PwC MyanmarWeekly Business Intelligence

Issue 11025 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

LPG terminal opens in Yangon

Government woos private sector in construction of Yangon elevated ring road

Elite Petrochemical launches first private-sector LPG project in Myanmar

Korea-Myanmar Industrial Complex to be in Hlegu

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Domestic natural gas to be made available by 2023: MOEE

PwC | May 2018 5

Government woos private sector in construction of Yangon elevated ring road

The Ministry of Construction (MOC) is invitingthe private sector to submit Expressions ofInterest (EOI) to participate in the construction ofan elevated four-lane ring road in Yangon.The MOC on May 18 invited both local andinternational companies interested in designing,engineering, financing, constructing, operatingand maintaining the proposed expressway undera Public Private Partnership (PPP) to submit EOIsbefore June 29.An official tender process is expected to take placelater in the year, the MOC said.It also added that it may decide to split the projectinto sections involving multiple tenders. Eachsection will be developed under a PPP structureor by accepting funds from the IFC.The MOC, together with the Yangon regionalgovernment, is planning to build theapproximately 47.5-kilometer four-lane elevatedring road to connect downtown Yangon, YangonPort, Yangon International Airport, MingalardonIndustrialPark and Yangon-Mandalay Expressway. Theproject is among several other transport

infrastructure projects included under the YangonUrban Transport Development Plan.The aim of the ring road is to alleviate trafficcongestion in Yangon. Long distance traffic will bediverted onto the ring road while vehiclestraveling short distance can continue plying theexisting Yangon roads.“It is a good plan. But the necessary feasibilitystudies for the project will still need to be carriedout first,” said Dr Kyaw Latt, a local urbanplanning expert.

Source: Myanmar Timeshttps://www.mmtimes.com/news/government-woos-private-sector-construction-yangon-elevated-ring-road.html

NewspapersMyanmar Times

21 May 2018

PwC | May 2018 6

LPG terminal opens in Yangon

Ministry of Electricity and Energy has opened aliquefied petroleum gas (LPG) terminal in Yangonand planned to transport the LPG using tankerswhich can carry up to 2,000 tons, said WinKhaing, Union Minister for Electricity andEnergy.The use of LPG can reduce the use of foreigncurrency as it can replace petrol and dieselimported from other countries, sources said.The ministry opened compressed natural gas(CNG) filling stations in Paleik, SintgaingTownship to facilitate the transport sector in thearea starting from 2014 and installed a new CNGcompressor to increase the pressurization innatural gas to 3000 psi. It will reduce the time tofill the CNG, to decrease the running time of thecompressor and to lessen its maintenance.The use of CNG is cost effective and can reducethe environmental damages. The locals need tofollow the instructions and need to cooperate withthe ministry, said the minister.Myanmar has conditions fit for the LPG market toexpand. The LPG industry needs to prepare forlong term plan. The use of LPG will increase if the

government and private sector cooperate, he said.Electric consumption rate is increased to 15 percent annually. The government expected theelectric consumption rate in 2020-21 FY will be4,531 megawatts of electricity. At the present, theministry can generate 3,189 megawatts ofelectricity annually and need 1,342 megawatts.The ministry is planning to generate 439megawatts from three power plants in 2018, 750megawatts from four power plants in 2019, 260megawatts from three power plants in 2020, 971megawatts from five power plants in 2021 and891 megawatts from five power plants in 2022.Myanmar is generating 15 per cent of electricityfrom hydropower plants, 18 per cent of electricityfrom heavy fuel oil power plants, 30 per cent ofelectricity from natural gas fired turbines, 32 percent of electricity from LNG power plants and 5per cent of electricity from solar plantsrespectively.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13956

NewspapersEleven Myanmar

21 May 2018

PwC | May 2018 7

Elite Petrochemical launches first private-sector LPG project in Myanmar

Elite Petrochemical Co launched its LiquefiedPetroleum Gas (LPG) Terminal and Port Facilityat the Thilawa Special Economic Zone onSaturday. The terminal is the first private sector-led LPG investment open for business in thecountry.The terminal was developed under a Build,Operate and Transfer (BOT) agreement across 49acres of land in Thilawa after receiving approvalfrom the Myanmar Investment Commission andon recommendation from the government, said UAung Thet Mann, executive chair of ElitePetrochemical, during the opening ceremony ofthe terminal. U Aung Thet Mann is son of formerPyithu Hluttaw chair U Thura Shwe Mann.The entire project will be developed in phases.Phase 1 includes construction of a 20,000-tonnejetty and storage facilities for up to 3,000 tonnesof LPG.Design of the terminal and storage facilities weredrawn up with the help of China HarbourCompany and China National PetroleumCompany, respectively. In the second week ofApril, a 1,000-tonne LPG vessel docked for the

