PwC MyanmarWeekly Business Intelligence

Issue 10918 May 2018

www.pwc.com/mm

PwC | May 2018

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PwC | May 2018

1. Weekly Key Financial & Business News

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PwC | May 2018

Weekly Key Financial & Business NewsHeadlines

Ministry selects winners of rental power tender

Low-cost housing plan sends prices soaring for squatters’ ID cards

JICA's Dawei SEZ plan under fire for excluding site-wide assessment

UK preschool franchise set to expand further in Myanmar

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AirAsia calls off talks to launch airline in Myanmar

PwC | May 2018

Weekly Key Financial & Business NewsHeadlines

Minimum wage a step forward for democracy and sustainable development

Government partners with fintech firms to enable use of livestock as collateral

Huawei sees “abundant” opportunities in Asia Pacific

Myanmar likely to open more sectors to FDI

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Economic prospects for Myanmar favorable, but downside risks intensified: World Bank

PwC | May 2018 6

Low-cost housing plan sends prices soaring for squatters’ ID cards

A black market has emerged for the smart cardsthat are intended to give Yangon squatterspriority for buying low-cost government housing.IDENTITY CARDS issued to thousands of Yangonsquatters under a move to give them priority forresettlement in a low-cost housing project arebeing sold illegally, with prices more than triplingover the past year, Frontier has learned.The Yangon Region government, which maderesettling the city’s estimated 430,000 squatters atop issue after taking office two years ago,completed issuing the smart ID cards late lastyear after conducting a population survey ofsquatting communities.A total of 167,738 of the ID cards have been issuedby a taskforce established by the regionalgovernment and many squatters are excited bythe prospect of using them to be able to move intopermanent housing.However, a thriving black market has developedin the sale of the cards, in some cases driven byunscrupulous investors who are flouting the law.A resident of one of Yangon’s biggest squattingcommunities, in outer northwestern Hlaing

Tharyar Township, said he had begun buying thecards on behalf of a well-known localbusinessman last year.Real estate agent Ko Myo Thu said he had so farbought about 100 of the cards for thebusinessman at Hlaing Tharyar, where 25,000 ofthe documents had been issued by May last year.Myo Thu said the first card he bought for thebusinessman, in March last year, cost K600,000.“Now the price is about K2 million,” he toldFrontier in a telephone interview in early April.Myo Thu said when he was first asked by thebusinessman early last year to buy the cards, hehad warned it was not a good idea.“[The businessman] said he is taking a calculatedrisk and is still buying more cards,” he toldFrontier, adding that the businessman isconfident of making a good profit when theauthorities begin selling the low-cost housing.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/low-cost-housing-plan-sends-prices-soaring-for-squatters-id-cards

NewspapersFrontier Myanmar

14 May 2018

PwC | May 2018 7

Ministry selects winners of rental power tender

YANGON – The Ministry of Electricity andEnergy has selected the winners of a tender forrental power projects in Mandalay Region, anofficial says.Although the winners have not been formallyannounced, U Han Zaw, chief engineer at theElectric Power Generation Enterprise, toldFrontier that the tender evaluation committeehad already made a decision.He confirmed that VPower of Hong Kong hasbeen selected to operate a plant at Myingyan,while National Infrastructure Holding Companywill run a plant at nearby Kyaukse. Both will befuelled by natural gas from the Shwe field.“We are in process of issuing the letters of awardand signing the [power purchasing agreements],”Han Zaw said today.He added the plants should be ready by nextsummer. “We don’t have any power plant projects[coming online] in 2019 and 2020. So theseprojects must be in operation when next summercomes,” he said.The tender was announced on January 5, with aninitial February 19 deadline that was pushed back

to March 6.The plants will replace rental power projectsoperated by British firm Aggreko (95 megawatts)and APR Energy (102MW) from the UnitedStates. In place since 2014, these contracts wereshorter – from 12 to 18 months – and havealready been extended several times.A senior official at the NIHC office in Yangondeclined to comment.However, VPower announced on May 7 that it hadreceived a letter of acceptance from EPGE “whichsets out the mutual understandings on key termsfor the definitive agreement in respect of thepurchase of electricity”.The company said it expects its 90MW plant tocome online in February 2019. VPower alreadyholds three power rental contracts in Myanmar,totalling more than 220MW.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/ministry-selects-winners-of-rental-power-tender

NewspapersFrontier Myanmar

14 May 2018

PwC | May 2018 8

JICA's Dawei SEZ plan under fire for excluding site-wide assessment

Experts warn that implementation of the Japan-supported master plan for Dawei SpecialEconomic Zone (SEZ) without a legally-requiredsite-wide assessment would be “unlawful” andthat transparency and meaningful publicparticipation are necessary to determine whobenefits from those plans before moving ahead.The master plan for Dawei SEZ, drafted by JapanInternational Cooperation Agency (JICA), will bereleased towards the end of May.U Myint San, vice president of Dawei SEZmanagement committee (DSMC), told TheMyanmar Times that JICA has been drafting themaster plan since 2017. The master plan will befinalised by late May and will cover all the phasesof the zone. The plan will include three phases:now until 2030, 2030-40 and 2040-50.Japan proposes prioritising infrastructure andconnectivity for Phase 1, including roads, powersupply projects and deep-sea port. The DSMC willdeliberate JICA’s draft, make changes and submitthe finalised blueprint to the national-level SEZCentral Committee, which is chaired by VicePresident U Henry Van Thio.

