Thilawa has attracted formal interest from dozens of companies, but competitors say local firms are reluctant to commit to the long-term leases required by the special economic zone.
Myanmar Japan Thilawa Development Company (MJTD) has received letters of intent from 60 foreign companies to participate in the zone and reached formal agreements with about 15, according to the firm’s director Hironaka Masatoshi.
Foreign interest is coming from a number of industries including garments, food processing and metal production, he said. Mr Hironaka added that while MJTD is responsible for preparing the infrastructure, the timeline for building factories at the SEZ are up to the firms themselves.
“We are going to deliver land to the investors, and the investors are going to build the factories,” he said.
Thilawa is one of Myanmar’s three SEZ projects, intended to generate employment and business opportunities as well as take pressure off Yangon’s strained infrastructure – the SEZ has a port and is about 25 kilometres south of Myanmar’s largest city. The two other SEZs, Dawei and Kyaukphyu, are located in Tanintharyi Region and Rakhine States respectively, and are at different stages of development.
The potential for Thilawa has been widely touted, and the international participation in the project has helped increase its international visibility. However, competitors to Thilawa say the SEZ is untenable for local companies, because the firms are uncomfortable with the longer-term leases the SEZ is requesting.
Hlaing Tharyar Industrial Estate chair U Myat Thing Aung said that while prices are cheaper at Thilawa than on other industrial projects, prospective tenants must secure long-term leases of up to 30 years.
“If we have to agree to 20 or 30-year terms, other industrial zones outside the SEZ become more reasonable, as we can secure land there for the short-term,” he said.
The requirement for a long-term lease appears not to have been off-putting for all local firms. Mr Hironaka said several Myanmar companies have already claimed interest in setting up at Thilawa and submitted letters of intent, though he did not name who they are.
MJTD has targeted the middle of 2015 to finish the project’s first phase. U Set Aung, chair of the Thilawa management committee, said in April that the SEZ expects to have businesses operating by the end of 2015.
However, there is a lot of work to do to finish the SEZ’s infrastructure and get the factories up and running. Local residents told The Myanmar Times that so far most of the work appears to be directed at building up infrastructure.
Officials have so far declined to reveal exact prices for land at the site, claiming business confidentiality, but U Set Aung in April also pledged that Thilawa land would be competitive in ASEAN and slightly cheaper then countries such as Vietnam.
Source: MYANMAR TIMES