Korean state firm eyes first industrial zone

State-owned Korea Land & Housing Corporation (KLHC) is collaborating with the Ministry of Construction on a new US$120 industrial complex, according to officials involved in the process.

The Korea-Myanmar Economic Cooperation Industrial Complex is KLHC’s first project in Myanmar. The corporation is hoping to build the complex in the Yangon area, and is in talks with the ministry, and the Department of Urban and Housing Development, said Jae-Dong Lim, the general manager of KLHC.

“We’ve chose a 600-acre site near Hmawbi township,” he told The Myanmar Times, adding that ministry had recommended the government-owned site. “We have a memorandum of understanding with the ministry and the department of housing about the process of developing the zone, the infrastructure and the housing projects.”

Daw Moe Thida, deputy director of the Department of Urban and Housing Development, said the complex was intended to enhance economic cooperation between Korea and Myanmar.

“This is a government-to-government project,” she said, “although we’re still not sure about the exact location as we’re still in the process of discussion.”

KLHC originally submitted a letter of interest for the project in October 2015. The Myanmar government’s economic committee and cabinet approved the proposal on January 14, Mr Lim said.

He expects total investment in the zone to reach $120 million, and KHLC has already contacted many Korean firms to drum up interest in investing in Myanmar. But potential investors will have to design marketing strategies and development plans appropriate for the complex, he added.

The Korea-Myanmar Economic Cooperation Industrial Complex will use the existing industrial zones at Thilawa special economic zone and Mingalardon industrial zone as a template for ownership structure. Both these zones have a 51/49 percent split between Myanmar and foreign investors.

One challenge will be competing with the Thilawa zone, which Mr Lim said would be built very quickly, “although their site is a little far from the Yangon central business district”. “I’ve also heard there were some challenges selling the land and finding possible investors.

The Thilawa zone encountered problems in its early days, with protests from local farmers, foreign investors questioning the reliability of the electricity supply. But the first phase of the zone was launched in September, and contracts have been signed with 48 companies, according to Taro Aso, deputy prime minister of Japan.

Japanese investors own 49pc of the Thilawa zone.

The Korea-Myanmar Economic Cooperation Industrial Complex will not compete directly with Thilawa. The former will focus on sectors where domestic consumption is high – construction materials, electronics and cosmetics, said Mr Lim. Thilawa, on the other hand, is oriented more toward exports.

Mr Kim said he hoped construction would start in the next year, and expected the zone to take three years to build.

Source: Myanmar Times

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