Thailand: gateway to Myanmar and the Mekong sub-region AustCham Thailand 2012 Conference

AustCham Thailand 2012 Conference
Thailand: gateway to Myanmar
and the Mekong sub-region
Manop Sangiambut
Head of International Banking Business
Siam Commercial Bank
13 November 2012
This copy is issued for internal discussion only
-Reproduction is strictly prohibited-
Reform seems irreversible… for now
 Strong political will with various reform steps in the right direction
 Geo-political re-alignments send strong signals and ensure policy
back paddling will be less likely
 The new Foreign Investment Law sets the stage for further
opening-up to foreign investors
Page 1
Abundant business opportunities
Myanmar needs everything from basic consumer products to largescale infrastructure
Macro
Industry with
immediate
demand
Key
infrastructure
 ADB expects 6.0% GDP in 2012 and 6.3% in 2013
 IMF expects 6.0% GDP in 2012 driven by commodity exports and
higher investment, supported by robust credit growth




Hotel/real estate
Retails/trading
Construction and materials
Food processing & agriculture
industrialisation
 Power plants
 Telecom
 Road, ports, and airports
Top 10 products
 Mobile phone
 Automobile
 Motorcycle
 Housing
 Shopping mall
 Satellite dishes
 Hotel
 Tourism
 Publication
 Advertising
Source: Myanmar Marketing
Alliance
Page 2
But the road ahead is not paved with roses
Political
Business
 Weak institutional capacity within the
government
 High land prices while measures to
cool down prices are not robust
 General election in 2015 will be the
real test
 Heavily under-supply of electricity in
foreseeable future
 Ethnic conflict cannot be overlooked
 Lack of logistic infrastructure
 Difficulties with outward remittance
 Banking sector is under developed
Page 3
Invest now or wait?
Now is a land-grab period…
Preliminary check list for “invest now”
 Services or products in heavily-undersupplied segments
 Land lease from government or industrial estates with relatively lower cost
 Relatively short investment lead time
 Do not rely on extensive supply chain and logistics
 Infrastructure projects/concessions from government
 Finding the right local partner is important
Page 4
A number of large scale projects already kick-started
Sector
Power
Oil and gas
Transportation
Telecom
Real Estate
Hospitality
Agriculture
Source: Local press
Page 5
Details
• 14 Hydropower projects through BOT agreements. Total of 700MW by
2015/2016
• 500MW-gas fired power plants by 5 Korean companies to supply electricity to
Thilawa SEZ
• 18 onshore blocks under international bidding to fill domestic demand
• Public budget for roads/bridges renovation between 2012-2031
• Privatisation of Inland Water Transport Cooperation
• Tender for construction of Hanthawaddy Airport near Yangon
• Tender for renovation of Yangon Airport
• Tender for upgrade of Mandalay Airport into a logistics center
• Tender for expansion of 3G mobile network
• Tender for two operating licenses available for foreigners to be expected early
2013
• Residential program to develop 1million apartment units by 2027 (350k by
2017)
• Tenders for land plots in Yangon to be developed into hotels, shopping malls,
private schools and hospitals
• Privatisation of 26 businesses under the management of Minisitry of Livestock
and Fishery
Three special economic zones propel long-term growth
Kyauk Phyu
Thilawa
Dawei
Page 6
Country support: China
Features: Gas pipeline and rail link to China
Industry focus:
• Deep sea port
• Refinery
• Oil & gas
Country support: Japan
Features: Closet proximity to Yangon and will
likely be the first to start
Total area: 24 sq.km. (5,930 acres)
Industry focus: Mixed
Country support: Thailand
Features: Link with Thailand’s eastern
seaboard
