PwC MyanmarWeekly Business Intelligence

Issue 4710 March 2017

www.pwc.com/mm

PwC | March 2017

1. Weekly Key Financial & Business News

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PwC | March 2017

Weekly Key Financial & Business NewsHeadlines

New Hotel Zone Plan For Ngapali Beach

KBZ Gateway Announces 200 Bank Branches Connected Via Satellite

LNG Fills Energy Supply Gap

Mandalay Development Policy Draft Completed

Planning And Finance Ministry To Take Over MADB

Ministry Aims At 1 Million Housing Units By 2030

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PwC | March 2017

Weekly Key Financial & Business NewsHeadlines

Thai Exim Bank To Open Rep Office In Yangon

Myanmar’s Max Looking For Financial Services, Banking Partners

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PwC | March 2017

NewspapersMyanmar Times

New hotel zone plan for Ngapali Beach

With tourism growing, the Rakhine Stategovernment is planning a new hotel zone nearNgapali Beach for long-term sustainable tourism.Rakhine State Planning and Finance Minister UKyaw Aye Thein told The Myanmar Times thatthe government was considering this, as therewere some hotels in the area that were builtwithout following regulations.He said the exact location of the new hotel zonewas not yet confirmed as it was still at planningstage.“We are going to the area to assess the situationnext month. Now, we are still planning. We wantto systematically develop the beach area so it canbe sustainable in the long term,” he said.U Kyaw Aye Thein said according to the Hotel andTourism Ministry’s directives for beach areas,buildings could not be higher than 30 feet.But there was a hotel in Ngapali that hadexceeded the maximum permitted buildingheight, he said.The hotel, he said, would have to take off its roofto comply with the height restriction.Ngapali now has 26 hotels offering 878 rooms.

There are 18 hotels with 615 rooms still underconstruction.Daw Ohnmar Khin, officer in charge of NgapaliBeach’s Sandoway Resort, said the new hotel zoneidea was good to promote tourism sustainabilityfor Ngapali, which is popular for its sceneries, laidback village life and beach.She agreed that the beach area needed policies forbetter control and management.

Source : Myanmar Timeshttp://www.mmtimes.com/index.php/national-news/25194-new-hotel-zone-plan-for-ngapali-beach.html

06 March 2017

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PwC | March 2017

NewspapersMyanmar Business Today KBZ Gateway Announces 200 Bank Branches

Connected Via Satellite

KBZ Bank has hooked up 200 of its branches tosatellite technology to speed up transactions andhelp the company with its e-commerce push.Its subsidiary KBZ Gateway has installed VerySmall Aperture Terminal (VSAT) technology,which enables communication via satellite, at itsbranches across the nation.KBZ, the country’s largest lender, recently reaf-firmed its commitment to ‘brick and mortar’branches, saying a physical presence was key toestablishing trust among the un-banked popula-tion.The proliferation of VSAT technology at bankbranches, particularly in the country’s remoterural areas, enables the high-speed transfer ofdata via satellite dish necessary for e-commerce,credit card use and high speed broadband, thecompany says.“VSAT has brought high-speed connectivity andadvanced telecommunication infrastructure toKBZ’s banking sector in order to provide betterservice for the customers.” said Stephane Lam-oureux, chief executive officer of KBZ Gateway.KBZ Gateway hopes Investing in VSAT in-

frastructure will help branches become moreefficient and cost-effective.VSAT technology, which uses a small dishdirected at a satellite, enables data to be receivedand sent remotely via a control centre known as aground station. More businesses in Myanmar areutilising VSAT technology preceding the rollout offixed line broadband.

