50 MALAYSIA BUSINESS NEWSPRASARANA TO BUILD MORE BRT AT VARIOUS LOCATIONSWith the pilot project of the elevated Bus Rapid Transit (BRT) Sunway Line set to be operational by June 9 this year, Prasarana Malaysia Bhd (Prasarana) says more can be expected to be built at various locations in the future. Prasarana's Group Chairman Tan Sri Ismail Adam said being a breakthrough in Malaysia's public transport system. \"The government wants to have more of the BRT system atvarious locations,\" he told a media briefing on the BRT Sunway Line project. The BRT Sunway Line is a public-private partnership project byPrasarana and Sunway Bhd, to provide an integrated transport access to over 500,000 residents at Bandar Sunway and Subang Jaya. Theproject which costs RM634 million is 70 per cent funded by Prasarana, 15 per cent by Sunway Bhd and the rest by Unit Kerjasama Awam Swasta(UKAS), a facilitation fund. Ismail explained that the BRT is an alternative solution to an area that has no access to the light railway transit (LRT)system or other rail services. It has dedicated busways, an integrated pedestrian access, universal access facilities, bicycle racks and a rapidboarding facility to serve high service frequency. SME CORP EYES RM400 MLN POTENTIAL SALES FROM ASEAN SME SHOWCASE & CONFERENCE 2015 SME Corp Malaysia expects the business matching sessions and showcase events during the upcoming ASEAN SME Showcase and Conference (ASSC) 2015 to generate about RM400 million in potential sales.Chairman Tan Sri (Dr) Mohamed Al-Amin Abdul Majid said the ASEAN Business XchanGe Platform, to be arranged on the sidelines of ASSC 2015, would enable the small and medium enterprises (SMEs) and multinational companies (MNCs) to forge business partnerships. ASSC 2015, the first of its kind event, is a world-class, intelligent and interactive platform for SMEs to showcase their products, services and technologies for the global market and seize global networking opportunities. The three-day event beginning May 26 will be held at Kuala Lumpur Convention Centre with the theme 'One Business, One Community'. Prime Minister Datuk Seri Najib Tun Razak is scheduled to officiate the event, which is expected to draw more than 500 exhibitors and 10,000 trade visitors from the ASEAN region and beyond. | April 2015
51MALAYSIA BUSINESS NEWS AIA SEES TPM BIOTECH GROWTH APPOINTS DHAYA OPPORTUNITY IN HEALTHCARE MALAYSIA AS SOLE DISTRIBUTOR Life insurer AIA Bhd sees a growth TPM Biotech Sdn opportunity in Bhd, a wholly- Malaysia in takaful owned subsidiary and investment-linked of Techonology Park products, and intends to Malaysia (TPM) close the gap of average Corporation, has sum assured per person appointed Dhaya in the country. Chief Healthcare Sdn Bhd as Executive Officer Bill the sole distributor for Lisle said the company's its homegrown product key focus is to close the range under Herbs protection gap to an Garden brand. With this appointment, TPM Biotech is assured of average sum assured a RM2.6 million contract commitment this year for the contractper person to at least RM200,000 from RM38,500. \"Our key focus manufacturing of a selected range of Herbs Garden products.is protecting the families, then obviously medical needs, we are Deputy Minister of Science, Technology and Innovation, Datuk Drthere to provide it, retirement is becoming a global issue, and then Abu Bakar Mohamad Diah said the collaboration would facilitatetakaful,\" he told reporters after announcing AIA's 2014 financial the growth of entrepreneurship and biopreneurship through theperformance recently. He added that the company's latest result expertise and services of TPM Biotech. He added the annualreaffirmed that it was on track and well-positioned to capture key market value for the Malaysian healthcare and pharmaceuticalopportunities in the country's life insurance industry. sectors were worth RM11.9 billion and RM7 billion, respectively. Dhaya Healthcare, formed this year, is the marketing arm for AIREEN OMAR healthcare and pharmaceutical products of the Dhaya International NAMED TO Holdings Group. The group’s core business includes manufacturing '25 MOST components for air-conditioners, logistics and education. INFLUENTIAL Meanwhile, Dhaya International group executive chairman Datuk WOMEN IN Thevasagayam Ahamparam said the herbal products that will be TREASURY' LIST distributed starting next month included Misai Kucing capsules, Kacip Fatimah, Kacip Mas, Peria, Pegaga, Sweatenia, Olive Plus, AirAsia Bhd Chief Hempedu Bumi, Tongkat Ali and Herbs Garden Coffee. Executive Officer Aireen Omar