The Myanmar Investment Commission granted licences to 33 companies in the first four months of the year, whose total investment amounted to US$815 million (Bt25 billion). Yes, some of them are from Thailand, but a pioneering Thai businessman believes his countrymen are moving into Myanmar too slowly.
Having been in the neighbouring country for 22 years, Chuchart Mektrakarn of Myanmar Nouveau Steel urged more Thai companies to make a move now or lose opportunities to other foreign investors. The investment climate was safe and sound, with skyrocketing land prices the only concern, he stressed.
“Myanmar is like a beautiful girl, drawing lots of attention. Thai companies will have to hurry,” he said in an interview.
He was in Nay Pyi Taw with a group of Thai businesspeople who are seeking investment opportunities in Myanmar.
Chuchart decided to establish a factory in Yangon 22 years ago to make zinc-coated roofing tiles, impressed with the peaceful conditions compared with other neighbouring countries and a culture close to Thailand’s. He lashed out at the bad perception about Myanmar among Thais, concerning the historic battles between the two countries centuries ago.
Now he spends three weeks of every month in Yangon and one week in Bangkok. Life is easy in Myanmar, he said, with hospitable people, familiar food and culture. He remains in close contact with Bangkok, through telephone and more direct flights to Yangon.
His days in the country started during a visit two decades ago. Travelling with some Thai friends, he made new friends with local people who happened to have friends with some officials. He was then introduced to a local partner, and a 65:35 joint venture was formed to ease the difficulty in obtaining a business licence. The partnership is thriving today, with the partner’s assistance in financial and non-financial terms.
The business has flourished from the burgeoning construction in Yangon. It had about 20 Thai employees in the initial period, but now most employees are locals. But the lower cost of products imported from China is forcing the company to adjust its business strategy, probably to diversify into steel manufacturing.
Demand is on the rise, he said. While incoming foreign investment is lower than expected, local business people are getting ready for the economic boom.
For newcomers, Chuchart noted that it was important that they show sincerity. Some Thai businessmen have taken advantage of the country, such as cutting down more trees or catching more fish than permitted.
He added that the business environment was more supportive than two decades ago, with the presence of law firms that are ready to assist in supplying information and finding local partners. Plus, the government has been active in stabilising the foreign-exchange rate. The kyat is now quite stable at 950 per US dollar.
The only problem in his view is the cost of land. Privately owned plots are owned by a few groups of locals, making it hard to find land for industrial, commercial or residential development. In time, this will place a hardship on the Myanmar economy.
“Sixty per cent of land in Yangon is in the government’s possession. This must be released to increase supply and suppress land prices. Still, the land-release scheme must be carefully drafted. If the new land fell into the hands of military cronies, this would be of no benefit to the economy,” he said.
Chuchart noted that the garment association of Hong Kong recently cut a deal to secure a vast land plot for the relocation of some factories. More than 300 garment factories stand to benefit from the European Union’s Generalised System of Preferences, which lowers tariffs on garment imports from Myanmar.
“Thai companies must hurry,” he said, adding that there were now efforts to revive the Thai businessmen’s club in Myanmar to support investment. Chuchart himself led the club in the early days and now he prefers that some new faces handle the job.
Source: Thailand Nation Multimedia