ayeyarawaddy myanmar investment

Interview with Minister U Htay Win

Ayeyarwady Region is open for international business, says Minister U Htay Win.

An interview with the Minister of Planning and Finance for Ayeyarwady Region reveals opportunities in sectors from farming and fisheries to tourism, deep-sea ports, heavy industries, and petrochemicals.

Q: Let’s start by talking about agriculture since Ayeyarwady is known as the rice bowl of Myanmar.

A: Agriculture is one of the main businesses in our region. Ayeyarwady has more than 4.7 million acres of farmland and 70 percent of the population are farmers, mostly growing paddy.

We have been trying to develop a balanced supply chain and there are a lot of business and investment opportunities in the rice industry here, from growing paddy to the export of rice overseas.

We have seen the impact of climate change and labor shortages and we understand the importance of transitioning to industrialised farming systems to avoid losses at every stage of rice production.

With two-step loans from the Japan International Cooperation Agency, farmers have been provided with 359 machines for rice cultivation. But the industry needs many more machines.

There are opportunities for investors to rent machinery to farmers, or to become involved in other stages of the supply chain, including milling, storing and exporting. There are also opportunities in contract farming: in Ayeyarwady, bananas, tapioca and other crops are grown by the farmers and then exported by domestic or foreign firms.

Q: As Ayeyarwady is a delta region, are there any private companies investing in the fisheries sector?

A: There are 120,000 acres of fish ponds and 63,000 acres of prawn ponds across the region, which currently use basic farming methods. If more sophisticated methods could be used, business would improve, so we invite both domestic and foreign investors to participate.

Now, for example, in Labutta Township, a local company and a foreign company [TexChem Marine Labutta, a subsidiary of Malaysian firm Texchem Resources] are farming and exporting soft-shell crabs.

There are over 700 acres of salty land in Labutta Township where paddy does not grow well, so we are promoting the use of this land by inviting other companies to farm soft-shell crabs.

Q: There are three industrial zones being built in Ayeyarwady Region.

A: We are building three new international-standard industrial zones in Pathein, Maubin and Nyaungdon townships. The infrastructure for the zones in Pathein and Maubin has been partially completed and this year, garment factories at Maubin Industrial Park will begin operations.

Q: What kind of investment do you expect these zones to attract?

A: We expect to see factories that will process agricultural and fisheries products, regionally-produced raw materials and wood products. As this is an agricultural region, we also hope to attract agricultural machinery and chemical fertiliser manufacturers. The industrial zones are also suitable for labour-intensive industries such as the production of garments, footwear and electronics.

Q: A new bridge was opened last month when President U Win Myint visited Ayeyarwady, improving access to Shwe Thaung Yan Beach. What are the tourism investment opportunities in this region

A: The beaches at Chaung Tha and Ngwe Saung are quite well developed and there are modern hotel and housing development projects underway there as well. Moreover, we are trying to build beach resorts in Shwe Thaung Yan, Gaw Yin Gyi and Maw Tin.

Shwe Thaung Yan beach is just a 20-minute drive away from Chaung Tha, now that the new bridge has opened. The beach is 11 miles long and still unspoiled and beautiful and there is an opportunity to invest in hotels and high-end housing projects there.

There are also opportunities to invest in Gaw Yin Gyi and Maw Tin, which are suited to eco-tourism.

Q: We understand a new coastal road will connect Ayeyarwady Region with Rakhine State. Why is this road needed? What benefits do you expect to come from it?

A: Our regional government is focused on carrying out infrastructure development on Myanmar’s western coast.

We are collaborating with the Rakhine State government and the Ministry of Construction to build a 170-mile coastal road that will connect Gaw Yin Gyi, Chaung Tha, Ngwe Saung and Magyizin in Ayeyarwady Region with Gwa and Thandwe in Rakhine State.

The road is primarily aimed at developing the country’s western coastline. We have studied this region and found it is suitable for several industries including hotels and tourism, deep-sea ports, heavy industrial zones and refinery, and petrochemical complexes.

Once the road has been built, it will be possible to travel directly from the beaches in Ayeyarwady and Rakhine to [the ancient Rakhine State city of] Mrauk-U, which will help the coastal regions to develop rapidly.

This road is important for the transportation sector too. There is a water depth of 20 meters in Nga Yoke Kaung, so this is a promising location to build ports for ships with a weight of between 100,000 tonnes and 300,000 tonnes.

Currently, ships weighing no more than 20,000 tonnes can dock at the ports in Yangon. The current deep-sea port projects are a long way from Yangon, so it would be possible to reduce transportation charges for imports and exports if deep-sea ports can be built in Ayeyarwady Region.

There is already a 1,390 megawatt liquefied natural gas-to-power project being built at Mee Laung Gyaing [by China’s Zhefu Holding Group and Supreme Trading, with an estimated price tag of US$2.4 billion], but because of the country’s need for energy, it will be necessary to continue implementing such projects.

Another opportunity for large-scale investment is in the construction of refinery and petrochemical complexes. Myanmar’s present annual consumption of fuel oil is more than 9 million tonnes, at a cost of $6 billion.

If we can refine and produce petrochemical products from imported oil, it will be beneficial both for investors and for the country. Since this is a location with easy access to the Middle East, petrochemical complexes could supply both the Myanmar and overseas markets.

Q: How much investment has been permitted in Ayeyarwady Region?

A: Under the Myanmar Investment Law, at a regional level we can approve investments worth up to $5 million (MMK6 billion). Since its formation in October 2016, just days after the Myanmar Investment Law was approved by parliament, the Ayeyarwady Region Investment Committee has approved 20 projects worth a total of $12.3 million and MMK 49.8 billion.
Since October 2016, Myanmar Investment Commission has also approved 11 projects with a total value of $59.74 million and MMK192.77 billion.

Q: What are the main challenges for investors?

A: Of course, power supply is a challenge. In the past, we haven’t had sufficient electricity to supply both households and industries. Power lines and substations are being built to provide power to the coastal areas of Chaung Tha, Ngwe Saung and Shwe Thaung Yan and should be complete by September 2019.

When the LNG power station at Mee Laung Gyaing begins operations [reportedly by 2021] it will be able to supply the entire Ayeyarwady Region and preparations are being made for this.

Another problem is transportation: the roads are not good enough. They are currently being upgraded using loans from the Asian Development Bank. The Maubin to Pyapon road has recently been upgraded into a four-lane expressway, as has the Pathein to Monywa road. Plans are also underway to upgrade the road between Yangon and Pathein into a four-lane expressway.

Now the Pathein River is being dredged and before too long, foreign cargo ships will be able to use the Pathein River. Just as in the past, goods can be exported directly from Pathein Jetty.

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