first time at the port.With Phase 1 now fully complete, Phase 2 will seethe firm building storage capacity for up to25,000 tonnes of LPG and up to 100,000 tonnesof diesel and petrol. This is now around 40percent complete, U Aung Thet Mann said.He added that so far, Elite Petrochemical hasinvested a total of $48 million in the entireproject. The company is planning to plough anadditional $80 million to complete constructionof the oil and gas storage tanks.The launch comes at a time when the governmentis encouraging the private sector to invest in theimport and distribution of LPG as a cleanalternative to electricity for cooking. LPG is abyproduct from the refining of petroleum.In his opening speech, Union Minister forElectricity and Energy U Win Khaing said wideadoption of LPG for cooking can help the countrysave a significant amount of electricity.Source: Myanmar Timeshttps://www.mmtimes.com/news/elite-petrochemical-launches-first-private-sector-lpg-project-myanmar.html

NewspapersMyanmar Times

21 May 2018

PwC | May 2018 8

Korea-Myanmar Industrial Complex to be in Hlegu

YANGON- US$ 110 million worth Korea-Myanmar Industrial Complex(KMIC) project willbe implemented in Nyaungnapin, HleguTownship, Yangon Region.The approximately 555 acres wide project willbegin near Nyaungnapin village, western part ofabout 5-mile away from the Yangon-MandalayExpressway and it is a joint venture betweenCivilian and Housing Development Departmentunder the Ministry of Construction and KoreaLand and Housing Cooperation under theRepublic of Korea.The Memorandum of Agreement on constructionof KMIC project was signed last year and Koreawill invest 60 percent in the project and Myanmaris 40 percent investment. It will start this yearand finish in 2023.“Korea plans to establish industrial zone inNyaungnapin village in cooperation with theministry of construction. Both sides have agreedbut project isn’t submitted yet to the MyanmarInvestment Commission (MIC). Korea wanted toimplement the Nyaungnapin industrial zone tobuild Korean factories in the zone,” said Aung

Naing Oo, MIC’s Secretary.Not only small, medium and large industries butalso Labour Training School of One Stop Services,Staff Housing, Park, Sewage refinery Plant,Management Office and other services willinvolved in the zone.“Although MIC allows the project, they[Korea]must be taken to the proposed site forconstruction of industrial zone under agreementof the respective regional government committee.If the location is satisfactory, we will allow theproject. Moreover, KMIC project has beeninvolved in the MIC’s promotion sector. But, itmust be cleared regarding the land first,” saidAung Naing Oo.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13962

NewspapersEleven Myanmar

22 May 2018

PwC | May 2018 9

Domestic natural gas to be made available by 2023: MOEE

Larger volumes of natural gas will be availablefrom Myanmar’s onshore and offshore gas fieldswithin the next five years, yielding freshopportunities for international oil and gas firms toinvest in the sector, said U Win Khaing, UnionMinister for Electricity and Energy (MOEE).“Gas production will be a priority for thegovernment over the next few years. However, wedo not have the capital or the technology to do so.We need to cooperate with international oil andgas firms to produce the gas and in doing so makeit available for the country as soon as possible,” hesaid.U Win Khaing’s announcement comes even asongoing price negotiations on the import anddistribution of liquefied natural gas (LNG) takesplace between the MOEE and severalinternational gas firms.The government is planning to import LNG to fillan existing shortage of electricity in Myanmar.Over the next two years, it has promised to doublethe current supply of electricity to 6,000megawatts using LNG.The ministry is trying to make gas available in

addition to electricity and transportation to teneconomic zones in future as the phase 1, heinformed energy circle.“LNG will not only benefit the electricity sectorbut also create export opportunities, helping tonarrow the trade deficit,” U Win Khaing said.Because of the high conversion costs involvedthough, LNG becomes a less viable alternativeover the longer term. “As such, our target is makedomestic natural gas available from 2023onwards. It will take next four or five years if westart exploration and production (E&P) worknow,” U Win Khaing said.In Myanmar, natural gas produced at the localShwe, Zawtika and Yadana offshore fields istransported via pipelines to power plants where itis used to generate electricity to meet domesticdemand. However, MOEE and Myanma Oil andGas Enterprise (MOGE) officials have warnedsince 2016 that production from those blocks is indecline.Source: Myanmar Timeshttps://www.mmtimes.com/news/domestic-natural-gas-be-made-available-2023-moee.html