“The master plan will be released at the end ofMay. We will then exactly know the master plan.We will discuss it and look at how we canimplement the projects proposed by the plan,” UMyint San said.The fact that there is no site-wide environmentalimpact assessment (EIA) conducted beforedrafting the master plan has drawn severecriticisms from academics, civil societyorganisations and communities, all of whom urgethat the project should not be greenlighted beforesuch an assessment is commissioned.Site-wide assessment necessaryWorld Wildlife Fund (WWF) told The MyanmarTimes that proper consultations need to be“carried out on the master plan with affectedcommunities and concerned stakeholders”, andthat a site-wide assessment should be done to“ensure that cumulative impacts are captured”.

Source: Myanmar Timeshttps://www.mmtimes.com/news/jicas-dawei-sez-plan-under-fire-excluding-site-wide-assessment.html

NewspapersMyanmar Times

15 May 2018

PwC | May 2018 9

UK preschool franchise set to expand further in Myanmar

A franchise of a UK-based preschool serviceprovider located in northern Yangon has reachedits first anniversary and is set to expand todowntown Yangon as well as Mandalay. Withaspiring families in the country looking for qualityeducation, demand is on the rise.Before the government opened up the educationsector to international investments last month,Surrey-headquartered Linguaphone Group, whichhas licensed partners in over 60 countries, hasalready established a presence in Myanmar morethan a year ago.In 2016, Myanmar-based EduWorld Co Ltdsigned an English school franchise agreementwith Linguaphone Group, who owned the Pingu’sEnglish brand. Since then, the first school in thecountry was launched in February 2017, located inBahan township, Yangon.The Myanmar Times spoke to Bryan Yen,EduWorld CEO, about his school and upcomingexpansion plans.“English education is very important forMyanmar’s future. With Myanmar opening up itsdoors to the world, there is a growing demand

from parents for high-quality Englishprogrammes for their children,” he explained,highlighting that there is market demand for aninternational curriculum and well-establishlearning methodology.The Bahan school provides kindergartencurriculum for kids between two and six years-old, English Language training (ELT) for thosebetween one year and eight months and 10 yearsold as well as summer programmes.As of early May, he estimated that the school hasrecruited around 120 students over the past 12months. There are plans to set up another branchin downtown Yangon and one in Mandalay.Efforts to develop this project were well-supported by the UK’s Department forInternational Trade (DIT) in Myanmar, whichruns the “Education is GREAT” campaign. aniesand promote the Pingu brand in the city.

Source: Myanmar Timeshttps://www.mmtimes.com/news/uk-preschool-franchise-set-expand-further-myanmar.html

NewspapersMyanmar Times

16 May 2018

PwC | May 2018 10

AirAsia calls off talks to launch airline in Myanmar

Talks between Malaysia-based AirAsia Bhd and apartner to open a budget airline in Myanmar havecome to a halt. AirAsia’s chief said that the airlinehas decided “not to go into Myanmar just yet”.The latest development comes after less than twomonths when AirAsia revealed it was in talks witha potential partner to start an airline serving thecountry. Had the venture been successful, themove would have enabled the budget carrier tocover up to 95 percent of the Southeast Asiaaviation market. AirAsia CEO Tony Fernandestold Reuters in March that he had met with apotential “well-respected” partner with a “goodairline” in Sydney and was undergoing thenecessary processes towards forming the newairline. He added that the airline would not be abig one due to the current airport infrastructure,but said Myanmar’s large population promisesfurther potential for growth over time. AirAsia didnot disclose who the potential partner is andwhich airline that person owns.According to Reuters, Mr Fernandes toldreporters at an AirAsia event in Bangkok, “Thenegotiations have stopped. We are not moving

ahead with Myanmar at the moment… We mightrevisit that but we’ve decided not to go intoMyanmar just yet.”The airline is heading into what many see as astormy period.On May 13, the AirAsia chief publicly apologisedfor having appeared to back former Malaysianleader Najib Razak and Barisan Nasional (BN) inthe run-up to the General Election, saying that hehad “buckled” under pressure from the previousadministration. Najib Razak lost the election toveteran politician Mahathir Mohamad, 92.Before the votes, Mr Fernandes had appeared in avideo on Youtube, crediting the government forAirAsia’s success. He also painted his planes inBN colours. In addition, Najib Razak postedpictures of himself boarding an AirAsia aircraftfrom Kota Kinabalu to Kuala Lumpur, with theplane sported the livery “Hebatkan Negaraku”(Make My Country Greater), which was BN’scampaign slogan.Source: Myanmar Timeshttps://www.mmtimes.com/news/airasia-calls-talks-launch-airline-myanmar.html