Total area: 250 sq.km. (61,775 acres)
Industry focus:
• Logistics
• Oil & gas
• Pulp & paper
• Petrochemical
• Fertilizer
• Steel mills
Getting to know Myanmar tycoons
Tycoon
Group
Business
Aung Thet Mann
Ayer Shwe Wah Company
Construction, palm oil production, import/export of chemical fertilizers and
agricultural products
Aung Ko Win
KBZ Group
Kanbawza Bank, mines, cement, Myanmar Airlines, hospital, London
cigarettes, Air KBZ, Hotel
Chit Khaing
Eden
Myanmar Apex Bank, construction, transport, communications, Traders
hotel
Khin Shwe
Zaykabar Company
Myanmar Ind. Dev. Bank, hotel, construction, industrial estate, real estate,
golf club
Kin Maung Aye
KMA Group
CB Bank, Hotels, tourism, real estate, shipping, gold mine, construction,
Parami hospital, rubber plantation
Michael Moe Myint
Myint & Associates Group
Services related to oil and gas exploration and production eg. construction,
logistics, maintenance, equipment , engineering
Ne Win Tun
Ruby Dragon Jade & Gems
Gold and gem mines, hotels, cement factory
Pyi Aung & Nay Aung IGE
United Amara Bank, oil and gas, agricultural products, timber, electrical
substations, transmission lines
Serge Pun
(aka Theim Wai)
SPA, Yoma, FMI
Yoma Bank, real estate development, manufacturing, construction and real
estate, automotive industry, healthcare
Tay Za
Htoo Group
AGD Bank, timber, transport, tourism, construction, property development,
palm oil
Tun Myint Naing
(aka Steven Law)
Asia World
Construction, transport, energy, communications, Sea port at Kyau Phyu,
10% stake in Trader hotel, Yangon airport operator
Zaw Zaw
Max Myanmar
Ayeyarwaddy Bank, road and rail construction, rubber, import export of
heavy machinery, hotel in Chaung Tha
Source: Irrawaddy Magazine
Page 7
Thai businesses in Myanmar can also be your partners
Industry
Energy
Construction
Fishery
Hotel
Food
Construction Materials
Others
Source: SCB EIC
Page 8
Company
Business
MDX Group
Hydroelectric dam
PTTEP
Natural gas exploration and production
RATCH
Hydroelectric dam
Gunkul Engineering
Wind farm
ITD
Dawei project, hydroelectric dam, cement factory
CPAC
Concrete factory
Siam Jonathan
Only foreign firm allowed to operate fishing fleet in Myanmar
Inter Assets Holding
JV with Myanmar P.P.P., has fishing fleet and seafood factory
Dragon Sea Fishery
JV with Myanmar Fisheries International
Dusit Thani
Dusit Indy Lake Hotel
Bangkok Club
Chartrium Hotel and Hotel Nikko
LP Holding
Mandalay Hill Resort and Centrepoint Towers Hotel
CP
Contract farming and cement factory
Sahaphat Group
Instant noddle factory
Myanmar Sutech
Sugar factory
SCC
Study to operate cement factory in Myanmar
Siam Commercial Bank
Has Rep office in Yangon partnering with 8 local banks
BJC
Plan to set up glass bottle factory
Banking and financial sector reform
So far




Future
 Central bank law promulgation
 Foreign-local JV bank will likely be allowed next year
 Branches may be allowed for Asean banks by 2015
Facts &
figures
 19 local private banks and 4
state-owned banks
 Combined asset of US$ 2bn
Page 9
Kyat has stabilised though recently with upward pressure
Myanmar Payment Union started operation
More banking products have been allowed (eg. forex, L/C)
Insurance licenses being granted
Thailand as a natural hub for the Mekong sub-region
Greater Mekong Sub-region (GMS) economic corridors and Road Network 2015 - 2020
Source: ADB
Page 10
China plays an important role in the region
 Chinese economy is under transition… no hard landing is expected
 China’s “Going Out” policy has been driven by rising domestic costs and
stronger Rmb as well as new market entry
 China’s west region development benefits the Mekong sub-region
development
 China supports key infrastructure including rail, power, telco, and agriculture
in the region
Page 11