GREEN RUBBER has been named one of GLOBAL TO BUILD the '25 Most Influential RM36 MLN PLANT Women in Treasury' by IN PUCHONG the inaugural Women in Treasury Summit Green Rubber held in Singapore. The Global, whichaward honours Aireen's commitment to improving the fortunes of is part ofthe company and its finance and treasury operations, said Daniel conglomerate PetraFlatt, editor of The Corporate Treasurer magazine. \"The award Group, is investing US$10is both a testament to the forward-thinking nature of AirAsia and million (US$1=RM3.68)the drive and energy of the individuals who work there,\" he said to build a new factory toin a statement. Aireen was the Director of Corporate Finance & produce green rubberTreasury for AirAsia Bhd before helming the Chief Executive Officer compounds. Petra Groupposition in 2012. The ’25 Most Influential Women in Treasury’ list is Founder and Executivecompiled to inspire more women into the business of treasury and Chairman Datuk Dr Vinodfinance, which is predominantly populated by men. April 2015 |
52 MALAYSIA BUSINESS NEWSSekhar said the construction of the new factory in Putra Industrial Park, Puchong, Selangor, would be completed within four to six monthsand slated for operations in January 2016.Vinod said the company was confident of generating a revenue of US$165 million in 2018 with aproduction capacity of 80,000 tonnes of rubber compounds to meet the demand of the industrial sector. \"By 2020, we expect to produce about105,000 tonnes of rubber compounds and target revenue to grow to US$329 million,\" said Vinod. Green Rubber Global, a wholly-Malaysiantechnology that first debuted in 1995, has been supplying the North American and European markets since 2009, counting notable brands suchas Timberland and New Balance among its customers.Vinod said the company is currently in discussions with 125 potential companies that areinterested in the green rubber compounds. GOOD REGULATORY PRACTICE VITAL FOR AEC, SAYS MUSTAPA The Malaysian government has made Good Regulatory Practice (GRP) a key priority for the ASEAN Economic Community to reflect the importance of having regional regulatory convergence. In a statement , Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said improving efficiency of policy and regulatory processes would enhance productivity among ASEAN member states. \"This will substantially reduce the regulatory burden on businesses by improving the quality of existing regulations and ensuring the quality of new regulations. \"The implementation of GRP is systemic, involving both top-down and bottom-up engagement, with an emphasis on transparency and accountability through public consultation and engagement with stakeholders and parties that will be affected by the changes, or introduction, of regulations and policies,\" he said.AIRASIA EXPANDS CONNECTIVITY TOINDIA, INDONESIA WITH 3 NEW ROUTESAirAsia announced three new routes, namely, to Visakhapatnam in India, as well as, Pontianak and Medan in Indonesia. In a statement, the low-costairline said the thrice weekly Kuala Lumpur–Visakhapatnamdirect flights would commence on May 7. The Kuala Lumpur–Pontianak and Johor Bahru–Medan flights would commenceon March 27 with twice weekly flights. Head of Commercial,Spencer Lee said as Visakhapatnam was an up and risingdestination for trade and tourism, AirAsia is confident thatthe move is timely. \"As a truly Asean airline, we are proudto announce the recommencement of the Johor Baharu–Medan direct flight, which will provide enhanced connectivityfor customers,\" he added. AirAsia is also a offeringpromotional all-in-fare of RM99 one way for the KualaLumpur–Visakhapatnam flight and available for booking fromtoday until March 22 for the travel period of May 7-March 26,2016. | April 2015
54 INVESTMENT • by Jega BaradanSHARE MARGINFINANCINGThe past few articles we have focused on the basics Over time, this investor, either through achieving great of Equity and Stock Market in Malaysia. In further success from his investments or through sheer good fortune, educating readers, this article will explain how feels he is ready to make bigger investments. He nowCommercial Banks and Investment Banks/Brokerages wishes to make a higher commitment subject to availabilityassist potential investors in increasing their investment of fund. But he does not have that extra money. So what areusing borrowed money. his options?The Journey of an Investor The options would vary - borrowing from friends and relatives, or borrow from money lenders. One safe option,Most investors invest in shares using money saved