NewspapersMyanmar Times

23 May 2018

PwC | May 2018

Weekly Key Financial & Business NewsHeadlines

Price controls not a viable solution for rising fuel prices: MPTA

Ministry of Construction commits to four mega projects in 2018

Central Bank loans K640 billion to govt to finance deficit

Plans for bridge connecting east and west Yangon in the works

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Bago Region set for industrial zones

PwC | May 2018 11

Ministry of Construction commits to four mega projects in 2018

The Department of Urban and HousingDevelopment under the Ministry of Constructionyesterday announced its commitment toimplementing four mega infrastructure projectsin Mandalay and Yangon regions.In Mandalay, the MOC has shortlisted sixcompanies, one of which will be selected asMaster Developer of the New Mandalay ResortCity, which will be developed in Pyin Oo Lwin.The 9,893 acre project will be developed in threephases. Phase 1 will include an IT facility,convention centre, schools and a commercial zonecomprising malls and banks.Phase 2 will be divided into several zones fordeveloping sectors such as industry and tourism.The third phase will comprise housing options, agolf course as well as hotel and even agriculturezones.A Master Developer is expected to be selected bythe end of this month. “This project will bedeveloped in phases as it is huge project. We willdiscuss the timeline, additional investments andother details with the Master Developer,” DawMoe Thida, deputy director at the Department of

Urban and Housing Development, told TheMyanmar Times.Smart projectsIn Yangon, a K250 billion Smart District has beenearmarked for development at Dagone Seikkantownship. The 1,100 acre location is 8 miles awayfrom the Central Business District and an hour’sdrive from the Hantharwaddy Airport, which isunder construction in Bago.Local property developer Shwe Taung Companyhas been selected for the project, which willinclude commercial developments as well as aslew of housing options adding up to a total of13,000 units. Schools, parks and sports facilitieswill also be constructed.At Nyaung Na Pin village, Hllegu township, theKorean Land and Housing Cooperation (LH) andDepartment of Urban and Housing Developmentwill cooperate to construct a $110 millionindustrial zone.Source: Myanmar Timeshttps://www.mmtimes.com/news/ministry-construction-commits-four-mega-projects-2018.html

NewspapersMyanmar Times

23 May 2018

PwC | May 2018 12

Price controls not a viable solution for rising fuel prices: MPTA

Concerns have been mounting over a steepincrease in local steep prices, however reinstatingcontrols on the price of fuel to cap the spike willonly result negative effects on the economy, saidDr Win Myint, secretary of Myanmar PetroleumTrade Association (MPTA).“The system of price controls has been donenumerous times in our country. Each time it wasadopted, market disorder ensured. It is still bestto allow prices to fluctuate based on the market,”Dr Win Myint said during a press conference inresponse to calls for a solution to rising fuelprices.The way he tells it, when fuel prices werecontrolled in the past, petrol stations wouldrefuse to sell petrol at loss-making levels. Otherswould buy and store petrol and resell the fuel athigher prices. As such, the market did notfunction optimally, he said.“If global oil prices increase, the price of petroldomestically increases because petrol is importedinto the country,” said Dr Win Myint.The highest price for a liter of petrol in Yangon onApril 2 was K825 for 500 ppm diesel, K840 for 10

ppm diesel, K795 for 92-Ron petrol and K840 for95-Ron petrol.On Wednesday however, the price per liter of 500ppm diesel had jumped to K900. Meanwhile, 10ppm diesel is now K915, 92 Ron-petrol at K865and 95 Ron-petrol at K905.Prices are even higher in Sagaing, Monywa,Meiktila and Mandalay, which are located inlandand farther away from the ports. In these regions,a liter of 500 ppm diesel is now being sold atK950. Meanwhile, it is now K965 for 10 ppmdiesel, K955 for 92-Ron petrol and K990 for 95-Ron petrol.Some petrol stations in the rural areas are sellingpetrol for as high as K1,050 per liter.Higher petrol prices could also hurt smallbusiness owners, who have been purchasing morepetrol to run power generators during thesummer months, when electricity cuts are morefrequent, said U Htin Aung Kyaw, deputymanager of Kyaw San petrol station.Source: Myanmar Timeshttps://www.mmtimes.com/news/price-controls-not-viable-solution-rising-fuel-prices-mpta.html

NewspapersMyanmar Times

24 May 2018

PwC | May 2018 13

Central Bank loans K640 billion to govt to finance deficit

The government will borrow around K640 billionfrom the Central Bank of Myanmar (CBM) tofinance the fiscal deficit for the six-month interimperiod between April 1 and September 30, UMaung Maung Win, deputy minister at theMinistry of Planning and Finance, said inParliament this week.The loan represents around 20 percent of thegovernment’s total permitted local borrowingsfrom the CBM, which is in line with the UnionBudget Law.The government is permitted to borrow K4.2trillion, of which K3.2 trillion must be from localsources, according to the law. The aim this year isto meet up to 80pc of the government’s debtrequirements with Treasury bonds and theremaining 20pc with money from the CBM.In two years’ time, it has committed toeliminating its reliance on CBM borrowing tofinance the fiscal deficit, now around 3.5pc ofGDP on the back of higher spending oninfrastructure and social services such aseducation and healthcare, according to the AsianDevelopment Bank (ADB).

