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PwC MyanmarWeekly Business Intelligence
Issue 7813 October 2017
www.pwc.com/mm
PwC | October 2017
1. Weekly Key Financial & Business News
2
PwC | October 2017
Weekly Key Financial & Business NewsHeadlines
No FDI in three sectors this fiscal year
ASEAN’s largest packaging firm to start Thilawa operations next year
Oil and gas contracts will be revoked unless exploration is carried out
DUHD Seeks Investment to Restart Housing Projects
3
FDI in Myanmar Tops 4 bln USD in First Half of FY 2017-18
PwC | October 2017
Weekly Key Financial & Business NewsHeadlines
Investments needed to develop Yangon’s status as regional trade hub
Singapore investors channeling private equity to Myanmar SMEs
Belt and Road shields Myanmar from Beijing’s capital crackdown
Yangon industrial zone gets $4.5m water project
4
Elite Company joins LPG race
PwC | October 2017 5
ASEAN’s largest packaging firm to start Thilawaoperations next year
Kian Joo Group, the largest packaging business inASEAN, is investing in a packaging plant in theThilawa Special Economic Zone (SEZ).Construction of the plant is expected to becomplete by the first quarter of next year.Malaysia-based Kian Joo is one of the biggest canmanufacturers within ASEAN, manufacturing awide range of products and providing packagingservices. The group has manufacturing facilities inMalaysia and Vietnam, with its internationalprocurement and marketing centre in Singapore.Kian Joo first expanded into Thilawa in early2015. The company set up Kianjoo Can Myanmar(KJMM) and Boxpak Myanmar (BPMM) with aninitial capital of US$16 million and $7.5 millionrespectively for the Thilawa project. The totalinvestment cost is expected to amount to $75million for KJMM and $38 million for BPMM.At a time of rising demand and promising growthprospects in Myanmar, KJMM will manufacturetin cans, aluminium cans, carry out originalequipment manufacturing and packing ofbeverages and milk powder, while BPMM willproduce carton boxes.
Thilawa advantageOoi Teck Huat, CFO of Kian Joo Can Factory(KJCF), cited ownership flexibility, locality,labour market and land lease as reasons foropting to set up its base in Thilawa.“We are also attracted by the fact that we are ableto have 100 percent ownership of companies weset up and we are able to have lease industrialland for 50 years with an option to renew foranother 25 years,” Ooi told The Myanmar Timesduring an interview at KJM Aluminium, one ofthe group’s manufacturing plants in the town ofNilai, which is located in the state of NegeriSembilan, Malaysia.Mr Ooi added that the tax incentives and labourmarket in Thilawa are attractive. Geographically,the SEZ is close to the port, which is important forthe business because most of the raw materialshave to be imported.
Source: Myanmar Timeshttps://www.mmtimes.com/news/aseans-largest-packaging-firm-start-thilawa-operations-next-year.html
NewspapersMyanmar Times
09 Oct 2017
PwC | October 2017 6
No FDI in three sectors this fiscal year
As of September of this fiscal year, oil and gas,mining and construction sectors had not yet seenan inflow of foreign investments, according to theDirectorate of Investment and CompanyAdministration.The total foreign investments in energy,agriculture, livestock and fishery, manufacturing,transport and communication, hotel and tourism,real estate, industrial development and otherservices sectors has reached more than US$4billion (5.4 trillion kyat). Oil and gas sector hasseen the biggest foreign investments while theconstruction sector sees the lowest foreigninvestments.According to the second five-year NationalDevelopment Plan (2016-2017 to 2020-2021), thegovernment plans for increased export volume byinviting foreign investment, promoting theprivate sector, transforming regionaldevelopment projects into the commercial onesand ensuring private investments that benefit thepeople.Under the plan, the government would reviewrestrictions that hamper the inflow of foreign
investments, reduce costs and land prices, ensureaccess to electricity and develop transportinfrastructure.In addition, the government would encourage themassive influx of foreign investments bydeveloping local financial systems and monetarypolicies, creating investment opportunities, givingthe nod for JV, BCC, BOT and investments inregional development projects.From 1988-1989 to 2004-2005 fiscal year, thetotal FDI reached nearly US$7751.4 million,$6065.7 million in 2005-2006 FY, $719.7 millionin 2006-2007 FY, $205.7 million in 2007-2008FY, $984.8 million in 2008-2009 FY, $329.6million in 2009-2010 FY, $19999 million in 2010-2011 FY, $4644.5 million in 2011-2012 FY,$1419.5 million in 2012-2013 FY, $4107.1 millionin 2013-2014 FY, $8010.5 million in 2014-2015FY, $9481.3 million in 2015-2016 FY, $6649.8million in 2016-2017 FY, $4137 million in 2017-2018 FY.