from which is still not much known among Malaysian Indiantheir income. The starting point is usually market news investors, is a facility called Share Margin Financing (SMF).about a particular new share which every uncle or aunty Share Margin Financing (SMF) as a Safe Option to Borrowwould ‘predict’ to go limit up on the first day itself. This would Moneyusually entice a rookie office worker who has saved up a bitor has just received his first bonus. Share Margin Financing (SMF) is a loan facility provided to investors to finance either investment or share trading.He will then invest his hard-earned savings on a heavily- This means that an individual investor can buy shares withdiscussed new share listing or Initial Public Offering (IPO); money borrowed from a bank or brokerage. This facility canhence, the birth of a new investor. Now, he has become one be used to apply for new issues (IPO), purchase existingof the many investors in the market who has no clues about listed shares, apply for Employee Share Options Schemestock market and entered the game just because somebody (ESOS), own rights issues of existing shareholdings or tradetold him that quick money can be made effortlessly. existing listed shares. Since this is a borrowing, it must be repaid in due course.True, investing in stock market can make quick money,effortlessly, but it is more than just listening to hearsays In Malaysia, SMF is provided by the major Commercialand putting all your hard-earned money into one basket Banks (i.e. RHB Bank, Maybank, etc.), as well as, Investmentin the hope of doubling the amount overnight. It involves a Banks (i.e. Maybank Investment, CIMB Investment, etc.)little learning about the basics with some research on the and brokerage firms (i.e. Kenanga, KAF, OSK, etc.). Thesecounters you are investing in, and where would that money institutions are regulated by either Bank Negara Malaysiayou are using to invest come from. or Securities Commission Malaysia, hence, considered safe to borrow from (at least, no illegal money lenders would be | April 2015 chasing you over defaults!).
INVESTMENT 55Qualifying for Share Margin Financing 1 Share Spread - Shares from a few companies Facility so as to spread out the price risk.Just as with any loan, an individual has to qualify to 2 Observance of Margin of Financing (MOF). This is the maximum amount of financing become a borrower. Each bank would impose criteria of allowed based on the value of the collateral provided. Typically, margin is 60%. Simple their own but a basic guide is that one must: formula for calculating MOF is as follows: 1 Have an existing CDS (Central Depository a. MOF = Total loan outstanding – collateral value System) account Total Share value2 Be of legal age b. Some lenders use the inverse of this formula but they mean the same thing3 Have clean CCRIS and CTOS report (no bad/ default loans including credit cards, etc.) 3 Margin Call - A demand by the lender to the investor to top up the account if the value of4 Be able to demonstrate the ability to service the collateral falls to a pre-determined interest (good bank account, acceptable salary percentage of the financed amount, usually range, not excessively over-geared elsewhere, 60%. This can be done via pledging more etc.) shares or cash to cover the shortfall. This has to be done usually within 3 days.5 Be able to demonstrate ability to top-up the margin account /trading account if there is a 4 Forced Call - the lender can sell off the shares margin call bought via the SMF account. Usually done when the percentage hits 70%.6 Already, preferably, have banking or trading account with the lender7 Have acceptable knowledge of risks pertaining The above is not standard among the lenders and may to shares trading differ from lender to lender. At the end of the day, the investor or borrower must be aware of the potential risksThe Consequences of Borrowing involved in using borrowed money to invest in shares. There is no such thing as a ‘sure thing’ and shares canOf course, there is a price to pay. For any money go belly up overnight. For an instance, let us say youborrowed, just as in borrowing to buy a car or house, the own shares of an Oil & Gas company. A slump in oil pricelending institution will charge you interest on the amount can cause crisis and if these stocks had been used asyou borrow. The rate varies from bank to bank but is collateral or were the invested shares, then the investorgenerally a certain percentage over the Base Lending is potentially looking at heavy losses on his investment,Rate (BLR). Key general