Source : Myanmar Business Todayhttp://www.mmbiztoday.com/articles/kbz-gateway-announces-200-bank-branches-connected-satellite

06 March 2017

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PwC | March 2017

NewspapersMyanmar Times

LNG fills energy supply gap

Despite the eventual decline of three offshore gasprojects, attempts are being made to supply 480million cubic feet per day in summer, according tomanaging director of Myanma Oil and GasEnterprise U Myo Myint Oo on March 3.“A plan has been arranged to amass up to 430million cubic feet from offshore oil. Combinedwith 50 million cubic feet from onshore [oil], themaximum gas supply in this summer will be about480 million cubic feet [per day],” he said at theelectricity and energy sector development forumheld at Republic of the Union of MyanmarFederation of Chamber of Commerce andIndustries (UMFCCI) office.There are four offshore gas projects: Yadana,Yetagun, Shwe and Zawtika gas projects. Out ofthe four, Yetagun gas project has no domesticsupply and the rest have a pipeline connection aswell as domestic gas supply.Onshore oil and gas fields are producing andsupplying 50 million cubic feet of gas per day, andthree offshore gas projects are currentlysupplying about 400 million cubic feet per day.Production line, which began in 1998, has led to a

natural decline in some gas reservoirs.Yadana’s gas project in 1998, which saw a boost inproduction, will face a natural decline in 2021.Zawtika’s natural decline is predicted to be in2023 and Shwe project’s to be in 2027-2028, saidU Myo Myint Oo.

Source : Myanmar Timeshttp://www.mmtimes.com/index.php/business/25245-lng-fills-energy-supply-gap.html

09 March 2017

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PwC | March 2017

NewspapersMyanmar Times

Mandalay development policy draft completed

The first draft of a policy to develop specificindustries in the Mandalay Region has beencompleted and will soon be presented to theHluttaw once the policy is finalised.Work on drafting the policy began three monthsago, and focuses on the sectors of agriculture,SMEs, tourism and transparency.The project was initiated by Pa Nya Yaung Chi,which is led by Tin Maung Than with thetechnical support of the United States Agency forInternational Development, or USAID.U Kyaw Soe Naing, who was a participant indiscussions for small and medium-sizedenterprises (SMEs), said that he was optimisticthat the policy will bring about positivedevelopments in the region.“We discussed the challenges of the SMEs, andsaid that for 65 percent of value-added foodenterprises, the biggest challenge is loanproblems for the banks.“The banks are not able to give properinformation on how to obtain a loan, and don’thave definite guidelines for giving out the loans.“Based on data from the Ministry of Industry,

there are only six people who have obtained theloans. And it is a complex process. We need sixcertificates including SMEs member card,Mandalay City Development Committeeregistration and so on,” he said.U Kyaw Soe Naing said the food industry alsodoes not have standards.

Source : Myanmar Timeshttp://www.mmtimes.com/index.php/national-news/mandalay-upper-myanmar/25238-mandalay-development-policy-draft-completed.html

09 March 2017

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PwC | March 2017

NewspapersMyanmar Times

Planning and Finance Ministry to take over MADB

Myanmar Agricultural Development Bank(MADB) will be taken over by the Ministry ofPlanning and Finance in April, due to difficultiesfaced by the bank in issuing loans expediently tofarmers as well as collection of loan repayments,Deputy Minister U Hla Kyaw from Ministry ofAgriculture, Livestock and Irrigation said at thePyithu Hluttaw.He said this was necessary as there wereweaknesses in the laws governing the bank whichmade it difficult for the bank to operateefficiently.MADB is currently under the purview of theMinistry of Agriculture, Livestock and Irrigation.“There are requirements and weak points in thelaws of Agricultural Development Bank. So, it willbe transferred as of April 1 to the Ministry ofPlanning and Finance, which is the relevantministry for this business,” U Hla Kyaw said onMarch 8.“There are also plans to reform the bank’sprocesses,” he added.Although MADB loans billions of kyat annually tosmall farmers across the country, it does not have

sufficient capital and has to borrow from theMyanma Economic Bank (MEB) and Central Bankto meet the farmers’ loan needs. The processhinders the bank in giving loans to farmers intime for the rainy season.The bank also faces problems in collecting loanrepayments, which are necessary to repay its loandebts to MEB.