NewspapersMyanmar Times

17 May 2018

PwC | May 2018 11

Government partners with fintech firms to enable use of livestock as collateral

InfoCorp Technologies, a Singapore-registeredfintech company and RGK+Z&A Group willpartner with the Livestock Breeding andVeterinary Department of the Ministry ofAgriculture, Livestock and Irrigation andMyanma Insurance, an arm of the Ministry ofPlanning and Finance, to carry out a joint pilotproject to perform Tamper-Proof LivestockIdentification.The agreement, which was signed yesterday, willinvolve identification and tagging of cows andbuffalos for the purposes of building an officiallivestock registry, which will in turn, enablelivestock to be used as collateral in the loanapplication process.“This joint partnership will create a financialecosystem that solves the risk of livestockinsurance and potentially transforms the marketinto a force for development by enabling the useof livestock as collaterals,” said Mr. Roy Lai,Founder and CEO of InfoCorp Technologies.InfoCorp Technologies will implement the servicethrough Sentinel Chain, which it claims is theworld’s first platform to accept the use of livestock

as collateral. Through the platform, InfoCorp isalso aiming to bring ordinary financial servicessuch as banking, loans and insurance to lessdeveloped parts of the country to resolvechallenges of small farmers in running theirbusinesses without banking facilities.The project will be carried out in selected areas ofMyanmar, including Yangon, Mandalay and NayPyi Taw over a period of three months, afterwhich Myanma Insurance will also be able tospecify the premium rate of insurance for eachcow and buffalo.This platform becomes a utility for financialinstitutions to leverage on encrypted data toincrease asset base and serve the loan demands soneeded by the rural farming communities.Dr Sandar Oo, Managing Director of MyanmaInsurance, agreed that the move will contribute tothe improvement of financial inclusion inMyanmar by leveraging on technology.Source: Myanmar Timeshttps://www.mmtimes.com/news/government-partners-fintech-firms-enable-use-livestock-collateral.html

NewspapersMyanmar Times

17 May 2018

PwC | May 2018 12

Minimum wage a step forward for democracy and sustainable development

This week the Myanmar government hasannounced a new daily minimum wage of K4,800for workers. Arguments will be heard that thenew rate is too high or too low from employersand workers alike. But we should not lose sight ofthe positive impact the minimum wage is alreadyhaving on the reduction of poverty and inequalityon one hand, and the strengthening of democracyand social dialogue on the other.Myanmar’s introduction of a minimum wage in2015 was an early landmark for labour marketreforms. Although Myanmar has not ratified theInternational Labour Organization’s MinimumWage Convention 131, its Minimum Wage Lawlargely reflects its requirements. Foremostamong these is that the minimum wage is setthrough an open and transparent process oftripartite social dialogue between thegovernment, representative employers andworkers’ organisations.Over the past year, a tripartite National MinimumWage Committee has undertaken nationwideconsultations to review the level set in 2015,resulting in the announcement this week.

Setting the minimum wage requires a complexbalance of many factors, including the needs ofthe workers and their families, promotingproductive and sustainable enterprises, attaininghigh levels of employment, and ensuringcompetitiveness in the regional economy. Theminimum wage is a single tool for multiple andseemingly contradictory objectives.But in the two years since the minimum wage wasfirst introduced, ILO research suggests it isalready producing some early but positive resultsin terms of reducing poverty and inequality.Firstly, it is important to remember the minimumwage is a minimum; a marker against whichemployers and workers can agree higher wages onthe basis of their skills and productivity. Alreadywe can see the median wage, the value thatdivides the workers by two groups of 50 percent,has increased from K3,500 to K4,000.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/minimum-wage-a-step-forward-for-democracy-and-sustainable-development

NewspapersFrontier Myanmar

16 May 2018

PwC | May 2018 13

Huawei sees “abundant” opportunities in Asia Pacific

Giventhe rapid growth of internet users at 14 percent CAGR and e-Commerce at 32per cent CAGR,Huawei Technologies Co, a Chinese technologygiant, sees abundant opportunities for internetaccess and cloud data centre development in theregion, according to Qiu Lei, vice president ofmarketing and product solutions salesdepartment at Huawei Enterprise BusinessGroup.“In this digital economy era, Asia Pacific is one ofthe most promising regions, resulting in US$300billion worth of economy growth in the next tenyears,” he said at the Huawei Asia Pacific ISPSummit 2018 held in Hong Kong last week.“In 2018, our enterprise business will continue toenhance our portfolio in domains like cloud, bigdata, campus networks, data centers, and IoT.”With full-stack solutions across devices,networks, and the cloud, the firm works withpartners to meet the customers’ requirements offast service deployment, elastic resource release,big data analytics, ultra- broadband DCI and soon to help ISPs conduct digital transformationand remain competitive in the digital era, said Lei.