terms and conditions are: or face a margin or forced call.1 Minimum loan amount of RM50, 000 Hence, always invest in fundamentally strong stock, do your research, and most importantly, use only the2 Interest rate between BLR + 0.85% for smaller money you can afford to lose! loans to BLR + 2.35% for loans in excess of RM500,000; this is calculated on per-annum-basis Note: The word ‘share’ and ‘stock’ carry the same meaning.3 Collateral by way of existing acceptable With over 30 years of experience, Jega Shares, Cash, Fixed Deposits, etc Baradan has been instrumental in developing and arranging financing for companies of varied industries. He can be contacted via [email protected] April 2015 |
High Commission of India HIGH COMMISSION OF INDIA Kuala Lumpur KUALA LUMPUR ***** “MAKE IN INDIA”The Prime Minister of India Shri Narendra Modi launched ‘Make in India’ global initiative on 25th September, 2014 from Vigyan Bhawan. The objective of the initiative is to unleash the untapped power of India's strategic strengths. The three D's that work in favour of India; democracy, demand and demography, are to be harnessed in a focused manner to ensure India's continued movement on the path of growth. ‘Make in India’ initiative intends to invite both domestic and foreign investors to invest inIndia. The initiative was simultaneously launched in the Capital of all states and in several Indian Embassies/High Commissions including in Kuala Lumpur.India’s National Manufacturing Policy, 2011 was announced with an objective of enhancing the share of manufacturing in GDP to 25% by 2022 and creating 100 million jobs.However, the performance of manufacturing witnessed a downward trend with growth rates of 1.1 % and -0.7% during 2012-13 and 2013-14 respectively. There was a need togive a significant impetus to manufacturing activities through boosting sentiments and creation of conducive environment to promote entrepreneurship.The ‘Make in India” initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. Thefour pillars are:(i) New Processes: ‘Make in India’ recognizes ‘ease of doing business’ as the single most important factor to promote entrepreneurship. A number of initiatives have already beenundertaken to ease business environment. The aim is to de-license and de-regulate the industry during the entire life cycle of a business.(ii) New Infrastructure: Availability of modern and facilitating infrastructure is a very important requirement for the growth of industry. Government intends to develop industrialcorridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements. Existinginfrastructure to be strengthened through upgradation of infrastructure in industrial clusters. Innovation and research activities are supported through fast paced registrationsystem and accordingly infrastructure of IPR registration set-up has been upgraded. The requirement of skills for industry are to be identified and accordingly development ofworkforce to be taken up.(iii) New Sectors: ‘Make in India’ has identified 25 sectors in manufacturing, infrastructure and service activities and detailed information is being shared through interactive web-portal and professionally developed brochures. FDI has been opened up in Defence Production, Construction and Railway infrastructure in a big way.(iv) New Mindset: Industry is accustomed to see Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how Government interacts withindustry. The Government will partner industry in economic development of the country. The approach will be that of a facilitator and not regulator.With these in mind, an Investor Facilitation Cell has been created in ‘Invest India’ to assist, guide, handhold and facilitate investors during the various phases of business life cycle.This Cell will provide necessary information on vast range of subjects; such as, policies of the Ministries and State Governments, various incentive schemes and opportunitiesavailable, to make it easy for the investors to make necessary investment decision. Information on 25 sectors has been put up on ‘Make in India’s web portal (http://www.makeinindia.com) along with details of FDI Policy, National Manufacturing Policy, Intellectual Property Rights and Delhi Mumbai Industrial Corridor and other National IndustrialCorridors. Investors can use this portal to search information on specific sectors and topics. An automated response system presents related FAQs through identification of keywords. Further, this portal provides an opportunity to raise specific queries to Investor Facilitation Cell. Till 26th March, 2015 Investor