Source : Myanmar Timeshttp://www.mmtimes.com/index.php/national-news/nay-pyi-taw/25254-planning-and-finance-ministry-to-take-over-madb.html

10 March 2017

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PwC | March 2017

NewspapersMyanmar Times

Ministry aims at 1 million housing units by 2030

The Ministry of Construction has planned toimplement one million units by 2030, accordingto the government’s housing development plan.The plan began in 2012 and it is intended to beimplemented over the course of five years.As the plan is reaching its first five-year marker,the government should be building an estimated300,000 housing units every five years.“However, during 2011 and 2016, they[construction] didn’t reach the target”, said UThar Htay, chair of the Myanmar ConstructionEntrepreneur Association (MCEA).“The Ministry of Construction announced thatthey would implement one million units by 2030… they didn’t reach the target in the past fiveyears. The ministry specifically used the budgetfrom the Union Government for that [project],but they didn’t reach the target,” he said.The project of housing development began in2011, at the time of U Thein Sein’s government.But now, the current government has a newstrategy for the issue, said U Thar Htay.It is the Ministry of Finance and Planning whichwill take the lead for the initiative, and the

government will contract out housingdevelopment plans through the MCEA, he added.“MCEA was given recently the contract toconstruct low-cost and affordable apartments forgovernment projects. So we will build low-costand affordable apartment throughout the country.At the moment, we don’t have any details for thatplan yet,” said U Thar Htay.

Source : Myanmar Timeshttp://www.mmtimes.com/index.php/business/property-news/25267-ministry-aims-at-1-million-housing-units-by-2030.html

10 March 2017

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PwC | March 2017

NewspapersEleven Myanmar

Exim Thailand to open Yangon rep office by April

Export-Import Bank of Thailand (Exim Thailand)is opening a representative office in Yangon byApril.This followed the Central Bak of Myanmar'spresentation of the license on March 6. EximThailand President Pisit Serewiwattana was inNay Pyi Taw to receive the license from CBMGovernor Kyaw Kyaw Maung.Pisit said the next step is to apply for a permit totrade and registration of the representative officefrom Myanmar’s Ministry of National Planningand Economic Development. The office will workin collaboration with Thailand’s relevantgovernment agencies as part of the “ThailandTeam” in promotion and support of Thai tradeand investment in Myanmar by facilitating bothstart-up and expansion endeavors of Thaientrepreneurs."Exim Thailand is ready to support Thaientrepreneurs wishing to expand their exportmarkets or relocating their factories to Myanmarwith a view to lowering their production andtransportation costs and better serving theirconsumers, both the Myanmarese and foreign

investors whose business operations in Myanmarhave been on the rise. This is also a move inresponse to Myanmar’s burgeoning urbanisation,infrastructure and manufacturing development,while nurturing social and economic developmentof Asean as a whole,” said Pisit.Thailand is one of major Myanmar’s tradepartners and top foreign investors. Major exportgoods from Thailand include beverages, sugar,finished oil products, machinery and equipment,and chemicals, while main import goods fromMyanmar are petroleum products, meat, liveanimals, metal ore, vegetables and fruits. Thaidirect investments in Myanmar go to suchindustries as natural gas exploration andproduction, power plant, and cement andconstruction material manufacturing.

Source : Eleven Myanmarhttp://www.elevenmyanmar.com/business/8224

09 March 2017

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PwC | March 2017

NewspapersBloomberg

Myanmar’s Max Looking for Financial Services, Banking Partners

Max Myanmar Holding Co., a hotels-to-engineering conglomerate, said it is looking forpartnerships in financial services and is in talkswith France-based Accor SA to expandcooperation in hotel management.The Yangon, Myanmar-based group expects legalchanges in the country to encourage moreinvestment, U Zaw Zaw, Max Myanmar chairman,said in an interview Thursday at the BloombergInvest Myanmar conference. U Zaw Zaw also saidhe “has a dream” to list the company in HongKong, Bangkok or Singapore, along with Yangon.Myanmar is enacting laws to encourage foreigninvestment in one of Southeast Asia’s fastestgrowing economies. A revamped companies lawto take effect by April will allow overseasinvestors to acquire as much as 35 percent of theequity in local firms before they are consideredforeign-owned. Foreigners will also be able to buyshares on the Yangon stock exchange. A separateproposed law would also make foreign companieseligible for tax incentives without first seekingapproval from the Myanmar InvestmentCommission.Max, founded in 1993, owns three hotels in the