“Last year, we kept strategic focus on creatingvalue for our customers. Our sales revenuereached around $92.6 billionwith 15.7 per centyear on year growth. Among that, around 10percent contribution comes from EBG with morethan 35per cent growth, 20per cent of it is fromISP industry overseas. Asia Pacific region plays avery important role,” he said.Lei said the firm’s achievements largely relied onits continuous investment in research anddevelopment, which has approximately 80,000employees, comprising 45 per cent of its totalworkforce. The firm's R&D expenditures totaledaround CNY90 billion last year, accounting foraround 15 per cent of total revenue.“We have spent more than CNY400 billion onR&D over the past decade. Total number ofpatents granted to Huawei is 74,307,” he said.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13941

NewspapersEleven Myanmar

17 May 2018

PwC | May 2018 14

Myanmar likely to open more sectors to FDI

Thant Sin Lwin (left) and Marlar Myo Nyunt, twodeputy director-generals at the Directorate ofInvestment and Company Administration, at arecent press conference in Yangon(Photo- KhineKyaw, Myanmar ElevenA SURGE in interest among global playersfollowing the liberalisation of Myanmar’seducation sector to foreign investors hasmotivated the authorities to continue opening upthe economy in other restricted sectors.Thant Sin Lwin, deputy director general at theDirectorate of Investment and CompanyAdministration (DICA), said at a press conferenceon Tuesday that Myanmar InvestmentCommission (MIC) has been keeping an eye onthe latest developments in the investmentscenario to decide which sector should beliberalised first. “We are trying to catch up withour neighbours. We may liberalise the insurancesector in our next move, as many insurancecompanies have visited us to discuss aboutexpansion of their services and products inMyanmar,” he said. “But honestly, we have notdecided anything yet, though insurance is a sector

with high potential for liberalisation. We alsoneed to take China’s Belt and Road initiative intoserious consideration.”According to the statistics, 24 foreign insurancecompanies has established their representativeoffices in Myanmar while 12 private local firmsand state-owned Myanma Insurance Enterpriseare offering a range of products to customers.According to Thant Sin Lwin, investment bossesreceive insurance companies that are willing to dobusiness in Myanmar very often. Last week,senior executives at China Export & CreditInsurance Corporation visited Aung NaingOo,secretary of MIC and director general at DICA, inYangon to discuss about their investment plans.He seems pretty satisfied with the outcome ofliberalising the education sector. Manymultinational players have visited the DICA officeto discuss about their potential investments in theestablishment of private international schools inMyanmar, he said.Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13942

NewspapersEleven Myanmar

17 May 2018

PwC | May 2018 15

Economic prospects for Myanmar favorable, but downside risks intensified: World Bank

While the economic outlook for Myanmar islooking “favorable,” with growth projected to riseto 6.8 percent in 2018-19 from 6.4pc before, therisks to those prospects have “intensified,”according to the World Bank’s MyanmarEconomic Monitor (MEM), which was released inYangon yesterday.Lower tourism arrivals resulting from the ongoingRakhine crisis could weaken tourism spendingand demand for related services such ashospitality and transport, feeding into a broaderslow down in the economy, for one.Meanwhile, investor concerns about thereputational risk of operating in Myanmar as wellas perceptions of a weakening in the pace ofeconomic reforms could lead to declines in foreigndirect investments. (FDI). This would come at atime when the funds are needed to stem a furtherwidening of the current account deficit.Fewer investments could also result in aslowdown in manufacturing and agriculture, thetwo sectors which drove a faster pace of growth inthe previous fiscal year.Policy priorities

However, a significant slowdown in growth isunlikely if the policies and government toolsinstalled are deployed wisely. Among the policiesin place is the upcoming Myanmar SustainableDevelopment Plan (MSDP), a draft of which isnow being reviewed by the government.The MSDP aims to translate the government’s 12-point economic plan and sector plans into “a clearset of policy priorities and has been welcomed asa significant step forward,” according to theMEM.“The MSDP, which lays out a comprehensive andprioritised policy reform agenda, holds thepromise of offering the much-needed unifyingand coherent roadmap for reforms for thecountry,” the report said.The other priority for Myanmar is to break out ofthe cycle of low revenue and low public spending.At 15pc of GDP, Myanmar has among the lowesttax collection as a share of GDP in the world.Source: Myanmar Timeshttps://www.mmtimes.com/news/economic-prospects-myanmar-favorable-downside-risks-intensified-world-bank.html

NewspapersMyanmar Times

18 May 2018

PwC | May 2018

2. Weekly Key Policy News

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PwC | May 2018

Weekly Key Policy NewsHeadlines

Myanmar opens up for foreign retailers and wholesalers

Yangon government to set benchmark property price for 2018-19

Transport of containerised goods permitted in Yangon during the day

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Myanmar Sustainable Development Plan drafted, govt feedback sought

Yangon to reform supervisory structure for industrial zones as concerns mount

PwC | May 2018 18

Myanmar opens up for foreign retailers and wholesalers

Foreign businesses and joint ventures are nowallowed to carry out businesses in the retail andwholesale sector, according to the latest directivefrom the commerce ministry. Leading businessgroups hailed the move as a right step towardsattracting inwards investments for Myanmar.The ministry issued the Directive 25/2018 on May9, authorising 100 percent foreign-ownedcompanies as well as joint ventures betweeninternational and domestic investors to carry outretail and wholesale businesses. The trade policyis essential for reforming the economy of thecountry.The liberalisation measure, the directiveexplained, was to foster competition in the sectorto provide more options, cheaper options andbetter options for consumers across the country.This will bring in technology and quality productsfor the sector, facilitate growth of small andmedium-sized enterprises (SMEs), attract moreforeign investments and create jobs. It will alsohelp “prevent unfair competitions among thedistributors, who are exploiting the consumers.”The new measure allows retail and wholesale

