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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
SEIZING OPPORTUNITIES
IN MYANMAR
MATRADE Yangon
10 August 2015
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
1.0 Economic Development
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• Recent developments – relaxation of export and import licence requirements;
– introduction of the Myanmar Investment Law and Competition Law;
– setting-up of a national trade portal;
– enrolling for the Extractive Industries Transparency Initiative (EITI);
– joining the Open Government Partnership (OGP);
– implementation of Health insurance;
– imminent establishment of the Yangon Stock Exchange;
– launching of the National Export Strategy (NES);
– deployment of mobile inspection teams at various check-points and border crossings; and
– awarding of licences for foreign banks to operate in Myanmar.
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
2.0 Why Myanmar Myanmar’s strategic potential
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52 Million
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
2.0 Why Myanmar Myanmar’s Economic Potential
1. GDP Growth
– Potential to achieve USD200 billion+ GDP in 2030, over four times as high
as today
– Average economic growth of 8.25 per cent over the next few years (IMF
forecast)
2. Expansion of the Consumer Class
– Consumer spending potentially tripling from USD35 billion to USD100
billion in 2030
– Consuming class of 19 million in 2030 from 2.5 million in 2010
3. Foreign companies coming in
– Influx of foreigners and factories, (Coca-Cola, GE, KFC, Colgate)
– Myanmar has garnered the interest as the last frontier market
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
2.0 Why Myanmar Myanmar’s Economic Potential
4. Country is in dire need for infrastructure and
human resources development – Telecommunications, infrastructure, logistics, air networks, training and
vocational skills needed
– Opportunities for Malaysian companies to share expertise and
international experience
5. Reforms going in the right direction – Government is making strides in improving transparency (Open
Government Partnership)
– Going towards the ASEAN Economic Community and improving
compliance with WTO
– Shifting from central state-owned economy to market oriented economy
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
Malaysia’s Major Exports to Myanmar 2014
• Petroleum Products USD 285mil/35.4%
• Palm Oil USD 164mil/20.4%
• Chemicals & Chemical Products USD 103mil/12.7%
• Processed Food USD 36mil/4.4%
• Machinery, Appliances & Parts USD 36mil/4.4%
Total Exports 2014: USD 805.4 million
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
Malaysia’s Major Imports from Myanmar 2014
• Agricultural products USD 47mil/28.3%
• Crude natural rubber USD 30mil/18.1%
• Seafood, fresh, chilled or frozen USD 22mil/13.2%
• Sawn timber USD 17mil/10.0%
• Processed food USD 15mil/8.9%
Total Imports 2014: USD 166.8 million
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION 14
NO. COUNTRY AMOUNT (US$ MIL) PERCENTAGE (%)
Total 56,618.117 100.00
1 China 14,778.698 26.10
2 Thailand 10,285.681 18.17
3 Singapore 10,249.389 18.10
4 Hong Kong 7,176.199 12.67
5 United Kingdom 4,051.858 7.16
6 Republic of Korea 3,374.699 5.96
7 Malaysia 1,657.688 2.93
8 The Netherlands 981.991 1.73
9 India 727.689 1.29
10 Viet Nam 688.586 1.22
Source: Directorate of Investment and Company Administration (DICA), Myanmar
3.0 TOTAL INVESTMENTS INTO MYANMAR
BY COUNTRY (AS OF 30 JUNE 2015)
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
4.0 Investing in Myanmar
• Focal point is the Directorate of Investment and Company Administration (DICA)
• Promoted sectors – Agriculture
– Mining
– Oil and gas
– Hotel and tourism
– Power / electricity generation
• Introduced Foreign Investment Law in 2012 to promote FDI
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
5.0 Business Opportunities in Myanmar Potential sectors
Construction & Building Materials
• The construction sector is expected to expand at an annual rate of at least 8% over
the next five years. The industry is valued at $3bn, with the residential segment
accounting for half the sum.
Power
• Myanmar’s annual electricity consumption rate is expected to increase 13% per year,
currently totalling 4,362 MW. Currently, only 30% of Myanmar’s population have
access to electricity with frequent power cuts.
Human resources development
• Myanmar is facing a shortage of trained and capable labour in a range of industrial
sectors that could undermine the nation’s development prospects. The country’s
demand for skilled workers is expected to reach a level equal to almost half the
population by 2015.