country including two that are managed by AccorSA, as well as cement factories, highway projectsand gasoline pumps. U Zaw Zaw was previouslyon the U.S. government’s list of “speciallydesignated nationals.”The U.S. government began a program ofsanctions against Myanmar in May 1997 when thecountry was run by a military junta. Following atransition toward democracy, President BarackObama rolled the sanctions back in October lastyear.The now defunct U.S. program had targetedindividuals and entities including Tay Za, father ofAGD Bank’s Managing Director Htoo Htet Tay Za,as well as U Zaw Zaw and his Max MyanmarGroup.The European Union lifted all its sanctionsagainst Myanmar in 2013, with the exception ofan arms embargo.

Source : Bloomberghttps://www.bloomberg.com/news/articles/2017-03-09/myanmar-s-max-looking-for-financial-services-banking-partners

09 March 2017

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PwC | March 2017

2. Weekly Investment News

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PwC | March 2017

Weekly Key Investment NewsHeadlines

Groups Call On Myanmar And Thai Governments To Ensure Responsible Investment In Dawei

Top Thai Estate Developer Hemaraj Says Investment In Myanmar ‘Possible’

MCEA Signs MoU With Surbana Jurong On Low-cost Housing

PTTEP divests 50% participating interest in Myanmar project

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PwC | March 2017

NewspapersMyanmar Business Today Groups Call on Myanmar and Thai Governments

to Ensure Responsible Investment in Dawei

Myanmar and Thai civil society organisationshave called on their governments to enforce in-ternational treaties amid simmering local opposi-tion to projects around Myanmar’s south-easternDawei district.In a statement last week the Dawei DevelopmentAssociation (DDA) from Myanmar and 27 Thaigroups pointed to social and environmental dam-age in neighbouring countries Laos, Cambodiaand Myanmar, particularly the Dawei district andTanintharyi Region, which they said was a resultof growing Thai investment.The statement was aimed at the Myanmar andThai governments, as well as Thai businesses. Iturged them to adhere to the United Nations Guid-ing Principles on Business and Human Rights andinternational rights treaties.“We call on the Thai government to comply withrecommendations and set up such a mechanism,together with other measures to ensure fulladherence to the three pillars of the [UN] guidingprinciples, and obligations of the government andThai state agencies to protect and respect humanrights and remedy human rights abuses in trans-

boundary investment,” the statement read.There are at least nine Thai funded developmentscausing disruption to communities in the Daweidistrict in Myanmar's Tanintharyi region,according to Thant Zin, head of the DDA.There has been widespread local opposition to theDawei Special Economic Zone (SEZ) devel-opment, backed by Thai construction companyItalian-Thai Development Corporation. Reportssuggest up to 43,000 people could be effected byland confiscations and environmental destructioncaused by the project.

Source : Myanmar Business Todayhttp://www.mmbiztoday.com/articles/groups-call-myanmar-and-thai-governments-ensure-responsible-investment-dawei

06 March 2017

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PwC | March 2017

NewspapersMyanmar Business Today Top Thai Estate Developer Hemaraj Says

Investment in Myanmar ‘Possible’

