Thilawa SEZ receives 40 firms from 11 countries

Myanmar’s attempts to become a manufacturing hub are likely to come true in a few years as 40 firms from 11 countries have so far signed an agreement to invest in its major special economic zone.
Thilawa SEZ is still attractive to international firms as 83.4 per cent of its Phase I implementation was completed as of March 28, said Yanai Takashi, president and chief executive officer of Myanmar-Japan Thilawa Development Ltd (MJTD).

Takashi said in an exclusive interview on the sidelines of the Myanmar Infrastructure Summit on Thursday that Japan has proved its commitment to Myanmar by standing as the biggest investor in the SEZ so far. Among the 40 firms which signed the agreement with MJTD, 21 firms are from Japan followed by Taiwan and Myanmar with four firms each. Three Thai firms and two Singaporean firms joined the investors list with each firm from the United States, China, Sweden, Hong Kong, Australia, and Malaysia.

“These firms can be divided into two kinds — export-oriented and domestic-oriented. We have received similar number of firms in each category,” he said.

According to Takashi, export-oriented firms will mainly produce garments, shoes, toys, automobile parts, electric devices, wheelchairs, and wood crafts while domestic-oriented ones focus on producing construction materials, food, aluminum cans, lubricant oil, consumer products, plastic products, medicine, industrial machinery, and corrugated cardboards.

Although the SEZ is planned to be implemented in a land area of 2,400 hectares as a whole, both countries have been implementing Zone A area which has only 396 hectares. While 35 hectares are set for the residence commercial area, the industrial area is planned to be implemented in two phases — 211 hectares in Phase I and 150 hectares in Phase II.

The implementation of Phase I started on January 10, 2014 when MJTD was established. Before the establishment of MJTD, both countries signed the joint venture agreement on October 29,2013.

“We hope to complete the Phase I implementation by the end of June. At the same time, we have also been developing Phase II since October last year. So far, about 16 per cent of Phase II has been completed. Construction of the first factory started in December last year and is now underway,” said Takashi.

The JV firm head added that construction of new roads is 60 per cent completed and more than 70 per cent of power distribution lines have been installed. In an effort to prevent electricity shortage, a 50 megawatts power plant and a new substation are under construction, while using the power from the existing substation at the moment. For the water supply within the SEZ, Zamani Reservoir will be the main source of water, and a water treatment plant and a sewage treatment plant are being constructed.

As for telecommunication, the Myanma Posts and Telecommunication has been extending fibre optic cables to the SEZ. The government has also planned expansion of access roads to Thilawa SEZ and a new rail route from Yangon to the SEZ. Construction of a new port will also be carried out with the support of Japan International Cooperation Agency. To ease the environmental concerns, pollution control and monitoring water and air quality will be undertaken in line with international standards.

Takashi insisted that infrastructure is the major concern for foreign investors eyeing to set foot in the SEZ. He expressed optimism over the infrastructure development in the near future.

“If investors are really concerned, they will not come. So all the 40 firms proved they had only tiny concerns…I do not think there is no critical concern in Myanmar. That is why they decided to come,” he said, adding that a number of investors including some Western firms are on the verge of signing the agreement with MJTD soon.

According to Takashi, foreign direct investment will mainly drive the nation’s economic growth thanks to the inflow of investors and cash. Japanese firms will stand as one of the key players in the manufacturing sector which would receive investments around the world.

“I have no doubt that manufacturing is one of the key drivers of Myanmar’s economy as it can create a lot of job opportunities and earn a fortune of foreign currencies,” he said.

Takashi added that in Phase I alone, the SEZ could create 40,000-50,000 job opportunities and attracted export-oriented firms. Other benefits include technology transfer by foreign firms.

He did not see skills shortage as a constraint thanks to the establishment of a vocational training centre in the SEZ.

“We can provide education from now on. Companies can educate their workers. Twenty years back in Thailand, it was nearly the same as in Myanmar. Manufacturers know how to educate their workers,” he said.

He urged foreign investors to come and see the implementation of the zone.

“It is important to come and see the atmosphere in Myanmar and then they can understand the bright future of Myanmar. Without seeing Myanmar, it is a pity to judge,” he said.

Source: Eleven Myanmar

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