Facilitation Cell has received 8,298 specificqueries. With a mandate to reply within 72 hours Investor Facilitation Cell has been efficiently clearing doubts, facilitating meetings and visits on these queries and handholdinginvestors wherever required.Another important area where Government has worked tirelessly is 'Ease of Doing Business'. With determination to improve India's rank in World Bank Group's Doing BusinessReport, a number of landmark reforms have been undertaken. A bill has been introduced to remove the requirement of minimum paid up capital and common seal for companies.The number of documents required for import and export of goods has been reduced to three. Process of providing electric connection is being streamlined to drastically reducethe time required. A number of items have been taken off the licensing requirement. Processes have been made online and real-time. A single window eBiz portal is beingdeveloped and is already working with 14 Central Government services. The list is long and commendable.A number of measures have been proposed in the Budget 2015-16 to support 'Make in India' initiative. Key highlights for proposals aimed towards 'Make in India' initiative in2015-16 Budget are:The corporate tax rate for companies registered in India to go down from 30% to 25% of net profits in a phased manner over the next four years starting from FY 16-17. Anexpert committee to examine the possibility and prepare a draft legislation where the need for multiple prior permission can be replaced by a pre-existing regulatory mechanism.Goods and Services Tax proposed to be implemented from April 01, 2016. Special scheme for skilling youth with US$ 237.5 million. 1 million youth to be skilled in next 3 yearswithholding tax rates for non-residents from royalty/fees for technical services reduced from 25% to 10%.Micro Unit Development Refinance Agency (MUDRA) Bank with corpus of US$ 3.15 billion. Foreign investment allowed in Alternate Investment Funds. Wealth tax abolished.'Make in India' initiative has been extremely successful in generating interest in India. Government of India has been working to make this programme a success in partnershipwith the State Governments. The Prime Minister of India has promised to make India the easiest place to do business in world. India still has a large canvass cut out to work onand fulfil promises made to Indian citizens and to the world.
INSPIRATIONAL 57 • by Ganesh Murugan THOEFPiOnWtEeRnFUtLioLAnW “You are what your Everything in this universe is created by intention and deepest desire is. As purpose, and the whole universe orderly governed your desire is, so is by laws that are immutable and neutral. These lawsyour intention. As your has been created by God and freely provided to us tointention is, so is your achieve human excellence, abundance and prosperity, high will. As your will is, spirituality and to enrich every area of human life. so is your deed. Asyour deed is, so is your “You are what your deepest desire is. As your desire is, so is your intention. As your intention is, so is your will. As your destiny.” will is, so is your deed. As your deed is, so is your destiny.”- - Upanishads Upanishads Intentions are the creative power in each one of us that fulfills our goals, purposes and everything that we need in our life is fulfilled by the power of intentions. Everything that happens in the universe begins with an intention. An intention with a clear purpose, a well-defined direction and the outcome is April 2015 |
58 INSPIRATIONALvery clear, this is the true power of an intention. It is not a ATTRACT ABUNDANCE USING LAW OF INTENTIONwishful thinking that comes now and then with blur outcomes.True intentions when powered with consistency will take you Even many centuries ago it has been clearly told that, “Whatto your destination safe and sound. you Focus upon Expands”, this is a very powerful truth.Our life is shaped by our deep desires. The Law of Intention When your attention falls on the thing or goal you desired tois one of the universal forces, which helps us to manifests achieve the universal law of attraction pulls the desired thingour strong desires into physical form. Intentions can be towards you. Your intention may focus on the future directionpositive or negative; sure both of them will bring results but your focus of attention should be on the present. Oncesince universal law is neutral. What you sent to the universe you remove your focused attention from your goal beforeis what you get back. If this law used for a negative intention manifesting, it would