Thailand's largest industrial estate developer,Hemaraj Land and Development Pcl, expects toboost its land sales by nearly 70 percent this yearas government measures to promote investmentin the country's eastern seaboard brings in morebuyers.Southeast Asia's second-largest economy, whichhas seen its growth lag that of its peers since thearmy took power in 2014 due to weak exports anddomestic demand, has said it hopes to attractprivate investment of about $34 billion for its"Eastern Economic Corridor" developmentproject (EEC).The government is in fact also betting on the EECplan for 2016-2020 to help the economy grow atan annual 5 percent, after last year's 3.2 percentrate.The EEC is "positive for investment", said DavidNardone, an executive director at Hemaraj. "It's agood thing that they are looking to enhance infra-structure."Hemaraj - acquired last year by top Thai ware-house developer WHA Corp Pcl - aims to hikeland sales to 1,400 rai (554 acres) from 830 rai

worth 2.43 billion baht ($69.5 million) a year ago,Nardone told Reuters last Wednesday.Hemaraj, which secured a deal last year to build a$1 billion industrial zone in Vietnam, is looking tosee if there are more investment opportunities inthe region."Cambodia is a small market with land pricesquite high," Nardone said. "Myanmar is possible,but the scale of investment there remains small,which does not match us yet."

Source : Myanmar Business Todayhttp://www.mmbiztoday.com/articles/top-thai-estate-developer-hemaraj-says-investment-myanmar-possible

06 March 2017

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PwC | March 2017

NewspapersEleven Myanmar

MCEA signs MoU with Surbana Jurong on low-cost housing

Myanmar Construction EntrepreneursAssociation (MCEA) has signed Memorandum ofUnderstanding with Singapore-based SurbanaJurong on low–cost and affordable housingtechnical solutions.The Ministry of Construction expects that about1million apartments will be constructed by 2031.The Surbana Jurong will assist MCEA in thedevelopment of a low cost and affordable housingprototype design that focuses on the 3Cs:Community, Connectivity and Constructability.Surbana Jurong will assist MCEA by employingtechnology that minimises construction time andcost without compromising on design, safety andfunctionality.“Surbana Jurong has built cities and shaped livesfor more than 50 years. We have participated inthe evolution of affordable housing in differentcountries. Our experience allows us to offerengineering and design solutions specific toMyanmar’s changing needs. We are delighted thatthe partnership with MCEA allows us to continueto be part of the Myanmar growth story,” Mr Teosaid at the signing ceremony.

“The signing of the MOU between MCEA andSurbana Jurong represents an exciting chapter inthe development of low cost and affordablehousing in Myanmar. With our local knowledgeand Surbana Jurong’s international experience,we hope to realise our vision of helping morepeople own their homes in Myanmar,” Mr ThaHtay said.Surbana Jurong Private Limited (SJ) is the largestAsia-based urban, industrial and infrastructureconsulting firm. Leveraging technology andcreativity, SJ provides one-stop consultancysolutions across the entire value chain of theurbanisation, industrialisation and infrastructuredomains.

Source : Eleven Myanmarhttp://www.elevenmyanmar.com/business/8217

08 March 2017

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PwC | March 2017

NewspapersEleven Myanmar

PTTEP divests 50% participating interest in Myanmar project

PTT EXPLORATION and Production has entereda partnership agreement with Total E&PMyanmar to divest its 50-per-cent participatinginterest in the Myanmar MD-7 Project, whilePTTEP remains the operator of the project.The company will collaborate with Total in theexploration and development activities in theblock, which is located in the Gulf of Mottama,part of the Andaman Sea off Myanmar. Thetransaction has been approved by the Myanmargovernment.PTTEP says seeking a strategic partner in theMyanmar MD-7 Project corresponds with thecompany’s risk-management policy. By bringingin a partner that has extensive experience indeepwater operations is expected to enhance theoverall capacity of the consortium.Somporn Vongvuthipornchai, president and chiefexecutive officer of PTTEP, said the MyanmarMD-7 Project was located in a deepwater area.“Therefore, having a partner with expertise andexperience in exploration and development ofmany deepwater projects will help us to carry outthe activity of the Myanmar MD-7 Project more

effectively. This would be in the best and mutualbenefits of both parties, and also of Myanmar.“Additionally, Total is our long-term strategicpartner, which has been co-investing in variousprojects with PTTEP for the past 30 years.”Block MD-7 covers an area of 7,798 squarekilometres. PTTEP South Asia, a subsidiary ofPTTEP, was awarded the exploration rights in2013. The project is currently under the 3Dseismic-evaluation process to assess the block’sresource potentials.