trading of all types of commodities which aredomestically manufactured or imported fromabroad, except those prohibited by law. Domesticcompanies, foreign firms and joint ventures areall permitted to operate.Retail and wholesale trade can be conducted inany townships in all states and regions, based onrelevant regulations.However, foreign businesses and JVs are notallowed to operate mini-markets, conveniencestores and any retail distribution where the floorarea is smaller than 929m2.All kinds of companies in the trading businessmust pay import and distribution taxes.Minimum capitalThe minimum capital requirements for 100pcforeign-owned firms to operate in retail andwholesale industries are US$3 million and $5million respectively.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-opens-foreign-retailers-and-wholesalers.html

NewspapersMyanmar Times

14 May 2018

PwC | May 2018 19

Yangon government to set benchmark property price for 2018-19

The Yangon Regional Government will this monthbegin conducting property valuations to set anofficial benchmark price for properties in Yangon, said U Myint Thaung, Regional Minister forPlanning and Finance.“We will value the properties based on demandand supply in the various townships, wards andstreets of Yangon Region at the beginning of thefiscal year. This is how we set the market price forproperty in 2017-18,” he said.Setting an official market price for property willmake it easier for buyers and sellers to determinethe amount of stamp duties and other propertytaxes to be paid.U Myint Thaung was responding to questionsraised during a recent regional parliamentsession.He added that the Yangon government isamending and refining its methods andprocedures for accurate valuations.He said each township’s tax office is responsiblefor collecting data and information to helpcalculate the current market price of its realestate. The valuation process is discussed with

representatives from 11 departments, includingthe Yangon City Development Committee,Internal Revenue Department, Land RecordsDepartment and Valuation Board in Yangon. Thefinal valuations are then submitted to the YangonRegional Government.The related townships Tax offices and the realestate groups of Yangon Region collect theinformation about the current prices of realestate. Then, they discussed with therepresentatives of 11 departments includingYCDC, Internal Revenue Department and LandRecords Departments who are also the membersof Price Valuation Board for land, buildings,factories and workshops in Yangon. They set theproperties prices by submitting to RegionalGovernment, said Minister U Myint Thaung.“We set the prices once in a year. Parliament thenapproves the appropriate tax rates for theproperties,” he said.Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-government-set-benchmark-property-price-2018-19.html

NewspapersMyanmar Times

15 May 2018

PwC | May 2018 20

Transport of containerised goods permitted in Yangon during the day

Transport of selected containerised goods willnow be permitted within the city during the day,U Soe Naing, secretary of Myanmar ContainerTrucks Association, said yesterday.The decision breaks a 2-year-long regulation bythe Yangon Region Government prohibitingcontainer trucks from entering the city during theday.It could also significantly improve trade as well asdelivery times within the city.Now though, trucks transporting approvedcontainerised goods will be allowed to movethrough the city.Goods scheduled for exports will be brought tothe container depot in front of Insein SteelFactory on Bayintnaung Road. Container pickupand transport to the ports west of Yangon willbegin at 11am.Meanwhile, imported goods will be assembled ata holding area near the Asia World port, wherepickup will begin at 1pm.The trucks will be escorted by traffic police whowill help ensure their smooth and safe passagethrough the congested roads of Yangon city.

The arrangement was agreed upon by the YangonRegion Government, traffic police, MyanmarContainer trucks Association and traders. It willbe carried out over a one-week testing period.If successful, the present trucking schedule willcontinue going forward, said U Soe Naing.It will also ease an existing distribution bottleneckthat is slowing down delivery of goods andchalking up unnecessary costs for shippers.This is because goods manufactured at ThilawaSpecial Economic Zone and Yangon’s otherindustrial zones, which are located in the east, canmove more quickly to port. Meanwhile, importedgoods will also be delivered to shops and homesmuch sooner.

Source: Myanmar Timeshttps://www.mmtimes.com/news/transport-containerised-goods-permitted-yangon-during-day.html

NewspapersMyanmar Times

16 May 2018

PwC | May 2018 21

Myanmar Sustainable Development Plan drafted, govt feedback sought

The Ministry of Planning and Finance (MOPF) isin the process of gathering comments from othergovernment ministries for the purpose of draftingthe Myanmar Sustainable Development Plan(MSDP) and incorporate relevant feedback intothe plan.“The MOPF cannot work alone to improve theMSDP as it involves the entire government. Assuch, we are taking time to gather feedback fromthe other ministries before amending the draft,”U Htun Htun Naing, permanent secretary at theMOPF, told The Myanmar Times.Released in February, the objective of the MSDPis to connect and align the country’s numerouspolicies and institutions for the purpose ofgenerating implementable solutions to achieve“genuine, inclusive and transformationaleconomic growth.”Encompassing five goals, 28 strategies and 238action plans, the MSDP will also align with theUnited Nations’ Sustainable Development Goals,the 12 Point Economic Policy of the Union ofMyanmar and ASEAN Economic Community.The goals include economic stability as well as job

creation and private sector-led growth.These will prioritise establishing appropriatefiscal, monetary and exchange rate policy,improving Myanmar’s balance of payments andmaintaining inflation at an appropriate level.In addition, strategies include the mobilisation ofall necessary sources of development finance,strengthening public financial managementcapacity and enhancing the efficiency andcompetitiveness of the State-owned Enterprises.The final plan will be released after incorporatingthe ministries’ feedback, after which all publicprojects and plans will also be carried out inaccordance with the MSDP’s goals. However, adate has not been announced.“When the MSDP is released and theimplementing process takes place, it will drawmore foreign investors to help develop the privatesector,” U Htun Htun Naing said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-sustainable-development-plan-drafted-govt-feedback-sought.html