slowly lack clarity and soon it would beyou may succeed for a while, but the consequences will ruin out of the track.your life. So you have to be very careful in monitoring your When we really have an intention,intentions. we are activating the law of Intention or desire into action andARE WE USING THESE “What it starts to work for us 24/7/365, toUNIVERSAL LAWS you Focus manifest the desired result withoutPROPERLY? fail. uponThe sad truth is…No, we are expands” So you must be in proper alignmentnot. According the international with your focus on the presentstudies, Only few percentage steps and your future intention,of people of the whole world’s this is one of key factor that mostpopulation has been using of us failed to understand.these laws for their benefits andteaching other as well to manifest SIMPLE STEPS TO ACHIEVEabundance in each area of their ABUNDANCElives, but the rest of the worldknows about the law theoretically Clearly define your intention orbut not implemented for their full desire you want to achieve. Writeadvance to get abundance in each it down the baby steps which youarea of their lives. can take every day (attention) toA simple scenario would help us move towards to goal (future).to understand the above, If you heard about a very good 1. Be patient. Don’t rush and don’t put yourself in a staterestaurant in your town, but you have never tasted the food of stressin that restaurant, in the same way, we all know these lawsof universe exist, but we never tasted the outcome of using 2. Everyday imagine or visualize your intention as if youit. The greatest truth about these universal laws explained have already achieved it. The best time to visualize isin Malaysian Indian Business is, when an individual start early in the morning and before you sleep at night.implementing these laws for his goodness in a positive wayit not only impacts his life but also brings abundance and 3. The more you believe that you have succeeded, thegoodness to his surrounding as well for a greater benefit. faster the universe will unfold it to you. Faith is veryCan you imagine? How great results can be achieved if important here.organizations implement this, how if a state or country isimplementing and using these laws for the greater benefit 4. Give your gratitude every day for even smaller thingsof its people. Then there won’t be any corruption, no poverty that made you feel happy, it might be a coffee you had,and no lack in food supplies… All we will be enjoying only or meeting a potential person or helping an old man,one thing, ABUNDANCE!!!| April 2015
INSPIRATIONAL 59 you thank the universe for giving this opportunity to you. So remember, this Law of Intention is one of the major law The results will amaze you. that activate the link between you and the universal power. The minute you decide that what you exactly need and have5. Trust, that the universe will handle the process of a clear intention, the universal energy start working it for you. manifestation. Surrender and let God manifest your desires. Trusting that when things don't seem to go your Penned by Ganesh Murugan, MBA,IIT way there is a reason that might be beyond your way of (PMP), PhD (Perusing) Business Analyst, understanding. Be patient. Solution Architect and CEO of eSolutions Webbers Sdn BhdIn the long run, the simple questions that you ask yourself, : [email protected] a regular basis will determine the type of person you Skype : esolutions_ganeshbecome and what type of valuable things that we seek. : ganesh muruganAsk yourself these questions to make sure you are on thetrack…1. Do you have clear intentions in each area of your life? Like relationship, financial, health, public Image, self- esteem and other things.2. Is your intentions bringing abundance and happiness only to you and your family? Or, to your surroundings also? Think.3. Are you regularly giving alms, donations etc., to the needy people? Remember, “The more you give what other want, the more you will receive what you want.”4. If you not having any focused intentions or desires till now, start now by writing it down in a paper and prioritize which the top 3 that you want to achieve it this year. April 2015 |