Source: Elevenhttp://www.elevenmyanmar.com/business/11907
NewspapersEleven
09 Oct 2017
PwC | October 2017 7
Oil and gas contracts will be revoked unless exploration is carried out
Energy firms with permission to conduct offshoreoil and gas exploration activities in Myanmar willhave their contracts cancelled next year if they donot progress from the initial study period toactual exploration, sources from the Ministry ofElectricity and Energy told The Myanmar Times.The contracts will be rescinded if these firms donot proceed according to the contract terms.”Theycan stop if they don’t want to continue. If theywant to drill, they will have to drill by next yearand if they don’t drill, we will revoke the contract.If they want to conduct further surveys withoutdrilling, they can also do so,” the sources said.International oil and gas companies are givenpermission to explore for oil and gas in Myanmarafter signing Production Sharing Contracts (PSC)with State-owned Myanma Oil and Gas Enterprise(MOGE), which controls the rights to thecountry’s offshore oil and gas blocks. The lastPSCs were signed during 2014 and early 2015.Starting from 2015, the companies were grantedstudy periods of up to one year for shallow waterblocks and two years for deep water blocks.Since then, the one-year study periods for
shallow-water firms have already expired in 2016,while the firms with two-year study periods willexpire by the end of 2017. “If they fail to honourtheir commitments going forward, the financialguarantees deposited at the Ministry of Electricityand Energy will be forfeited,” the sources said.During the study period, firms will have toconduct surveys according to their commitments,which were submitted during the tender biddingrounds.The study period is followed by theexploration period of up to six years. During thisperiod, surveying activities, which include seismictests, processing and interpretation have to bedone before a location to drill is selected.There are many companies which haveimplemented the study period , including ShellMyanmar Energy Pte Ltd, WoodsideEnergy(Myanmar), ENI Co, BG Asia Pacific andStatoil.
Source: Myanmar Timeshttps://www.mmtimes.com/news/oil-and-gas-contracts-will-be-revoked-unless-exploration-carried-out.html
NewspapersMyanmar Times
10 Oct 2017
PwC | October 2017 8
DUHD Seeks Investment to Restart Housing Projects
The Ministry of Construction’s Department ofUrban and Housing Development (DUHD)announced on September 3 that it has invitedprivate developers to participate in two affordablehousing projects in Yangon, in an effort to keepthe projects viable.The government-backed projects to buildthousands of affordable apartments in Yangonwere put on hold earlier this year because of ashortage of funds.Construction at two $455m projects in Ayeyarwonand Yadanar, comprising 49 high rise buildings,have been suspended since early this year, theDepartment of Urban Housing and Developmentsaid.The projects, launched in 2012, aim to provide al-most 20,000 apartments for a unit cost of K60m,to house approximately 100,000 people. Officialsfrom DUHD said the projects, which are 40%complete, are part of a pledge by DUHD to buildup to 1 million housing units in Myanmar’s mostpopulated areas by 2031.Any interested developers can hold formal talkswith DUHD officials at two project areas in Dagon
Seikan Township.State owned Singaporean firm Surbana, acting asa consultant for the two affordable housingprojects, signed a deal to advise Myanmar’s con-struction industry as it attempts to build one mil-lion ‘affordable’ homes by 2031, under a schemetrumpeted by the NLD-led government.The Myanmar subsidiary of Surbana, Jurong, willbe the lead technical consultant for the low costand affordable projects to the Myanmar Construc-tion Entrepreneurs Association (MCEA), after thetwo parties signed a memorandum of under-stating early this year.Surbana International Consultants (Myanmar)says it will “assist MCEA by employing technologythat minimizes construction time and costs with-out compromising design, safety andfunctionality.”
Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/duhd-seeks-investment-restart-housing-projects
NewspapersMyanmar Business Today
10 Oct 2017
PwC | October 2017 9
FDI in Myanmar Tops 4 bln USD in First Half of FY 2017-18
Foreign Direct Investment (FDI) in Myanmartotaled over 4.3 billion U.S. dollars in first half ofFiscal Year 2017-2018, increasing by 3 billiondollars compared to the same period of FiscalYear 2016- 2017, the official Global New Light ofMyanmar reported Saturday.FDI usually enters into the country's agricultural,livestock and fisheries, manufacturing, power,transport and communication, hotel and tourismand real estate sectors.Meanwhile, nine foreign enterprises with 403million dollars to create 3,200 job opportunitieshave been recently permitted by the MyanmarInvestment Commission (MIC).The MIC mainly grants permits for investment in10 prioritized sectors - agriculture, livestockproduction, breeding and production of fisheryproducts, export promotion industries, importsubstitution industries, power sector, logisticsindustries, education, health, construction of af-fordable housing and establishment of industrialestates.In FY 2016-2017, the country attracted over 6.8billion dollars foreign investment with the trans-
port and communication sector topping with 3.08billion dollars.In accordance with the Foreign Direct InvestmentPromotion Plan (FDIPP), the country is expectingabout 6 billion dollars of FDI in FY 2017- 2018,aiming to reduce poverty and to promoteeconomic development in the country.
Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/fdi-myanmar-tops-4-bln-usd-first-half-fy-2017-18
NewspapersMyanmar Business Today
10 Oct 2017
PwC | October 2017 10
Singapore investors channeling private equity to Myanmar SMEs
Credera Group, a Singapore private equity (PE)firm, is raising a $100 million PE fund to invest ingreenfield ventures in the finance, manufacturingand consumer product sectors in Myanmar,according to DealStreetAsiaThe PE firm is currently in advanced talks withstakeholders in those areas and “a lot of the dealsare getting closer to fruition,” Gaurav Manghnani,CEO of Credera Group was reported as saying.Despite over 250 microfinance institutions andbanks in the country, small and mediumenterprises (SMEs) in Myanmar often facechallenges in obtaining the funds they need toexpand owing to stringent bank loan regulationsand under-developed financial infrastructure.It is this gap in the SME lending space thatCredera Group is betting on. Currently, the PEfirm is already in the process of teaming up withan Indian non-banking financial company as astrategic partner to co-invest and set up anequipment finance venture in Myanmar.It also sees opportunities in the importsubstitution space, saying that the most lucrativeinvestments can be found in this sector. It is
currently looking to set up a sugar factory inKaren State and is also been evaluating possibleinvestments in the cement manufacturing sector.Education and healthcare are two other spaces ofhigh interest to Credera Group. DealStreetAsiareports that the PE firm has looked into a coupleof deals in the higher education space and is likelyto expand its venture with a young professionalteam of entrepreneurs of Myanmar.In the healthcare space, Manghnani said Crederais more interested in niche services thanhospitals. It is reported to be searching for apotential local partner to invest in this space aswell as operating partner that understands thedynamics of Myanmar.
