By Htin Lynn Aung
Yangon, Myanmar, July 21, 2016
The investors behind Myanmar’s first special economic zone will start accepting proposals for factories in second zone known as “Zone B” at the end of the rainy season, as both phases of “Zone A” near completion, with US$760 million in foreign investment committed to the project so far.
Myanmar Thilawa SEZ Holdings chair U Win Aung told The Myanmar Timesthat the first zone, covering 400 hectares, is almost finished. Seventy-three foreign investors from 16 countries have agreed to invest in the project, which is located in Thanlyin township, around 25 kilometres (16 miles) south of Yangon.
“We will begin to process applications for the remaining 2000 hectares of land in “Zone B” after the rainy season,” U Win Aung said.
After a slow start, investment into the SEZ gathered speed in April 2015, according to an announcement earlier this week by Myanmar Japan Thilawa Development, a special-purpose company set up by the project’s investors to develop and operate the project.
At the current level of investment, manufacturing capacity can reach up to $241 million dollars a year, MJTD said. The company expects total investment into Thilawa to reach $1 billion in a few years and the value of annual production to rise to $350 million. “These forecasts are made by MJTD and we wanted to make them public,” said spokesperson U Myint Zaw, general manager of the administration and HR department.
The company said more than 40 factories have already been built, including five garment factories, 15 construction sector-related factories for products such as steel materials and cement, 11 food and beverage factories including packaging and tins, six agriculture-related factories including chemical fertiliser and machine parts, five factories for motor vehicle parts, and three producing medicines and medical equipment.
Investment into Thilawa accounted for 12.5 percent of total investment into Myanmar in fiscal year 2014-15 and 3pc of total exports, MJTD said. In the same financial year, foreign investment was worth more than $8 billion and exports came to $12.52 billion, according to data collected by the Ministry of Planning and Finance.
The SEZ is a joint venture between Myanmar and Japan – each government has a 10pc stake while a consortium of nine local companies called Myanmar Thilawa SEZ Holdings (MTSH) controls 41pc and a Japanese private-sector consortium controls the remaining 39pc.
Zone A will create “at least” 40,000 jobs by 2018, according to a document filed by MTSH to the Yangon Stock Exchange earlier this month.
The company will require more capital over the next two years to start work on Thilawa Zone B, project director U Thurane Aung previously told The Myanmar Times. The board has not yet decided whether to raise new capital by issuing new shares through the stock exchange or by taking out a loan, he said.