Based on the ADB’s estimates, the deficit isestimated to rise to 4pc of GDP this fiscal year,which will commence on October 1.“The Union Government will continue takingefforts to reduce its level of borrowing from theCBM,” U Maung Maung Win said.To finance the rise in public spending, deepeningthe Myanmar bond market will be necessary.Currently, the CBM issues Treasury bonds atinterest rates of 9.18pc for 2-year bonds and9.69pc for 3-year bonds. It also issues short termTreasury bills at interest rates of 8.16pc for 3-month bills, 8.53pc for 6-month bills and 8.63pcfor 12-month bills.For now, local banks buy up more than 99pc ofthe bonds issued by the Myanmar government,while foreign banks take up less than 1pc.To further expand, Myanmar bonds must bemade available to foreign institutional investorslike pension funds and insurance companies.

Source: Myanmar Timeshttps://www.mmtimes.com/news/central-bank-loans-k640-billion-govt-finance-deficit.html

NewspapersMyanmar Times

24 May 2018

PwC | May 2018 14

Plans for bridge connecting east and west Yangon in the works

Plans are underway to build a suspension bridgeconnecting Kyauktan and Dala townships bypassing through Thilawa Special Economic Zone,U Kyaw Lin Deputy Minister of Ministry ofConstruction said in Parliament last week.The decision to build the bridge came afterstudies revealed an original plan to construct atunnel connecting the two townships to beunfeasible. The proposal to build a tunnel wassubmitted by Japanese infrastructure companyIHI Corporation.U Kyaw Lin was responding to questions raised byDaw Aye Mya Mya Myo, MP from Kyauktanconstituency. “There is need for a bridgeconnecting the two townships to enable residentsto commute with greater ease and spur furtherdevelopment and jobs,” she said.The bridge will be built across the Yangon Riverand connect the five eastern townships of Yangonwith the five western townships. Currently,commuters and transportation companies areforced to use the roads for access to the townshipson either side of the river, resulting in trafficcongestion and unequal living standards, said U

Aye Mya Mya Myo.As the Thilawa develops, there will also be a needfor better infrastructure to enable the efficientflow of goods in and out of the SEZ.“This bridge is needed and if there is a plan for it,it should be a definite one with a proper timelineand budget,” she said.Plans to construct a bridge connecting Dalatownship with downtown Yangon have been inthe works for years.New infrastructure including roads andexpressways are included in the Yangon UrbanDevelopment Plan, which was drafted with thehelp of the Japan International CorporationAgency in 2008-09, said U Kyaw Lin.

Source: Myanmar Timeshttps://www.mmtimes.com/news/plans-bridge-connecting-east-and-west-yangon-works.html

NewspapersMyanmar Times

25 May 2018

PwC | May 2018 15

Bago Region set for industrial zones

Local government in southern Myanmar's BagoRegion has renewed calls for development,mentioning Chinese and South Korean investorspushing for increased access to industrial zones.“No land has been set aside for the industrialzones in Bago Region, but the government hasdefined industrial areas,” Bago Region ministerfor planning and finance Nyunt Shwe said,according to an article published May 19 in GlobalNew Light of Myanmar.The article goes on to state that, “The regiongovernment is scrutinising the contracted land,which has been granted to implement the projectin the industrial areas.”While the chronology of these seeminglycontradictory statements has not been madeclear, recent reports of domestic and internationalinvestors pushing into the Bago Region includeKaytumadi Development Public Co., founded bycurrent CB Bank Chairman Khin Maung Aye.According to Eleven Myanmar, in 2013,Kaytumadi applied for a 4,800-acre“international-level industrial park” that wouldtake five years to complete. In March 2016 they

were granted “permitted enterprise” status byMyanmar's Directorate of Investment andCompany Administration for industrialdevelopment on more than 1,500 acres.Another potential investor is Lee & Man PaperManufacturing Limited, a Hong Kong-listedChinese company that recently requestedpermission to utilize more than 800 acres for apaper production plant. According to Xinhua, thecompany pledged to send 3,000 local residents ofBago to China for a one-year training programmeas part of the investment.Additionally, it is unclear what has become ofrequests made in 2016 by the Korean IndustrialComplex Company for implementation of an8,000-acre industrial zone in Bago Region, asreported by the Ministry of Information at thetime.