Source: Myanmar Timeshttps://www.mmtimes.com/news/singapore-investors-channeling-private-equity-myanmar-smes.html
NewspapersMyanmar Times
11 Oct 2017
PwC | October 2017 11
Investments needed to develop Yangon’s status as regional trade hub
Plans are underway for Yangon, Myanmar’slargest city, to be developed into a regionaleconomic and trading hub, Yangon Region ChiefMinister U Phyo Min Thein told representativesfrom the Oxford Business Group (OBG) onOctober 9.There are opportunities for Yangon to become agateway hub for its landlocked neighbours byenabling them to gain access to internationalmarkets through the Port of Yangon, for example.The city can also leverage on its status as thecountry’s commercial and trading hub to drawbusiness activity and growth.To achieve this, the city will need to invest inimproving its current transportationinfrastructure, U Phyo Min Thein told OBG. Theresearch firm met with the chief minister as partof its work on a fifth in-depth report on theMyanmar economy.Yangon’s infrastructure has not kept up with itsgrowing population, and this is now puttingpressure on the city’s management and publicservice providers, said U Phyo Min Thein. Trafficcongestion is a major problem as a result of poor
road connectivity and conditions, for example.So far, the Yangon government has alreadylaunched a centralised city bus and water taxinetwork to provide commuters with an affordablemeans of transport, while work on upgrading itsCircular Train System is expected to start soon.Industrial opportunityYangon can also raise its attractiveness as anindustrial and manufacturing hub by expandingexisting production and storage capacities, UPhyo Min Thein said.In fact, the Yangon government is planning tocreate twelve new industrial zones in the region toboost manufacturing and attract investments, hesaid at the Union of Myanmar Federation andChamber of Commerce and Industry meeting lastweek.
Source: Myanmar Timeshttps://www.mmtimes.com/news/investments-needed-develop-yangons-status-regional-trade-hub.html
NewspapersMyanmar Times
11 Oct 2017
PwC | October 2017 12
Belt and Road shields Myanmar from Beijing’s capital crackdown
BEIJING’S recent crackdown on outboundinvestments does not affect Myanmar because ofits involvement in the Belt and Road Initiative(BRI). The sectors targeted by the restriction donot concern investment projects here, which aremostly infrastructure and energy-related.The Chinese government is blacklistingbusinesses which violate foreign investment rulesas part of a broader crackdown on “irrational andunauthentic” overseas acquisitions, stated China’sstate-run China Daily on September 14.In recent months, the Chinese government hasstroke against highly acquisitive privateenterprises and has criticised some of the mostrenowned companies which acquired massiveforeign assets.The Financial Times argued on August 9 that thecrackdown on overseas investments has resultedin uncertainty in private sectors as to what M&Aactivities are permitted.Chinese M&A leaders – conglomerate HNAGroup, real estate and entertainment giant DalianWanda, insurance leader Anbang and consumerconglomerate Fosun – have been targeted by
“well-placed leaks and state media innuendo”,according to the FT. Anbang’s chair Wu Xiaohuihas been detained by the authority since June.Data from Dealogic suggested that HNA Group,Dalian Wanda and Anbang were among the topsix overseas buyers. The three giants, togetherwith Fosun, accounted for almost a fifth of China’soverseas purchases in 2016.The Myanmar Times has not found directinvolvement of the four companies in any large-scale investments in Myanmar.No impact on MyanmarExperts told The Myanmar Times that Beijing’scrackdown on acquisitive conglomerates torestrict capital outflows does not target Belt andRoad projects and is not expected to affectinvestments in Myanmar. In contrast, M&Aactivities linked to President Xi Jinping’ssignature foreign policy are surging.
