published a Factsheet on Photovoltaics and Aquaculture (in German language). Especially with their cold storages and aerators, aquaculture producers need a lot of electricity. Furthermore, these farms are often located in remote, off-grid areas, which makes photovoltaics very attractive for energy production.
The factsheet is available for download on our website.

Key figures for Myanmar
 GDP growth (est. 2017)6.4%, GDP: 72 billion USD
 Population (2017)53 million
 Export goods (2016)11 billion USD; China, Thailand, India
 Import goods (2016)16 billion USD; China, Singapore, Thailand
 Export services (2015)3.86 billion USD
 Import services (2015)2.44 billion USD
 Current account balance,
 % of GDP (2016)
-5.8%1
 Exports to Germany goods (2016)2172.4 million USD; apparel, footwear
 Imports from Germany goods (2016)276.8 million USD; machinery, vehicles
 Inflation rate6.9%
 Unemployment rate30.8% (2016, ILO), 4% (2014, Myanmar Census)
 Central Bank interest rate                 
10%
 Lending/deposit rate13% lending (may increase to 16%, see below), 8% deposit
 Exchange rate November (2017)1 EUR = 1,600 MMK
1 The actual deficit may be significantly lower as exports are not always recorded.
2 Using mirror trade data gives significantly higher imports (155.8 million USD) and exports (358.8 million USD), respectively.
3 The ILO includes the approx. 10 million people in unpaid and subsistence work, while the Myanmar Census excludes them.
Sources: Trade data: UN Comtrade and UNCTAD (FDI), Economic data: WB and IMF, CBM for interest rates


German-ASEAN Business Council
Project Calendar for the ASEAN region 2017/18   
(in German language)

Linkicon  Project Calendar ASEAN 2017/18

Upcoming Events

07.12.2017 | Cafe Mahlzeit, Yangon, Myanmar
Export Natural Sweeteners to Germany and the EU
09.12.2017 | MICC2 Nay Pyi Daw, Myanmar
Myanmar Entrepreneurship Summit 2017
13.12.2017 | OLEA Restaurant Meliá Hotel, Yangon, Myanmar
GMBC Christmas Party

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AHK Myanmar
Martin Klose
Uniteam Building, 6 floor, 84 Pan Hlaing Street Sanchaung TS
11111 Yangon
Myanmar

+95 9 4506 293 64
martin.klose@myanmar.ahk.de