About 80 percent of Myanmar’s exports of beans and pulses go to India, with lesser amounts going to Pakistan, Bangladesh, Europe and the United States. Myanmar competes against other growers, including Canada, Mozambique, Tanzania, Sudan, Malawi and Senegal.
That’s why Sunil Seth, the Myanmar head of the US$100 billion Tata Group, one of India’s largest companies, set up the Overseas Agro Traders’ Association of Myanmar (OATAM), with 25 corporate members who collectively account for 80 percent of the beans and pulses exported from Myanmar.
A career Tata man, Sunil Seth spent most of his working life in the steel industry. Since coming to Myanmar in 2013, he has applied some of the tactics he learned in the steel industry to Myanmar’s agriculture sector – especially by creating brands.
“I’m trying to de-commoditise pulses, finish them into small packages with branding and sell them,” he said. “You see how you can add more value instead of just being a trader.”
Within two years Tata International has become one of the top agricultural exporters from Myanmar to India.
OATAM was set up with help from the Beans and Pulses Association of Myanmar and with the support of the Ministry of Commerce and Trade.
“It was Minister U Win Myint who encouraged me to form this association along with the rest of the group,” Mr Seth said.
“We felt there were a lot of areas that needed improvement. For instance, we wanted to develop a standard specification on quality. Another question is, how do you build a good brand?”
Other objectives include working more closely with Myanmar suppliers and bringing in standardised contracts to avoid defaults. “We looked at letters of credit and involving the banking system to get security on our payments,” he said. In July, OATAM invited shipping companies to discuss improving logistics. A previous meeting with inspection agencies was convened to discuss product quality.
“The challenge is using research and development to improve quality, get better seeds, train farmers and provide credit,” he said.
Mr Seth sees continued growth for Myanmar. “When you see the numbers it gives you a lot of confidence that this country is going to grow phenomenally in the next five to 10 years,” he said, citing a McKinsey report that Myanmar’s economy would grow from $50 billion to $200 billion by 2030. “I think it will reach $200 billion earlier, because of natural resources and the ability to use IT,” he said.
The Mumbai-headquartered Tata Group is a conglomerate of public listed companies. Its activities include steel, airlines, automotive, electricity generation, beverages, chemicals, telecoms, hotels, engineering, construction, retail and financial services. The group reported $103.7 billion in revenue in 2014 with a $5.31 billion net profit, and employs 581,000 people worldwide.
Tata Power has signed an agreement for a 1320-megawatt coal-fired power plant in the Ayeyarwady Delta near Pathein in Nyok Kaung Bay, said Mr Seth. “We are also trading in steel products and looking at imports from India and China.”
Mr Seth says Tata Group is looking for opportunities in building electrical transmission lines as well as hotels to link with Tata’s Taj Hotels brand.
“We are looking at the possibility of opening a Taj Hotel here if the right opportunity comes up. The group is very excited about it.”
However, Mr Seth says land prices are too high, especially in Yangon – something he says dissuades a lot of potential investment.
“I’ve seen a lot of improvement in import and export procedures in my two-and-a-half years here,” he said. “You don’t have to struggle any more. The telecoms sector has improved; the oil and gas sector has changed for the better because the government is giving licences for offshore blocks and they gave licences to nine foreign banks. That gives me a lot of confidence about this country.”
While he understands the country’s capacity limitations, he says the government in Nay Pyi Taw has done a remarkable job in a short time.
Mr Seth wears two hats in his job – one as country head for Tata International and the other as representative for Tata Sons, the Group ‘sholding company, so he can be ready to make deals when opportunities arise.
“One is trading portfolio and the other is scouting for opportunities to see where an investment can come in. The group feels that Myanmar is an important market with a young labour force and good natural resources.
Recruited right out of mechanical engineering school at the Birla Institute of Technology when he was 23 – he’s now 54 –, he says the most important feature of the Tata Group’s corporate culture is trust.“Tata is a highly ethical company and we have a lot of respect for our employees. We have a philosophy to give back to society and we do a lot of CSR.”
Having worked in Eastern Europe, Singapore, Thailand and India during his 30-year career with Tata Group, Mr Seth says he’s very happy to be in Myanmar and having shifted his focus from just steel to embrace agriculture, power, hotels and other industries.
Source: Myanmar Times