Source: Myanmar Timeshttps://www.mmtimes.com/news/belt-and-road-shields-myanmar-beijings-capital-crackdown.html
NewspapersMyanmar Times
11 Oct 2017
PwC | October 2017 13
Yangon industrial zone gets $4.5m water project
Yangon Regional Chief Minister U Phyo MinThein approved a US$4.5 million (K6.14 billion)water purification project funded by the UnitedNations Industrial Development Organization(UNIDO) for Shwe Lin Ban industrial zone.“The United Nations Industrial DevelopmentOrganization observed factory zones in Myanmarfor three years. Our zone has been selected for theimplementation of the purification project,” saidU Aye Thaung, president of Shwe Linn Banindustrial zone committee, meeting once everythree months, on October 11,Yangon government has approved UNIDO’s aid toimplement the water purification project at theShwe Lin Ban industrial zone, located in HlaingTharyar township, as a pilot project. The startingdate remains to be communicated, said U AyeThaung.He also warned factory owners of polluting waterin the vicinity, which leads to foul smell andsmoke that damages the environment. Thisrelates to the banning of hundreds of liquorfactories nationwide as part of the government’sstrategy to protect the environment.
Yangon City Development Committee’s (YCDC)officer in charge of population control andcleansing department U Maung Maung Lwin, saidthose disobeying the rules on environmentalprotection can be fined.“Earlier there were no problems as there wereonly a few factories and they were new. Now thefactories must repair their waste managementsystem if it affects the workers and public,” U AyeThaung said.He added, that only a few factories generate wastewater and are responsible for the pollution.The Shwe Lin Ban industrial zone, which wascreated 12 years ago, comprises over 300factories.
Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-industrial-zone-gets-45m-water-project.html
NewspapersMyanmar Times
13 Oct 2017
PwC | October 2017 14
Elite Company joins LPG race
Elite Company has been granted permission todistribute Liquefied Petroleum Gas (LPG) inMyanmar, director of State-owned MyanmaPetrochemical Enterprise (MPE) U Aung Myinttold The Myanmar Times after a press conferenceon October 12.LPG is a flammable mixture of hydrocarbon gasesused as a substitute for electricity in cooking.Elite Company will start importing LPG by theend of this year, after construction of its LPGstorage tank and jetty at the Thilawa SpecialEconomic Zone (SEZ) is complete. After safetyinspections are carried out by the Ministry ofElectricity and Energy (MOEE), it will issue therelevant license permitting Elite Company toimport and distribute LPG.“We’ve reached most of agreements for signingcontract. But we will need to negotiate further fordetails,” said U Aung Myint.Owned by the son of Pyithu Hluttaw speakerThura Shwe Mann, Elite Company is the secondcompany that has been granted permission toimport and distribute LPG in the country inrecent months.
Last month, State-owned Parami Energy ServiceCo beat nine other firms to win the rental tenderfor the government’s No.1 Refinery in Thanlyin.Unlike Elite Company, which is building its ownstorage facilities, Parami Energy is hiring agovernment-owned storage tank and jetty forK6.4 billion under a one-year contract.A third firm, APEX Co, already has a jetty and hasrecently been permitted to do business, U MyintAung said. After getting a recommendation fromthe Yangon Region Government, the firm willstart implementing its operations. Thegovernment is currently considering allowinganother firm, Myanmar LPG Company, to beginoperations, The Myanmar Times understandsThe government is aiming to replace electricitywith LPG as a fuel for household cooking. Ifwidely used, LPG can reduce the use of firewoodas well as electricity, which will help to conservethe environment
Source: Myanmar Timeshttps://www.mmtimes.com/news/elite-company-joins-lpg-race.html
NewspapersMyanmar Times
13 Oct 2017
PwC | October 2017
2. Weekly Investment News
15
PwC | October 2017
Weekly Key Investment NewsHeadlines
Myanmar-focused PE firm Credera looks to set up greenfield ventures in finance, healthcare and education
Myanmar insurance players eye JVs with global firms as sector prepares to open up