Source: Mizzima Newshttp://www.mizzima.com/business-domestic/bago-region-set-industrial-zones

NewspapersMizzima News

26 May 2018

PwC | May 2018

2. Weekly Key Policy News

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PwC | May 2018

Weekly Key Policy NewsHeadlines

Central bank issues license to Myanmar Credit Bureau

IFC’s draft hydropower SEA report released

Union Ministries hold press conference on second one-year performance

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The performance of the Ministry of the Office of the State Counsellor during the two year term of the Union Government

PwC | May 2018 18

Central bank issues license to Myanmar Credit Bureau

The Central Bank of Myanmar (CBM) has issued alicense to Myanmar Credit Bureau Limited,allowing it establish a credit bureau in thecountry, according to a May 17 CBMannouncement.Myanmar Credit Bureau, a joint venture betweenthe Myanmar Bank Association and Singapore’sAsian Credit Bureau Holdings, will collectinformation on loan repayment histories andother information on borrowers and distributethe profiles to lenders such as banks and othernon-bank financial institutions, theannouncement said.The move arrives a year after the CBM issued aregulations for credit-based loans and marks astep away from strict collateral requirementswhen applying for loans.With credit profiles and more borrowerinformation available, lenders will be better ableto evaluate the creditworthiness of potentialborrowers and improve risk assessmentprocedures. Ultimately, it will enable manyentrepreneurs and small and medium enterprises(SMEs) to qualify for loans.

“Establishing a credit bureau is a good move as itwill help increase access to finance for borrowersand help lenders gauge whether they shouldextend the loan or not,” said U Aung Thein, chairthe Myanmar Industrial Association and SMEDevelopment Committee under the UMFCCI.At the launch of the credit reporting regulationlast year, Vikram Kumar, IFC Country Managerfor Myanmar, said effective credit informationsharing is a “critical first step towards interestrate liberalisation in Myanmar as it will lead tothe adoption of risk-based pricing for loans.”Apart from the license, the new Myanmar CreditBureau will require capital of at least K3 billion($2.2 million). It is expected to be operationalwithin a year.

Source: Myanmar Timeshttps://www.mmtimes.com/news/central-bank-issues-license-myanmar-credit-bureau.html

NewspapersMyanmar Times

22 May 2018

PwC | May 2018 19

IFC’s draft hydropower SEA report released

The draft strategic environmental assessment(SEA) report which aims to improve thesustainability of the hydropower sector wasreleased by the International Finance Corporation(IFC) and the government. The Ministry ofElectricity and Energy (MOEE) and Ministry ofNatural Resources and EnvironmentalConservation (MONREC) led the report whichhas been shared with stakeholders for publicreview and feedback.“For the past 18 months, the SEA process hasengaged stakeholders from civil society, NGOs,private sector, financial institutions anddevelopment,” the IFC, a member of the WorldBank Group, said in a statement released on May21.One major recommendation outlined in the SEAis to preserve the mainstems of the country’s keyrivers – including the Ayeyarwady, Thanlwin andChindwin among others - encouraging decisionmakers to explore locations that have lessenvironmental, social and cultural risk.U Hla Maung Thein, director general of theEnvironmental Conservation Department under

the MONREC, said that his department, havingreviewed the SEA final report andrecommendations, agrees with “the direction it ispointing hydropower development in”.“Recommending to protect the mainstems[principal watercourse] of Myanmar’s key riverswould be a monumental achievement withmultiple socio-economic benefits, keeping thenatural ecosystems of our country. We hope to seethis recommendation moved forward by decisionmakers,” he commented.Myanmar’s SEA focuses on the country’shydropower potential while mapping outenvironmental and social complexities. The SEAwill identify opportunities to sustain natural riverbasin processes that regulate and maintain riverhealth and other ecosystems services. A riverbasin designated as low- or medium-risk is notnecessarily a green light for development.

Source: Myanmar Timeshttps://www.mmtimes.com/news/ifcs-draft-hydropower-sea-report-released.html