NewspapersMyanmar Times

16 May 2018

PwC | May 2018 22

Yangon to reform supervisory structure for industrial zones as concerns mount

The Yangon Regional Government is taking stepsto form a central supervisory committee tooversee the development of Yangon’s industrialzones, moving from the current supervisorystructure of having one committee for each zone.The move comes on the back of a slew of newindustrial projects announced by the governmentthis year.“We will restructure the current industrial zonecommittee set up and focus on forming onecentralised supervisory committee for all theindustrial zones. The restructuring process willbegin as a test project at South Dagon industrialzone,” said Daw Nilar Kyaw, Minister ofElectricity, Industry and Transport andCommunication in Yangon, in parliamentWednesday. Daw Nilar Kyaw was responding toquestions raised on the structure of thecommittees by U Kyaw Kyaw Maung, MP fromEast Dagon Myothit Township. Developed in the1990’s, the objective of having an industrial zoneis to provide firms such as manufacturers withbetter access to infrastructure and electricity.There are currently 29 industrial zones in Yangon.

However, there are no official regulationsgoverning such zones. Each industrial zone isgoverned by its own supervisory committee sorules and standards differ across each zone.In East Dagon industrial zone, which spans over800 acres, there are 361 plants and over 23,000employees but only five committee members tooversee its development. “Five committeemembers to oversee 23,000 workers is far toofew,” said U Kyaw Kyaw Maung.As a result, many of the zones are poorly managedand unproductive. Meanwhile, access to water,electricity and waste disposal services is eitherlacking or inefficient.It is also not uncommon for owners to sell plots ofland within the zones. “Some owners purchasethe land to speculate on price and not for businesspurposes. This has deterred genuine investorsfrom buying the land, as prices are sometimes toohigh.Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-reform-supervisory-structure-industrial-zones-concerns-mount.html

NewspapersMyanmar Times

18 May 2018

PwC | May 2018

3. Weekly Investment News

23

PwC | May 2018

Weekly Key Investment NewsHeadlines

Germans to purchase up to 50 tonnes of Myanmar tea leaves

Myanmar: Diamond Dragon, Fraser & Neave, Starbucks plan investments

Three companies set to seek listing on fledgling Yangon bourse

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TPG said to pursue deal to create Myanmar’s biggest tower owner

SCN secures Green Earth stake to go solar in Myanmar

PwC | May 2018 25

Germans to purchase up to 50 tonnes of Myanmar tea leaves

A German company has offered to purchasebetween 20 tonnes and 50 tonnes of tea leavesproduced in Myanmar over the next two years, UKyaw Thiha, chair of the Myanmar Tea Cluster,said on Sunday.The Myanmar Tea Cluster is part of the MyanmarFruit and Vegetable Producers and ExportersAssociation.“A few days ago, ChaDo, a German company,approached us. This company buys tea leavesfrom various countries and redistributes them.They’re now interested in Myanmar tea leaves,” UKyaw Thiha said.Plans will now be made to expand production sothat the quota is met. “We can easily manage 20tonnes of tea leaves. But we have to expand theland area to produce 50 tonnes. Fortunately, theexisting tea plantation land is also suitable toaccommodate the expansion,” said U Kyaw Thiha.“We will have to gather the farmers to expand.The company only wants young tea leave andglobally-recognised certifications. We will have tofulfill those requirements. We will also make surethe process is organised and viable for the local

farmers,” he added.ChaDo will purchase the tea leaves at $7,000 pertonne but will pay up to $9,000 for higher qualitytea leaves.The offer represents a good opportunity forMyanmar to showcase the quality of its tea in aninternational market, potentially drawing moreinterest and growth to the industry.It is also not the first time Germany has offered tobuy Myanmar tea. In 2016, Premium TeaCompany Tee Gschwendner, based inMeckenheim, Germany, bought 1.5 tonnes ofMyanmar green tea for the very first time.The company was the first German importer oftea produced at a community-based model factoryin Sikya Inn village, Pindaya township, ShanState, as part of a bigger project to support smalland medium enterprises by the Myanmar-Germany Private Sector Development arm of GIZ.