Myanmar group Dagon International takes 14% stake in Burst Networks’ data centre
16
TPG divests 50% stake in Myanmar Distillery Company to Thai Beverage
Transparent information flow key to uptick in M&A deal flow in Myanmar: Thura Swiss
PwC | October 2017 17
Myanmar-focused PE firm Credera looks to set up greenfield ventures in finance, healthcare and education
Credera Group, currently raising a $100 millionprivate equity fund focused on Myanmar, isbetting on strategic greenfield ventures in finance,manufacturing and other consumer spaces toforge new deals in the country. The PE firm is inadvanced talks with stakeholders in theseidentified areas, said Gaurav Manghnani, CEO,Credera Group. “We remain committed (toMyanmar), We have been working on these dealsand a lot of them are getting closer to fruition,” headded, speaking to DEALSTREETASIA on thesidelines of the Asia PE-VC Summit 2017. As apre-consumer market, Myanmar is still in theprocess of building its infrastructure. It is,therefore, a challenge for investment firms to findpromising startups that need growth capital orare ready to be acquired. Credera sees the gap inthe SME lending space in Myanmar as a bigopportunity. Despite over 250 microfinanceinstitutions and banks, SMEs in the country oftenfind it difficult to secure loans to further theirgrowth. “We are getting very close to puttingtogether our NBFC deal structure,” saidManghnani. The PE firm is in the process of
teaming up with an Indian NBFC as a strategicpartner to co-invest and set up an equipmentfinance venture in Myanmar. “We will shortly beapplying to the central bank for the necessarypermissions,” he said. Potential for importsubstitution Credera Group also finds the area ofimport substitution in Myanmar having “infinitepotential.” “I think the most lucrative investmentsand the biggest need for Myanmar first is importsubstitution,” Manghnani said. The firm hasundergone advanced discussions with theleadership in Karen state and is looking forwardto potentially set up a sugar factory in the region.It has also been evaluating possible investmentsin the cement manufacturing sector but a decisioncould take more time due to the slowdown inconstruction related work across the country.
Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmar-focused-pe-credera-group-close-nbfc-deal-structure-looking-import-substitution-healthcare-edu-spaces-83685/
NewspapersDeal Street Asia
09 Oct 2017
PwC | October 2017 18
Myanmar insurance players eye JVs with global firms as sector prepares to open up
As Myanmar stands on the verge of liberalisingthe insurance sector, local players are ready toforge ventures with global companies to cash inon the potential of the under-served market.Myanmar, which allowed private insurancecompanies to enter the market in 2013, iscurrently represented by one state-owned player(Myanma Insurance), 11 private firms while 20foreign firms have representative offices in thecountry. It is a “wait and watch” period as it is notclear if Myanmar would allow foreign companiesto enter via the joint venture route or open up thesector for 100 per cent foreign investment. Adecision is expected by the year-end with 2018-19seen as the timeline for the space to open up.From the regulatory side, the Insurance BusinessRegulatory Board (IBRB) – which controls rating,policy terms and conditions, and commissions –was set up in 2016 led by the deputy minister ofthe Ministry of Planning and Finance. TheMyanmar Insurance Law passed in 1993 is also inthe process of getting amended. Majority of localinsurance companies have indicated that theyprefer foreign companies to join the market
through a JV set up. Local companies havealready started preparing for the insurance sectorreforms with a few of them inking Memorandumof Understanding for technical collaboration andknowledge sharing with foreign counterparts.Citizen Business Insurance Public Ltd has signedan MOU with Thailand’s Muang Thai LifeAssurance Public Company and Canadianinsurance firm Manulife Financial Corporation.Grand Guardian Insurance Public Co Ltd isknown to have signed an MoU with Tokio MarineAsia. “As CB, we have decided to enter a JV withsomebody. We are looking out for the rightpartner,” said Thaung Han, managing director ofCitizen Business Insurance Public Ltd.
Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/local-insurance-cos-open-jv-opp-country-verge-liberalizing-sector-83790/
NewspapersDeal Street Asia
10 Oct 2017
PwC | October 2017 19
Myanmar group Dagon International takes 14% stake in Burst Networks’ data centre
Myanmar conglomerate Dagon InternationalLimited has picked up 14 per cent stake inbroadband and data services provider BurstNetworks’ Thilawa data centre project, a topexecutive of Dagon said. Burst Networks isplanning to build Myanmar’s first tier IV datacenter in Thilawa Special Economic Zone (SEZ) inYangon region. Dagon International made thisinvestment in the firm about eight months ago.“We are interested to invest in companies(including tech-based firms) that could createsynergies to our main business,” said ThuraneAung, CEO of Dagon International during aninteraction with this portal. Aung declined todisclose the quantum Dagon invested in Burst. Hesaid, Burst recently had secured a networkfacilities service (individual) licence from theMinistry of Transport and Communications. InAugust 2016, Burst received the approval of theMyanmar Investment Commission to build aneCentre and provide services like hosting, co-location, broadband, unified communicationservices. Burst is also planning to position itself asa major player in operating satellite services.
DEALSTREETASIA reported last year that BurstNetwork was raising $12 million out of which theyplan to use $8 million for the data center, civilworks and satellite equipment. The remaining $4million will be for the operations, expandingsatellite and wi-fi networks in Myanmar.It has received commitments from existingpartner Campana, for civil works and installationfrom Flexenclosure while 1-Net Singapore willreportedly support Burst’s data center. DagonInternational, a subsidiary of Dagon Group ofCompanies, was established in 1990 by Win Aung,chairman of the group. Having 15 membercompanies, the group is a major player in realestate, construction & engineering, hospitalitymanagement, retail, food, agriculture, petroleumand power. Thurane Aung said, their group isfocussed on three sectors: logistics, food andpower.
Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/dagon-international-takes-14pc-stake-burst-networkss-data-center-work-thilawa-84013/
NewspapersDeal Street Asia
12 Oct 2017
PwC | October 2017 20
TPG divests 50% stake in Myanmar Distillery Company to Thai Beverage
U.S. headquartered private equity major TPG onFriday said that it had exited Myanmar’s largestspirits maker by selling its 50 per cent stake toThai Beverage Public Company Limited. Nofinancial terms were disclosed. Thai Beverage isamong Asia’s leading spirits groups. The FortWorth, Texas-based firm had paid between $100million and $200 million to internationalinvestors to buy half of Yangon-based MyanmarDistillery Co (MDC) that is known for brands suchas Grand Royal Whisky and Hero Whisky, inNovember-December 2015. Founded in 1995,MDC is the largest spirits company in the country,and produces whiskey, rum, gin and wine coolers,which are sold through 1,300 wholesalers andover 20,000 retailers. It currently employs morethan 2,500 staff, and has manufacturing facilitiesin Yangon and Mandalay. MDC was the privateequity firm’s second investment in Myanmar. TPGhad earlier invested in Apollo Towers, and sincethen, the latter had received additional support,including a long-term financing facility from theOverseas Private Investment Corporation. Itsother investments in Southeast Asia include
8990, BFI Finance, PropertyGuru, and VietnamAustralia International School. “When weinvested in MDC, we were excited to bepartnering with a market leader that had anexperienced management team and an extensive,nationwide network. TPG was pleased to have hadan opportunity to support them and introducenew initiatives to improve operations andearnings in areas such as lean manufacturing, e-procurement and branding. These initiativesresulted in considerable growth in the businessover a short period of time,” GanenSarvananthan, Partner at TPG, said in astatement.
Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/tpg-divests-stake-in-myanmar-distillery-company-to-thai-beverage-84112/
NewspapersDeal Street Asia
13 Oct 2017
PwC | October 2017 21
Transparent information flow key to uptick in M&A deal flow in Myanmar: Thura Swiss
While the intensity of deal-making may be lowercompared to other Asian economies, Myanmardoes have an active pipeline and many sectors areflush with opportunities, according to Yangon-based advisory firm Thura Swiss vice-president(business development) Nicholas Thibeault. Someof the main hurdles to deal-making include lack oftransparent information flow and policyframeworks. The M&A scene is expected to bemore buoyant with the Companies Actamendment, that will define foreign-ownedcompanies as those where foreign ownershipexceeds 35 per cent. This will make it much moreeasier for local companies to attract internationalfunding and expertise. In an interview withDEALSTREETASIA, Thibeault talks aboutMyanmar’s M&A scene, challenges to deal-making and the importance of capacity buildingon valuation matrix. Thura Swiss is in the processof helping Swiss-based startup enabler, SeedstarsGroup, for capital raising and market entry whileit is also currently offering M&A advisory toforeign and local companies in the logistics, oiland gas and construction sectors.