NewspapersMyanmar Times

23 May 2018

PwC | May 2018 20

Union Ministries hold press conference on second one-year performance

As part of the series of press conferences on theUnion Ministries’ second one-year performances,Ministry of Information, Ministry of ReligiousAffairs and Culture, Ministry of Labour,Immigration and Population, and Ministry ofHotels and Tourism held their press conference atthe Ministry of Information building in Nay PyiTaw yesterday.Ministry of InformationUnion Minister Dr. Pe Myint explained of hisministry’s role in bridging the gap between thegovernment and the public and disseminatinginformation among the people. The Informationand Public Relations Department establishedpublic libraries across the country and has beenupgrading them into community centres withbook clubs. Over a hundred public talks havebeen carried out in these centres as well.The Ministry has the task of reporting news to thepeople and in light of increasing importance ofthe IT sector the ministry has formed MyanmarDigital News (MDN) to better reach out to theonline sector. The union minister said MOI hasbeen partnering with private organizations as well

in disseminating news, knowledge andentertainment to the public.Ministry of Religious Affairs and CulturePermanent Secretary of the Ministry of ReligiousAffairs and Culture U Tun Ohn said eighty-eightmembers of the Sangha passed the 70thTipitakadhara Tipitakakovida SelectionExamination organised by the Ministry ofReligious Affairs and Culture in 2018.Religious titles were conferred on 199 Members ofthe Sangha and 60 men and women totalling 268in 2018 for their outstanding performance inreligious affairs. Meanwhile, provisions and cashamounted to over Ks320 million to the Membersof the Sanghas and nuns. In the 2017-2018Academic Year, over 300,000 school children arelearning at 1,547 monasteries and the ministryfunded Ks140 million to the monastic educationschools nationwide to give salaries to teachersthere.Source: Global New Light of Myanmarhttp://www.globalnewlightofmyanmar.com/performance-ministry-office-state-counsellor-two-year-term-union-government/

NewspapersGlobal New Light of Myanmar

26 May 2018

PwC | May 2018 21

The performance of the Ministry of the Office of the State Counsellor during the two year term of the Union Government

After the enactment of the State Counsellor Lawon 6 April 2016, the Ministry of the Office of theState Counsellor was established in accordancewith this law, with the following objectives:(1) emergence of multi-party democracy.(2) flourishing of a market-oriented economy.(3) establishment of a Federal Union.(4) promoting Union peace and development.The Ministry of the Office of the State Counselloris performing a coordinating and supportivefunction in implementing the four duties assignedto the State Counsellor stipulated in the StateCounsellor Law, and in carrying out the policieslaid down by the State Counsellor. It may be saidthat the activities performed by this Ministry andthe activities of the State Counsellor are in linewith each other.The three goals laid down by the State are peace,prosperity and democracy, in short PPD – Peace,Prosperity and Democracy. The first goal Peaceand the second goal Prosperity are related. Just asinternal peace is needed for strong economicdevelopment, achievement of peace is related tothe smooth transition towards the establishment

of a Democratic Federal Republic which is ourthird goal. That is why in the performance of itsduties, this Ministry does not act on each goalseparately but looks at the three goals in relationto each other and as one integral whole.Since assuming its duties, the incumbentGovernment has been working on the peaceprocess as its priority policy goal. To effectivelyimplement the tasks related to nationalreconciliation and peace, it established the NRPC– National Peace and Reconciliation Centre withthe State Counsellor as Chairperson. The PeaceCommission was also formed to implement thepolicies laid down by the NRPC and to conductpeace negotiations with the ethnic armedorganizations.Just as we are negotiating andcoordinating with the ethnic armed organizations(EAOs) which have signed the NCA (NationwideCeasefire Agreement) for implementing thepoints agreed in the NCA for durable peace,Source: Global New Light of Myanmarhttp://www.globalnewlightofmyanmar.com/performance-ministry-office-state-counsellor-two-year-term-union-government/

NewspapersGlobal New Light of Myanmar

27 May 2018

PwC | May 2018

3. Weekly Investment News

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PwC | May 2018

Weekly Key Investment NewsHeadlines

Singapore tops investors list in Thilawa SEZ

Alibaba secures foothold in Myanmar market, growth in e-commerce expected

Myanmar Digest: BASF opens first chemical plant; Precision Auto to invest $1.35m

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Yoma Strategic and Pernod Ricard Announce Joint Venture, Target Leadership in Myanmar’s Whisky Industry

Edotco takes over Ooredoo’s energy assets, management of telecoms towers

PwC | May 2018 24

Singapore tops investors list in Thilawa SEZ

Till late April, the total investments of 17countries in Thilawa Special Economic Zonereached over US$ 1.374 billion, with Singaporetopping the list with over US$ 503 million,according to the Thilawa Special Economic ZoneManagement Committee.Singapore led the investor list with US$ 503.71million, followed by Japan with US$ 425.54million, Thailand, with US$ 151.80 million,Myanmar, with US$ 54.70 million, South Korea,with US$ 54.60 million, Hong Kong, with US$47.15 million, British Virgin Islands, with overUS$ 20 million, UAE with US$ 19.16 million,Taiwan with over US$ 16 million, Austria, withUS$ 15.35 million, Malaysia with over US$ 15million, Panama with US$ 13.91 million, Bruneiwith US$ 13.91 million, China with over US$ 12million, Australia with over US$ seven million,Vietnam with over US$ seven million andNetherlands with over US$ one million.More than 57 per cent of the first phase of a 101-hector project in Zone-B of Thilawa SpecialEconomic Zone has been rent out to investors,said Cho Cho Win, vice-chair of Thilawa Special