Source : Eleven Myanmarhttp://www.elevenmyanmar.com/business/8221

09 March 2017

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PwC | March 2017

3. Weekly New Tenders

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PwC | March 2017

Tenders (Myanmar Government)List

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

Invitation for Pre-qualification for Design, Build and Operate (DBO) of Mandalay’s NankadLake Waste Water Treatment Plant. Closing Date 28 April 2017.

Invitation for Cooperation in the area of Manufacturing or Residential Development of Land Under No.(3) Heavy Industries Enterprise, Ministry of Industry. Closing date 7 April 2017.

Request for Expressions of Interest for Consultant for Myanmar Flood and Landslides Emergency,Recovery Project. Closing date 7 April 2017.

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PwC | March 2017

Tenders (Multilateral organizations)List

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

Special Diagnostic and Options for Restructuring of Myanmar Foreign Trade Bank (MFTB) and Myanmar Investment and Commercial Bank (MICB) Closing date 06 April 2017.

Assessment of Fertilizer Regulatory and Value Chain Environment in Myanmar. Closing Date 22 March 2017

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PwC | March 2017

4. MIC Permitted Projects

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PwC | March 2017

MIC Permitted Projects (Meeting 2, 2017)

No. Name of Company Type of Investment Form of Investment

1 G & U (Myanmar) Fashion Company Limited (China) Manufacturing of Garment on CMP Basis

Wholly Foreign Owned

2 Shyang Peng Cheng Company Limited (Samoa)Manufacturing of Varieties of Shoes on CMP Basis

Wholly Foreign Owned

3 Dongwon M House Company Limited (Korea) Manufacturing of Upper Part of Shoes on CMP Basis

Wholly Foreign Owned

4 CMI Engineering Company Limited (Singapore)Manufacturing and Marketing of Polybag and Related Products Such as Elastic Band

Joint Venture

5Jia Long Plastic Products (Myanmar) Company Limited (China)

Processing, Production and Sale of Parboiled Rice, High Quality White Rice and Rice Products with B.O.T system

Joint Venture

6 Myanmar National Tele & Communications Co., Ltd. Nationwide Telecommunications Network and Services

Joint Venture

7 Ga Mone Pwint Co., Ltd. Leasing of Shopping Mall, Office Towers and Hotel on BOP System

Myanmar Investment

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PwC | March 2017

5. Upcoming Events

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PwC | March 2017

Upcoming Events (March 2017 to November 2017) List

Date Location Name of Event Sector Price Focus Points

29 March 2017 YangonMyanmar Supply Chain Summit

Supply Chain & Logistics

$200

Event to gain knowledge and effective techniques to grow your supply chain, manufacturing, logistics and distribution capabilities in Myanmar.

15 May 2017 YangonHospitality & TourismConference

Hospitality & Tourism

TBC

Discuss hospitality & tourism sector in Myanmar, and meet with investors and understand the investment and development opportunities in Myanmar.

30-31 May 2017 Yangon

Emerging Asia FinTech& Agent Banking Summit

Finance TBCDiscuss on the financial landscape transformation of Myanmar.

6-7 July 2017 Yangon ASEAN Ports & ShippingPorts & Shipping

1268Will covers areas of logistics & transportation.

18-19 Oct 2017 Yangon Oil & Gas Myanmar Oil & Gas Free

Opportunities and difficulties facing in Myanmar Oil & Gas Industry as it embarks on its exciting new phase of growth.

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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.

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PwC Myanmar Business Intelligence Publication

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

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