The intensity of deal making is obviously lower atthe moment than that of other South East Asiancountries. However, there are plenty of dealshappening and plenty more in the pipeline. ManyMNCs and investors are intrigued by Myanmar asa last frontier economy but are not necessarilyready to deploy capital here as they still see risk astoo high. However, private equity with a largerrisk appetite have opened offices in Myanmaralong with an increasing number of local funds,who are much further along in the process andare able to effectively source deals. As an advisoryfirm, we are trying to increase the intensity byworking with local companies that we think areattractive, while advising inbound investors onthe opportunities available and supporting themthrough the process. Currently, there is adisconnect between what foreign entrants expectand what is realistic regarding ticket size, dealprocess and availability of information.
Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmar-expects-see-leverage-ma-near-term-82042/
NewspapersDeal Street Asia
13 Oct 2017
PwC | October 2017
3. Weekly New Tenders
22
PwC | October 2017
Tenders (Myanmar Government)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/ .
23
No applicable Tenders announced for the week ending 13th October 2017
PwC | October 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
24
Strategies for Financing Social Protection to Achieve Sustainable Development Goals in Developing Member Countries, Closing Date : 20th Oct 2017
SC 109709 MYA: Housing Market Study in Yangon Region (Financial Sector Specialist), Closing Date: 16th Oct 2017
SC 109706 MYA: Housing Market Study in Yangon Region (Housing Finance Specialist), Closing Date: 16th Oct 2017
SC 109708 MYA: Housing Market Study in Yangon Region (Legal Expert), Closing Date: 16th Oct 2017
SC 109710 MYA: Housing Market Study in Yangon Region (Legal Expert), Closing Date: 16th Oct 2017
PwC | October 2017
4. MIC Permitted Projects
25
PwC | October 2017
MIC Permitted Projects (Meeting 14, 2017)
26
No. Name of Company Type of Investment Form of Investment
1 International Bulk Terminal (Thilawa) Co., LtdConstruction and operation of a river port terminal and related warehouse, silo and other logistics facilities
Joint Venture
PwC | October 2017
5. Upcoming Events
27
PwC | October 2017
Upcoming Events (October 2017) List
Date Location Name of Event Sector Price Focus Points
12-14 Oct 2017 Yangon Mining Myanmar Mining Free
This event showcases product from Minerals, Metals & Ores industry. This event showcases product from Minerals, Metals & Ores industry. like will provide companies with opportunities to see first-hand the potential in Myanmar's Mining sector.
12-14 Oct 2017 YangonElectric, Power & Renewable Energy
Power Free
Showcases product from Electronics & Electrical Goods, Power & Renewable Energy industries etc. in the Electronics & Electrical Goods, Power & Renewable Energy industries.
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.
28
PwC | October 2017
Upcoming Events (November 2017) List
Date Location Name of Event Sector Price Focus Points
09-11 Nov 2017 Yangon Myanenergy Energy Free
Show exhibits a wide range of latest technology aided products and equipment related to the power industry. The leading industrialists will be present in this show to exhibit the respective range of modernized and productive range.
23-25 Nov 2017 Yangon Myanwater Water Free
Will provide a platform to the technical and professional experts related to waste management industry. Attendees will get a scope to improve and enhance their knowledge by attending this international trade show
29 Nov 2017 YangonMyanmar Satellite Forum & Exhibition
Technology $750
An opportunity for the global and regional satellite industry to meet with invited guests from Myanmar in broadcasting, B2B, government and homeland security. The Forum is part of the CommuniCast Myanmar event.
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© 2017 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 [email protected]
Brandon [email protected]
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