MARKET ENTRY STRATEGY REPORT FOR A CLIENT ON:
- WHICH SEGMENT IN THE TECHNICAL, VOCATIONAL & EDUCATION TRAINING MARKET THEY SHOULD FOCUS ON IN MYANMAR
- WHO ARE THE COMPETITORS THEY SHOULD TAKE NOTE OF
- WHO ARE THE POSSIBLE JOINT VENTURE PARTNERS
XXXXX – indicates the information has been redacted to protect the information that the client has paid for
|Project Title||Needs for XXXXX Technical Vocational and Education Training (TVET) in the Myanmar Oil & Gas, Mining and Building/Construction Industries|
|Date Project Started||2/10/2014|
|Date of Report||18/12/14|
|Total No of Page||12 pages (only the 1st 5 pages is included in this sample report)|
Figure 1 – Who is at the top of industry structure determines the need for safety and training in the industry
- A sector’s training requirement is driven by who is at the top of the industry structure. See diagram in Figure 1 above for more info.
- The requirement for safety and skill training in the Offshore Oil and Gas industry is determined by the needs of the international oil companies such as Chevron, Shell, Total, Eni and Woodside. The international oil companies most of which are listed – demand that their local JV partners and suppliers meet international standard in terms of safety and skill level.
- Mining industry is controlled by Chinese conglomerates (e.g. the infamous & humongous XXXXX ) & Burmese mining companies (many controlled by Burmese tycoons on the US Sanction List who received their mining concession from the military). The operations are very opaque as they are probably not adhering to international environmental norms or if they are Chinese companies they are the subject of investigation by NGOs and environmentalist. There is not much emphasis on safety or skill training as workers’ salary are low and any accident that cause a loss of limb or death involve compensation of a few thousands US Dollars at most. The archaic 1923 Workmen’s Compensation Act makes employers liable to pay a maximum of K600,000 (approx. USD 600) to a worker who suffers an injury and K450,000 (approx. USD 450) to a worker’s dependents in the event of a fatality!
- Building & Construction industry is controlled by Burmese developers as foreigners cannot own land. Many a time foreign investors are forced into JV with local Burmese land owners in a kind of marriage of commercial convenience – where the foreigners are looking for a quick profitable exit. Burmese construction companies who perform the actual construction work similarly do not placed much emphasis of safety and skill training as most construction workers are unskilled daily rated workers and any attempt to train the worker to make them more skilled and productive will raise their salary expectation and will cause them to job hop to an employer that will pay them a higher salary. On top of that as mentioned earlier it is not expensive to compensate for workplace injury or fatality.
- Our research however found that there is a need for XXXXX TVET in the Oil & Gas Industry in Myanmar. This will be the focus of this report.
- Current Oil & Gas industry needs are being satisfied in 3 ways:
- by sending staff to be trained at XXXXX in Yangon. There is more info on XXXXX later in the report.
- by ASEAN oil companies such as PTTEP and Petronas sending their trainers from head office in Thailand and Malaysia respectively to conduct training in Myanmar.
- by local oil companies hiring trainers from Thailand or Malaysia to fly down to Yangon to train their workers.
- Interest by current Oil & Gas industry participants is limited to TBOSIET (Tropical Basic Offshore Safety Induction & Emergency Training) and HUET (Helicopter Underwater Safety & Escape). Foresee growing interest in other training programs as:
- more foreign oil & gas operators enter the market with the successful conclusion of the offshore oil & gas PSC in the 1st quarter of 2015 and
- the Myanmar government requirements that the foreign oil companies investing under the Foreign Investment Law must have 25%, 50% and 75% local labour respectively in the 1st 2-year, 2nd 2-year and 3rd 2-year of operations.
- The oil field services market and EPC market are dominated by 8 locally owned companies in Table 1 (S/No 1 to 8)
- There are 3 potential competitors worth knowing:
- XXXXX – which conducts safety training for marine engineering and oil & gas industry. See enclosed PDF “Course Information for XXXXX” for more info.
- XXXXX – which conducts training courses within the exploration and production (E&P) sector, although their courses do not run as regularly as XXXXX. Recent courses such as “XXXXX” clearly goes beyond the curriculum provided by XXXXX.
- XXXXX – a foreign own company that is incorporated in Myanmar. Provides human resource solutions to the oil & gas, mining and power industries such as recruitment, payroll, insurance, hostel, etc. See enclosed PDF “XXXXX” for more info.
- After discussing extensively with the directors at the Directorate of Investment and Company Administration (DICA) for company registration and Ministry of Labor – we found that there is little impediments for a foreign company like our client to provide XXXXX TVET service in Myanmar as the Myanmar government sees this as a crucial investment if they want to upgrade the skills of the Myanmar workers. As long as the owners have the industry experience and the international accreditation necessary to teach such a course they will be welcome to invest in Myanmar to start such as service. “There is no need to enter in to a JV in order to run such as service” (We need to qualify this statement as this is what the various ministries in Myanmar are telling us. By the time our client decide to launch the service the law or regulation might have changed).
- There are 3 possible JV partners should you want to enter into the XXXXX TVET business in Myanmar. See Table 2 below.
Our client should consider meeting with the 3 possible JV candidates to discuss further about some initial feasibility studies or collaboration. As XXXXX has shown keen interest to work with XXXXX even though it does not know the client’s identity – XXXXX should be the first candidate that our client see when in Yangon.
To learn more about how to reach your target customer in a cost-effective way in Myanmar click here