60 EMERGING MARKETDOING BUSINESS IN MYANMAROfficial Name Republic of the Union of Myanmar Fast FactsCapital Naypyidaw Yangoon (Commercial City) • The economy is predominantlyTotal Population 55,746,253 (mid 2014) cash basedBanking Hours 10:00 to 15:00Currency Myanmar Kyat (MMK) , equivalent to 100 pyas • Only 10% of the population andBank note K1, K5, K10, K20, K50, K100, K200, 40% of domestic businesses haveDenominations K500, K1,000, K5,000 bank accountsCoin Denominations 1, 5, 10, 25, 50 pyas., K1, K5, K10, K50, K100Official Language Myanmar (Burmese) • Credit cards aren’t widely used or English is spoken by the educated urban elite, and is the accepted second language learnt in government schoolsInternational organizationMembership ASEAN, WTO, IMF, ADB, SAARC, UNFiscal year 1 April to 31 MarchReligion Buddhist 89%, Christian 4%, Muslim 4%, Animist 1%, Other 2% | April 2015
EMERGING MARKET 61Interesting facts about Myanmar Trade1. Myanmar has over 135 ethnic tribes and “Burma” is Major Exports Natural Gas, jade, timber, pulses and the largest one. Around 68 percent of the population is beans, marine produce, rubber , garments Burmese. and rice2. During the British rule, it was the richest South East Major Imports Petroleum products, machinery, iron and Asian country. steel , plastics, palm oil, vehicles, pharmaceuticals, cement and fertilizer3. It is a little known fact that wine-making is a popular industry in this country. There is Sauvignon, Chardonnay, Major Trading China, Thailand, Singapore, India, Late Wine and Inle Valley White Wine amongst a horde Partners Malaysia, Hong Kong, Japan, Korea, of other wines. Indonesia, Bangladesh and Germany 4. Betel nut is vastly popular in the country and people will chew on it right through all their waking hours. Value of Key Industry Sectors in Myanmar as of5. Myanmar is rich in natural resources such as arable 31st December 2013 land, forestry, minerals, as well as freshwater and marine resources, gems and jade. No Industry Value of Sector (USD Million)6. Large population with 40% of the world’s population living in bordering countries (China, India, Thailand, 1 Power 19,300 Bangladesh). 2 Oil & Gas 14,4007. Lowest labour costs in South East Asia.8. 10th largest natural gas producer globally and abundant 3 Manufacturing 3,600 in other natural resources. 4 Mining 2,8009. Myanmar ranked 177 out of 189 on the World Bank’s 5 Hotel Tourism 1,800 Doing Business Index in June 2014.10. Myanmar ranked 157 out of 175 on Transparency 6 Real Estate 1.200 International’s Corruption Perceptions Index 2013. 7 Livestock & Fisheries 36011. Myanmar is estimated to quadruple the size of its 8 Transportation & Communication 300 economy, from $45 billion in 2010 to more than $200 billion in 2030, that could create approxiamately ten 9 Industrial Estate 190 million nonagricultural jobs in the process.( McKinsey & Company). 10 Agriculture 190 Source: Directorate of Investment and Company Administration, Ministry of National Planning and Economic Development, Myanmar Myanmar will be the first Asian economy to develop in a free, orfreer, trade environment g Myanmar exports 76% of its beans and pulses to India April 2015 |
62 EMERGING MARKETBusiness Opportunities Finally, a large and relatively cheap labour force means that manufacturing is an area which is also sure to generateMyanmar has largely missed the economic renaissance that international interest. The removal of sanctions has alsois delivering enormous progress in growth, productivity, and opened up the sector to the production of various goods forreduction of poverty across emerging markets in general export.and many of Myanmar’s neighbours in Southeast Asia inparticular. As long as Myanmar stays the course on political MIB has identified the following sectors asreform and economic transformation, it has a number of offering business opportunities for malaysianintrinsic assets and a highly favourable external environment businesses:in Asia that it can use as a platform for growth. The economycould develop at a pace that may surprise many people and 1. Oil and gas extractionsbegin to put to rest any remaining nervousness about thecountry’s prospects. The Myanmar Oil and Gas Enterprise (MOGE), an agency under the Ministry of Energy are encouraged to work withThough the challenges are considerable, the Myanmar multinational corporations to participate on a production-Government is adopting a market-oriented system. It is now sharing basis. The GOVERNMENT welcomes investmentpossible to establish 100%-foreign owned companies, joint opportunities in :ventures or a ‘special company’ whereby part of the equity isowned by the state. Foreign companies are now also able to • Exploration and production in petroliferous stratalease land privately from individuals as well as from the state (onshore and offshore)and for increased periods of up to 50 years. • Rehabilitating marginal fields, declined fields andMany opportunities exist in Myanmar