Economic Zone Management Committee.Cho Cho Win, vice-chair of Thilawa SpecialEconomic Zone Management Committee said:“The construction of Zone-B has started. At thesame time, the committee has granted permits toseven companies for Zone-B.”The opening of the first phase of in Zone-Bproject (101 hectors) was held on February 24,2017. The project is expected to complete in mid-2018.“There are 70 investments in industry sector, onein logistics sector, nine in trading sector, four inservice sector, one in real estate sector and one inhotel sector,” she added.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13952

NewspapersEleven Myanmar

22 May 2018

PwC | May 2018 25

Alibaba secures foothold in Myanmar market, growth in e-commerce expected

Alibaba group has established a foothold inMyanmar following the acquisition of DarazGroup, the Pakistani online shopping platformwhich operates Myanmar e-commerce siteshop.com.mm.The move could be the start of a slew ofinvestments in the country by the ChineseInternet giant as well as other rival businesses. Italso came just a week before the Ministry ofCommerce (MOC) on May 14 opened retail andwholesale trading to foreign owned companiesand joint ventures, allowing them to trade anycommodity manufactured in Myanmar orimported from overseas.Alibaba on May 8 acquired Daraz, which is ownedby German start-up incubator Rocket Internet,for an undisclosed sum. Before the acquisition,Daraz was owned by CDC Group, the UKgovernment’s Development Finance Institution(DFI) and Asia Pacific Internet Group (APACIG),which is a joint venture between Rocket Internetand the Qatari telecoms group Ooredoo.The deal is the second time Alibaba has acquired aRocket company, the first being Singapore-

headquartered e-commerce company Lazada twoyears ago.The acquisition could mark a turning point for e-commerce in Myanmar, especially with foreignretailers now permitted to set up shop in thecountry. “This move will change the entire e-commerce ecosystem and the way people look ate-commerce in Myanmar,” said Sumit Jasoria,who is the former regional managing director forMyanmar, Sri Lanka and Nepal at RocketInternet. “The new law is like icing on the cake.Now, Alibaba can open or invest in a network oflocal logistics and distribution companies. Theymay look at building their own warehouses oropen other e-commerce and digital start-ups oftheir own,” Mr Jasoria added.And Alibaba would not be without competition.Earlier this year, Daizen Myanmar, a logisticspioneer based in Thilawa Special Economic Zone(SEZ).Source: Myanmar Timeshttps://www.mmtimes.com/news/alibaba-secures-foothold-myanmar-market-growth-e-commerce-expected.html

NewspapersMyanmar Times

22 May 2018

PwC | May 2018 26

Myanmar Digest: BASF opens first chemical plant; Precision Auto to invest $1.35m

Global Chemical firm BASF has made an entryinto Myanmar with the construction of a chemicalplant. And, Precision Auto Engineering fromIndia plans to invest $1.35 million for setting upan assembly plant in Kayin State. BASF openschemical plant in Yangon Global manufacturer ofchemical products BASF has announced theopening of its first plant in Myanmar to producetailor-made construction chemicals. Theproduction facility, located at the East DagonTownship, will supply concrete admixtures tosupport the growth of the local constructionindustry. “Myanmar is one of the fastest growingmarkets in Asia Pacific, and is important forBASF,” said Dr. Hicham Abel, senior vicepresident, Construction Chemicals Asia Pacific atBASF. Since 2012, BASF has been offeringsolutions to the Myanmar market throughdistributors. Its registered sales in Myanmar in2017 stood at about €9 million ($10.5 million).India’s Precision to invest $1.35m in automobileunit Precision Auto Engineering Co Ltd, an Indianmaker of stainless steel fasteners and high tensilefasteners, plans to invest $1.35 million in setting

up an automobile assembling and manufacturingplant in Kayin State, according to the directorateof investment and company administration. Theinvestment marks the first foreign investmentapproved in Kayin State during the two yeartenure of the current elected government. Locatedat the Myawaddy Border Trade Industrial Zone,the plant will produce two-wheeler, three-wheelerand a four-wheeler eco-car production. KayinState has three foreign investments approved asof March 2018, contributing $228 million.Yangon has seen 846 foreign investmentsapproved for a total of $20.2 billion so far.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/basf-precision-auto-98440/

