SEZ to Import Japanese Agriculture Machineries

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Agricultural machinery manufacturer Yanmar Myanmar Co Ltd in Thilawa Special Economic Zone (SEZ) will not establish production lines in Myanmar but will import and distribute those machineries, Takesi Terada, the firm’s managing director, told the Myanmar Times.

Yanmar Myanmar, a joint venture between Yanmar and the Japanese corporation Mitsui, has established import and distribution lines in Thilawa SEZ.

In March 2016, Deal Street Asia reported that Japanese Yanmar Group, which is into agriculture, construction, energy, marine, was looking to expand into Myanmar. Yanmar Myanmar would be investing US$6 million in the agricultural machinery space. The firm would be located at the Thilawa SEZ covering about 10,000 square feet.

Having completed the construction, the joint venture launched its opening ceremony for its distribution and sales services at the company headquarters on February 21.

“We will not produce machineries in Myanmar. We will import them from Japan and distribute here. However, the company will conduct knowledge sharing for the development of agricultural sector in Myanmar,” Mr Terada said.

It was expected that foreign direct investment would enter the SEZs to establish manufacturing operations.

“When investment proposals are approved, first of all we prioritise foreign investments which can provide benefits for the country. The second point is that we prioritise businesses which can create job opportunities in the country,” U Aung Naing Oo, Secretary of Myanmar Investment Commission (MIC) and Directorate of Investment and Company Administration (DICA) director general, said.

This echoes the director general’s earlier view that labour-intensive manufacturing remains a priority on the government’s economic agenda and that the administration is keen to bolster the sector.

“We haven’t yet set which sectors will be the promoted sectors. But definitely, number one, will be manufacturing, particularly labour intensive manufacturing will be in the list of promoted sectors. Number two is infrastructure development. Private investment in infrastructure will be in the list of promoted sectors. Agriculture and food processing will also be included,” U Aung Naing Oo said during an interview with the Myanmar Times in October 2016.

According to chapter (9), section (51) of Myanmar Special Economic Zone rules, the Management Committee can permit the operation of the businesses which include importing and distributing inside an SEZ. Similarly, section (51)(A) of Myanmar Special Economic Zone rules allows non-prohibited businesses and Section (51)(B) of Myanmar Special Economic Zone rules describes that the Management Committee can allow business of storing goods from abroad with the purpose of packing, selling or distributing the goods with the consent of the owner or supplier of the goods. Hence, firms and joint ventures such as Yanmar Myanmar can do business of importing and distributing without manufacturing.

“There are many opportunities for the Myanmar agricultural sector to develop. But this sector is now facing labour shortage. Therefore, those machineries will greatly support the development of agricultural sector,” said Japanese ambassador to Myanmar Tateshi Higuchi.

The company currently employs 20 local workers but more employment opportunities will be available in the distribution networks once the business is connected with domestic businesses, Mr Terada added.

In addition to discussions with five local distributors and dealers to sell agricultural machineries, further negotiations are underway with local banks on the possibility to sell those machineries on an instalment basis.

 

Source: Myanmar Times
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