Local log exporters concerned about foreign competition

LOG exporting businesses in Myanmar have requested the government to hold tenders only open to domestic log traders.

Log merchants have called for the Myanma Timber Enterprise (MTE), which is under the Ministry of Resource and Environmental Conservation, to hold separate tenders for local wood-based industry merchants engaging in the business of exporting logs of wood.

The request was made during an October 2 event held by the Myanmar Forest Products Merchants Federation (MFPMF) in Yangon.

“The local merchants are not able to compete with foreign export bidders, who have the market, technology and good financing [in terms of trade and other loans]. The government needs to arrange a separate tender for local merchants for log export as locals can’t compete with foreign investors in the same tender,” U Thein Che, vice chair of MFPMF, said.

U Khun Aung Soe, MTE general manager, said the local merchants need to find more markets to compete with foreign log traders as Myanmar moves forward to become an open market economy. “It will be hard to manage a separate tender for just local merchants.”

“As the MTE is a state-owned enterprise, we need to generate good income for the country as well. Pricing matters for us, if we do separate tender for locals. We need to submit this to upper-level decision-makers,” he said.

U Khun Aung Soe added that local merchants need to invest more in private timber plantation, rather than relying on natural timber sold by the MTE.

At the same time, local merchants called for the other ministries to purchase timber to supply the demand via legal timber businesses for the government’s projects.

“When ministries hold open tenders, there are three out of five merchants who are illegal timber traders. That is not a good system as the ministries representing the government are using illegal timber,” U Thein Che noted.

U Then Win, another vice chair of the MFPMF, added that the government’s actions to attract more FDIs are designed to boost employment opportunities, facilitate technology transfer, and develop export earning and increase tax revenue. But international bidders are merely trying to export the logs rather than milling and producing value-added products in the country.

“If we [the MTE and ministry officials] have to accept competition, the foreign investors also need to follow the contracts,” he said.

Source: Myanmar Times

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