for SME businesses suspended fieldsacross a variety of sectors. For example, there areconsiderable opportunities in the agri-business and power • New plant commissioning for refineries, LPG, LNG, andsectors alone. Given that 75% of the country is still without fertiliser plantspower, with blackouts on a daily basis even in Yangon, andthere are still severe shortages of milk and meat, it is not • Floating Storage Units (FSU), floating storage and off-difficult to see the areas where goods, services and expertise take facilitiescould prove beneficial for all involved. Only 10% of Myanmar’shydropower capacity has been tapped, only 6 of 17 offshore • CNG refuelling stationsand 14 onshore oil and gas basins have been thoroughly • Research and developmentexplored and foreign technical expertise is also required to • Trading, marketing and retail sales of petroleum productsdelve abundant coal deposits. • Supplying equipment to renovate drilling rigs, refineriesAnother sector where investors might be advised to and plantsinvestigate is precious stones where small businesseswith know-how and machinery could benefit. Other sectors 2. Miningwhich will likely provide plenty of investment opportunitiesfor outside investors include ICT, Financial and professional Tremendous opportunity exists for foreign firms seeking toservices, and manufacturing. The Myanmar Government carry out mineral explorations. Investments are made throughalso has plans in place to improve all infrastructure: roads, exploration and production sharing agreements and 100%railways, ports and airports. foreign direct investment (FDI) as well as joint ventures with local companies. The following mining-related activities areFinally, a large and relatively cheap labour force means that permitted:manufacturing is an area which is also sure to generateinternational interest. The removal of sanctions has also • Mineral prospecting, exploration and feasibility studiesopened up the sector to the production of various goods for • Large-scale mineral productionexport. • The production and marketing of rare earths, strategic | April 2015 minerals, radioactive minerals • Pearl culturing and production • Manufacturing and marketing of jewellery and finished products, such as statues and carvings
3. Major infrastructure projectsThe demand for new infrastructure projects in Myanmar isalready high and will continue to rise in line with economicgrowth. The government´s stated investment priorities includethe construction of road and rail networks, power plants,water-treatment plants, industrial parks and Special EconomicZones (SEZ). Myanmar has approximately 142,395 km of roadnetworks, which are divided into National highways, townshipnetwork roads, major city roads and other roads and villageand boundary area roads.The Government currently seeking private sector investmentsin infrastructure development and uses Build-Operate-Transfer(BOT) schemes or joint ventures for the construction ofroads, inland cargo depots, ports and airports. Foreign directinvestment in hydropower plants is permitted as a joint ventureor a Build-Operate-Transfer (BOT) scheme. Local investors arealso permitted to take part in Independent Power Producer(IPP) schemes.4. Education and trainingThe education system in Myanmar is attracting attention, asboth the state and private sector look to invest in upgradingschools and universities. As Myanmar looks to rebuild itseducation and university system, cooperation with internationalinstitutions may be one way to secure the necessary funds andother resources.5. AgriculturalAgriculture is the backbone of Myanmar’s economy, withapproximately 70% of its population engaged in agriculturalwork. It accounts for approximately 40% of GDP. Myanmar’sabundant natural resources and diverse agro-ecologicalconditions provide a wealth of opportunities for foreigninvestment across the entire supply chain. Crops Myanmar’shighest value crops include paddy (un-husked rice), beans,pulses and oil seeds. The largest agricultural subsector isrice, with 20 million acres yielding some 31 million tonnes ofpaddy annually. Rice alone comprises 15% of the total GDP.Although Myanmar has abundant fertile land and water,productivity in terms of tapping these resources remains lowand therefore represents significant potential for growth. Theagricultural sector is also under-utilized: existing crop yieldswould substantially increase as a result of the introduction ofnew irrigation systems, the use of fertilizers and other forms ofmodern technology.
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