NewspapersDeal Street Asia

24 May 2018

PwC | May 2018 27

Yoma Strategic and Pernod Ricard Announce Joint Venture, Target Leadership in Myanmar’s Whisky Industry

Yoma Strategic Holdings Ltd. (“Yoma Strategic”)and Pernod Ricard have announced that theyintend to form a joint venture company which willfocus on the production and distribution ofwhisky in Myanmar. Pernod Ricard will install aninternationally experienced management teamand become the largest shareholder in the newcompany. The remaining equity will be splitbetween Yoma Strategic, private equity firm DeltaCapital Myanmar and U Htun Win and U ZawWin (“Win Brothers”), both experiencedprofessionals in Myanmar’s alcoholic beveragessector.Pernod Ricard is the world’s second-largest winesand spirits company, and its market entryrepresents the first time a major global producerof wine and spirits has established a formalpresence in Myanmar. The move furtherconsolidates Pernod Ricard’s leading position inAsia, notably in the whisky category with Chivas,Ballantine’s and Seagram’s whiskies popular inthe region. Myanmar will be the 86th country inwhich Pernod Ricard has established a directaffiliate.

The closing of the transaction is subject tocompletion of the restructuring of the High Classbusiness as well as customary conditions. It isexpected to take place in 2019.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yoma-strategic-and-pernod-ricard-announce-joint-venture-target-leadership-myanmars-whisky

NewspapersMyanmar Times

25 May 2018

PwC | May 2018 28

Edotco takes over Ooredoo’s energy assets, management of telecoms towers

Telecoms tower firm Edotco signed with Qatarioperator Ooredoo yesterday to take over energyassets and management of 1,250 tower sitesacross Myanmar in order to improve operationaland energy efficiencies.Edotco Myanmar, which belongs to the Malaysiantelecoms giant Axiata Group subsidiary Edotcogroup, will now be able to provide and manageenergy for all tenants on these sites. The firmstated that the consolidation of systems is set tonot only enhance operations but also createenergy and environmental efficiencies.Vijendran Watson, managing director for EdotcoMyanmar, said that this shift in business modelmoves the company from providing tower servicesto tower plus power services.“By operating and maintaining the overall powermanagement systems, we will be able to optimiseenergy systems and energy pass throughmanagement at the sites.“Apart from that, edotco will provide remotemonitoring which will boost operational efficiencyby allowing us to address energy managementissues as and when they occur, helping to reduce

network downtime,” Mr Watson explained.Through sharing energy systems with all tenants,the company seeks to reduce noise andenvironmental pollution caused by multipleoperators owning individual diesel generators onsites.Vikram Sinha, chief executive officer of OoredooMyanmar Ltd, said that this partnership allowsthe firm to prioritise meeting the operational andcustomer’s needs that edotco will be efficientlymanaging all energy needs on these sites.“We benefit from energy efficiencies, lowerdowntime and improved experience at both anoperational and environmental level throughimproved overall performance of the powersystems at the sites,” Mr Sinha said.Established in 2012, edotco, the first regional andintegrated telecommunications infrastructureservices company in Asia, is providing end-to-endsolutions in the tower services sector.Source: Myanmar Timeshttps://www.mmtimes.com/news/edotco-takes-over-ooredoos-energy-assets-management-telecoms-towers.html

NewspapersMyanmar Times

25 May 2018

PwC | May 2018

3. Weekly New Tenders

29

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 Planning and Finance: Request for expressions of interest for the preparation and establishment of South East Asia Disaster Risk Management Project (consulting services – local advisor), Closing Date: 1 June 2018

Ministry of Planning and Finance: Request for expressions of interest for the preparation and establishment of South East Asia Disaster Risk Management Project (consulting services – firms selection), Closing Date: 1 June 2018

Ministry of Construction: Expression of Interest for Yangon Expressway PPP Construction Project. Closing Date: 29 Jun 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: Resilient Communities Development Project - Project Implementation Specialist, Closing Date: 30 May 2018 (Individual)

WB: Short-term Consultant (STC) for International Finance Corporation, Closing Date: 29 May 2018 (Individual)

ADB: Capacity Development for Project Implementation - National Procurement Consultant, Closing Date: 28 May 2018 (Individual)

ADB: Greater Mekong Subregion Capacity Building for HIV/AIDs Prevention - 9C Project Coordinator, Closing Date: 31 May 2018 (Individual)

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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WB: Short Term Consultant: Carbon Finance/Environment/Agriculture Specialist, Closing Date: 07 June 2018 (Individual)

WB: Implementing Performance Standard 6 and Biodiversity Risk Management, Closing Date: 06 June 2018

PwC | May 2018

4. MIC Permitted Projects

33

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

35

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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