Source: Myanmar Timeshttps://www.mmtimes.com/news/germans-purchase-50-tonnes-myanmar-tea-leaves.html

NewspapersMyanmar Times

16 May 2018

PwC | May 2018 26

Myanmar: Diamond Dragon, Fraser & Neave, Starbucks plan investments

The Myanmar Investment Commission hasapproved a spate of investments from DiamondDragon Co Ltd, Singapore’s Fraser & Neave andUS coffee chain Starbucks. Diamond Dragon toinvest over $38m in edible oil, plastic facilityDiamond Dragon Co Ltd, which is intoproduction, import and distribution of edible oil,has received approval from the MyanmarInvestment Commissin to set up a newmanufacturing plant for K34.2 billion ($25.64million), according to an official from thedepartment. The company, which has a plant inHlaing Tharyar, Yangon, is into production ofpeanut oil and marketing under the brand, DDpeanut oil. Diamond Dragon is also planning toset up a plant to produce plastic products at SouthDagon Myothit township in Yangon. Themanufacturing of the plastic products has recentlyreceived the approval to invest K16.7 billion($12.5 million). Singapore F&N JV, EmeraldBrewery to invest $65m in beer productionSingapore’s Fraser & Neave, the previousshareholder of Myanmar Brewery, has securedapproval to invest $65 million in the beer

production and distribution in the local market.In December 2017, Fraser and Neave (F&NI)announced the joint venture with Than Lwin AyeYar Industrial Production & Construction Co Ltd,to explore beer production in Myanmar. A newcompany, Emerald Brewery Myanmar Ltd, willsee F&NI take 49 per cent stake and Than LwinAye Yar Industrial taking a 51 per cent stake. Thebeer manufacturing facility will be at Hlegutownship, Yangon. The construction is expectedto be completed by 2020. Starbucks coffee chaingets approval for operations US coffee chainStarbucks is set to open its first outlet in Yangonafter it received approval to invest in Myanmar.The coffeehouse company, which has more than24,000 outlets across 75 markets, will invest as awholly foreign owned company under the nameCoffee Concepts (Myanmar).

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmars-diamond-dragon-singapore-fnis-jv-and-american-firm-starbucks-coffee-gets-approval-to-invest-97383/

NewspapersDeal Street Asia

16 May 2018

PwC | May 2018 27

Three companies set to seek listing on fledgling Yangon bourse

Yangon Stock Exchange (YSX), which was set uptwo years ago in the frontier market and currentlyhas five companies listed, is expecting three morefirms to join the bourse in a year, according toHtay Chun, commission member of the Securitiesand Exchange Commission of Myanmar. Thethree firms which are poised to join the bourseinclude engineering company Great Hor Kham,Myanmar Agro Exchange Public Limited, andlogistics player Ever Flow River. These firms areworking on the listing process with securitiescompanies and can join the bourse in less than ayear, said Chun. The two-year-old exchange hasfive listed companies including First MyanmarInvestment Co Ltd, Myanmar Thilawa SEZHoldings, TMH Co Ltd, Myanmar Citizens Bank,and First Private Bank Ltd. To attract morecompanies to the bourses, the Myanmar state hasset up a special task force, supported by JICA,that will offer legal and accounting services tofirms keen to seek a listing. YSX: The journey sofar Looking back at the past two years, YSX hasmanaged to trade about 5.2 million shares for avalue of K93 billion ($68.5 million). The bourse

suffers from weak liquidity on account of poortrading activity and lack of participation fromstrategic investors. The exchange, owned byMyanmar Economic Bank, Daiwa Institute ofResearch and Japan Exchange Group, is facing adrop in share prices and trading volume.The exchange, owned by Myanmar EconomicBank, Daiwa Institute of Research and JapanExchange Group, is facing a drop in share pricesand trading volume. Besides, it has seennegligible interest from local public companies.Out of the 59 public companies officially approvedby the Directorate of Investment and CompanyAdministration to sell shares to public, only twohave shown interest to join the bourse, Dr MaungMaung Thein, former deputy minister of Financetold this portal. Looking at the macro picture,2017 saw the trading value fall to K22.87 billionfrom K112 billion in 2016.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/three-companies-set-to-seek-listing-on-fledgling-yangon-bourse-91726/

NewspapersDeal Street Asia

16 May 2018

PwC | May 2018 28

TPG said to pursue deal to create Myanmar’s biggest tower owner

TPG is pursuing a deal to create the biggestindependent owner of telecom towers inMyanmar, people with knowledge of the mattersaid, as mobile-phone usage soars in one of theworld’s fastest-growing economies. Apollo TowersMyanmar Ltd., which is backed by the U.S.private equity firm, is seeking to merge with rivalPan Asia Majestic Eagle Ltd., according to thepeople. TPG plans to become the majorityshareholder of any combined entity, which wouldhave more than 3,000 towers and an enterprisevalue of at least $700 million, the people said,asking not to be identified because theinformation is private. TPG teamed up withformer LightSquared Inc. Chief Executive OfficerSanjiv Ahuja to form Apollo Towers in 2014, withits growth-equity unit investing about $40million, Bloomberg News reported at the time.The deal was the first foray in Myanmar by a big-name U.S. private equity firm since the countryemerged from military rule. Since then, theairwaves have been opened to foreign investors,and now almost everyone in the Southeast Asiancountry has a phone with internet service. A

combination of Apollo Towers and Pan Asiawould become the country’s biggest independentowner of wireless infrastructure with more towersthan Irrawaddy Green Towers Ltd., the peoplesaid. Any merger would add to the $78.6 billion inprivate-equity deals announced this year thatinvolve Asian targets, data compiled byBloomberg show. There’s no certainty thedeliberations will lead to a transaction, and anydeal would need regulatory approval, according tothe people.Better Coverage TPG declined to comment in anemailed statement. A person who answered thephone at Apollo Towers’s office said nobody wasimmediately available to comment. An official atPan Asia didn’t immediately answer a phone calland messages seeking comment. MyanmarInvestments International Ltd., which trades onLondon’s AIM venue for small-cap listings, is alsoan investor in Apollo Towers, according to itswebsite.Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/tpg-myanmar-tower-owner-98055/