Oil & Gas
• Myanmar has 7.8 trillion cubic feet of proven natural gas resources worth about
USD75 billion waiting to be discovered.
• 20 offshore and 25 onshore blocks awarded
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
5.0 Business Opportunities in Myanmar Potential sectors
Pharmaceuticals and Medical Devices
• The pharmaceutical and medical equipment market in Myanmar is expected to grow
to USD800 million by 2020
Hotel & Tourism
• The tourism boom, which brought in a record number of 1 million tourists into
Myanmar in 2012 has drawn interest from hotel owners to invest in the country.
Other potential sectors
• Information & Communication Technology (ICT)
• Electrical & Electronic Products
• Medical tourism
• Fast Moving Consumer Goods (FMCG)
• Auto parts and accessories
• Processed food
• Franchise
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
6.0 Challenges Doing Business in Myanmar
• Weak legal framework
• Limited pool of skilled and talented workforce
• High land prices
• Foreigners not allowed to own land
• Foreigners not allowed to do trading
• Competition from border trade
• Funding and technical assistance is expected
• Inadequate infrastructure
• Small quantity orders
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
7.0 Strategies Doing Business in Myanmar
• Work with consolidators in Thailand and Singapore that has direct border access / shipping lines to increase market access.
• Work with local partners, distributors and agents
• B2B initiative between chambers and business associations of Malaysia and Myanmar (UMFCCI) for joint promotion activities
• Joint-venture to set-up manufacturing base in Myanmar as gateway into neighbouring markets and the EU (under GSP scheme)
• Leverage on Maybank’s presence in Myanmar
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
8.0 ASEAN Economic Community
AEC – Is Myanmar
prepared? • Lack of awareness
• Trading restricted to
local companies
• Economy just opened
past 3 years
• Local industry is not
ready
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
Number of Tariff Lines at 0% in the ATIGA Tariff Schedule of 2013
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Trade in Goods
(Rules of Origin)
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
Flexibility on seven % (7%) of tariff lines for CLMV
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Trade in Goods
(Rules of Origin)
MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
9.0 Business Customs & Practices
• Cash based transactions still the norm
• Focus on personal relationship
• Provide technical training and
assistance, credit facility and
promotion incentives
• Culture and traditions are strongly
upheld
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
10.0 Do’s and Don’ts Doing Business in Myanmar
• Don’t take yes to mean
agreement or action
• Be realistic about your local
partner(s)
• Get to know the local culture
• Get it down in writing
• The key to success –
preparation
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
11.0 MATRADE Trade Promotion
Activities in Myanmar (2015)
MATRADE Yangon is coordinating the following activities in 2015:
• Special Projects Business Visit to Yangon & Nay Pyi Taw (23 - 27 February 2015);
• Specialised Marketing Mission on Construction & Related Services (16 - 20 March 2015);
• Specialised Marketing Mission for Construction & Building Materials in-conjunction with BuildTech Myanmar 2015 (27 - 29 May 2015);
• Specialised Marketing Mission on Tourism, Hospitality and Culinary Services (2 - 5 June 2015);
• Specialised Marketing Mission on Oil & Gas Sector (25 - 28 August 2015);
• Specialised Marketing Mission on ICT (8 - 11 September 2015); and
• Malaysia Services Exhibition & Showcase Malaysia (30 Sept - 3 October 2015).
• Incoming buying missions to Malaysia (year round)
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
12.0 How MATRADE Yangon Can Assist
• Identify potential distributors, partners for joint ventures
• Arrange business meetings and conduct basic due diligence
• Advisory services as well as the dissemination of market information, market intelligence and industry reports
• Trade promotion activities (Specialised Marketing Missions, Showcase Malaysia / Malaysia Services Exhibition (MSE), Incoming Buying Missions)
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MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION
Contact us
MATRADE Yangon
Embassy of Malaysia (Trade Section)
82, Pyidaungsu Yeikhta Road
11191, Dagon Township
Yangon, Myanmar
Tel : +95-1-230 1951 / 52
Fax : +95-1-230 1954
URL : www.matrade.gov.my
E-mail : [email protected]
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