NewspapersDeal Street Asia

17 May 2018

PwC | May 2018 29

SCN secures Green Earth stake to go solar in Myanmar

SET-listed Scan Inter Plc (SCN), a natural gastrader and operator of compressed natural gas(CNG) stations, has purchased shares of GreenEarth Power Thailand Co to operate a solar powerplant in Myanmar.SCN submitted a letter to the Stock Exchange ofThailand saying it had resolved to approveinvestment in the power plant project in MinbuCity, Myanmar, with installed capacity of 220megawatts, making it the largest solar powerplant in Southeast Asia. The project is valued at10 billion baht.SCN entered into an agreement to purchase 30%of issued shares in Green Earth Power Thailandfor 1.235 billion baht.Littee Kitpipit, SCN's managing director, said theproject is divided into four phases, withcompletion of construction and power generationin the first phase totalling 50MW expected by2019.He forecasts this project will have an internal rateof return of over 10%. "This overseas investmentis in a line with SCN's strategy of creating abusiness unit that generate recurring, sustainable

income," said Mr Littee. "The solar power plant isalso one of SCN's targeted businesses, with a co-development and co-construction model targeted.This milestone for SCN will make it the largestclean-energy power generator in Southeast Asia."SCN's business plan for industrial compressednatural gas (CNG) targets sales growth on theback of an expanding customer base in theindustrial sector, he said.SCN operates CNG filling stations, expected toincrease from seven to 13 by year-end. "Wetargets sales of 400,000 kilograms per day andwill generate revenue from three Bangchak petrolstations," said Mr Littee. Regarding progress onproduction and distribution for CNG compositetanks called N4, he said SCN has hired SojitzCorporation, a leading trader in Japan, to be thesole distributor.

Source: Bangkok Posthttps://www.bangkokpost.com/business/news/1465302/scn-secures-green-earth-stake-to-go-solar-in-myanmar

NewspapersBangkok Post

17 May 2018

PwC | May 2018

3. Weekly New Tenders

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PwC | May 2018

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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Ministry of Construction: Expression of Interest for Yangon Expressway PPP Project, Closing Date 29 June 2018 (Inviting Sponsors)

Thilawa Property Development Limited: Investment, Design, Development and Operation of a New Hospital, Closing Date 06 July 2018

PwC | May 2018

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: Social Safeguards Due Diligence for Southeast Asia Projects - Social Safeguards Specialist, Closing Date 22 May 2018 (Individual)

ADB: Environmental Safeguards Due Diligence for Southeast Asia Projects - International Environmental Specialist, Closing Date 22 May 2018 (Individual)

WB: Research: Business Case for Gender Lens-Investing in Private Equity in Emerging Markets, Closing Date 30 May 2018 (Individual)

CoST Organization : Expression of Interest for consultant to conduct study on how to improve infrastructure transparency in Myanmar, Closing Date 31 May 2018

PwC | May 2018

4. MIC Permitted Projects

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PwC | May 2018

MIC Permitted Projects (Meeting 6, 2018)

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No. Name of Company Type of Investment Form of Investment

1 ECTerra Agriculture Co., Ltd

Cultivation, production and sales of agricultural commodities including, rice, corn, beans, pulses, sugar cane, oilseed crops and other cash crops

Joint Venture Investment

Source: DICA

PwC | May 2018

5. Upcoming Events

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PwC | May 2018

Upcoming Events (June 2018) List

Date Location Name of Event Sector Price Focus Points

06-08 June 2018 YangonFood and Hotel Myanmar

Hospitality Free

“This event shows products like food and beverages, tea and coffee, wine and spirits, food servicing, food service equipment, kitchen equipment and supplies, hospitality equipment and supplies, spa services, lifestyle services, wellness services, hospitality services and technologies.”

16-17 June 2018 YangonInternational Education Fair Myanmar

Education Free

“This event showcases products like Universities and colleges, knowledge Economy, Primary and secondary schools, lifelong learning, vocational education, adult education, Informal education, Transfer of knowledge etc. in the Education & Training industry.”

26-27 June 2018 YangonMyanmar Banking and Finance

Finance Free

“This is the strategic conference where people, innovation technologies and best practices converge to define the future.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

© 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.

www.pwc.com/mm

PwC Myanmar Business Intelligence Publication

For further information please contact:

Jovi SeetSenior Executive Directorjovi.seet@sg.pwc.com

Brandon LyeDirectorbrandon.lye@sg.pwc.com

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