Sherpa Hossainy's Blog

Myanmar Petrochemical Enterprise to Let Trading Ironclad Slide; To Privatise Thanlyin Refinery

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 2, Issue 28) on Jul 10, 2014

State-run Myanmar Petrochemical Enterprise (MPE) is seeking a foreign partner to launch a joint venture in a bid to privatise an oil refinery, the entity under the Ministry of Energy announced.

MPE on July 8 invited a tender to operate and carry out the rehabilitation of No.1 Refinery (Thanlyin), about 14 kilometres outside Yangon, to “improve its production capacity.”

The project, which will be licensed under the Foreign Investment Law, will also undertake the import, distribution and storage of a wide range of petroleum products, it said.

The partnership is expected to land the potential foreign partner a petroleum trading licence – an unprecedented move that will curb MPE’s longstanding quasi-monopoly over petroleum trading in the Southeast Asian country.

“It’s a licence to print money,” a source in the oil and gas industry who is intimately familiar with the project told Myanmar Business Today.

“This is the first time the government is going to allow a foreign firm to benefit from the trade of petroleum products.

“If you wanted to get a head start in Myanmar’s highly lucrative petroleum sector this is your permit to trade. This is it,” said the source, who wished to remain anonymous.

He said this is going to be “tremendously interesting” for big Japanese trading houses like Mitsui and Itochu, who will be eagerly pursuing this.

The partner may also receive a licence to deploy a subsea pipeline and pumping station allowing pumping oil directly to Yangon, thus dramatically reducing the cost of petroleum distribution. Currently, the oil is transported in a cumbersome and expensive manner through boats over the Thanlyin river.

The Thanlyin refinery is one of the three refineries in Myanmar and the largest. It has storage facilities, which is rare in Myanmar, and can store crude oil and condensate (229,600 million gallons), gasoline, jet fuel, diesel and LPG (5,500 tonnes).

However, another crucial aspect is that the facility has 745 acres of land for future expansion.

The source said technical consultants for the project have estimated that the current facility can be turned into a $2-billion refinery taking advantage of the extension provision. Dutch oil giant Shell and Malaysia’s Petronas will be very interested in this, he added.

He said another sweetener for the deal would be that the operating facility, along with the land, will come with all the necessary permits that are required.

“It’s very hard to start a refinery because you don’t get the licences, particularly environmental licences. Now [the partner will have] the government as a shareholder, grandfathering in, bringing all the licences that you need.”

In terms of requirements, MPE is seeking businesses that have experience owning and operating refineries, but also with experience in importing and distributing crude oil and petroleum products. A consortium, comprising a refinery operator and a supplier of fuel, is also possible given it’s a strong combination.

To be eligible to submit a proposal, an applicant shall be a company or a corporation or a consortium, and must be involved in, for at least three consecutive years, a direct or indirect interest of at least 50.1 percent and management control of “refinery(s) with a total production of at least 500,000 barrels per day (BPD) as at 31 December 2010”; and “a business or a division engaged in the importation of crude oil, and/or the importation, sales and distribution of petroleum products,” MPE announced.

MPE also stipulated that the import, sales and distribution activities of the company must have started no later than 31 December 2010, while the volume of crude oil import or sales and distribution of petroleum products has to be at least 20 MM barrels per annum for the last three years.

“An important factor is access to cheap fuel and that comes with volume.

“We are talking about somebody who has his own production such as Shell, Petronas or Thailand’s PTT or we are talking about a huge independent firm who is able to buy oil at very competitive rates,” the source said.

The move is seen as MPE trying to start with a very small refinery but which happens to have the growth potential to become a huge one that might compete with products that are currently being imported.

“There are huge refineries in Thailand, Malaysia, Indonesia, Japan and China, so it’s very difficult to compete with those. But with a large facility [MPE] might be able to do that.”

The documentation related to the tender will go on sale on July 14 and can be purchased upon paying a non-refundable fee of K3 million ($3,000). Detailed payment information is available in the ministry of energy’s website.

The deadline for submitting the bid is October 13, while there would be opportunity for applicants to perform due diligence and seek written clarification in relation to the project until September 12, MPE said.

De Gucht Kicks Off Investment Pact Talks with Myanmar

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

The European Union (EU) seeks legal certainty and preferential access for its investors

Published in Myanmar Business Today (Vol 2, Issue 13) on Mar 24, 2014

European Union Commissioner for Trade Karel De Gucht last week launched negotiations for a bilateral investment protection deal with Myanmar, a move to provide legal certainty for European investors and give them preferential access in the former-pariah nation.

“If you want to stimulate European investors to actually invest in Myanmar, it’s important that they are certain that their investments are duly protected,” De Gucht told Myanmar Business Today before kicking off the talks with Dr Kan Zaw, union minister for National Planning and Economic Development in Nay Pyi Taw.

“The deal will mean, for example, investors will be indemnified and can’t be expropriated, have provisions of international arbitration in case of a dispute, among others.”

De Gucht said trade relations now are “not only about exports, but also about investing in a country” as trade gets increasingly dominated by supply chains of several countries working together to make a finished product.

“It’s important to give confidence to them [investors] because there are so many places where Europeans can choose to invest. You have to create good provisions [here] to attract investments,” said the trade commissioner who was in the country as part of a Southeast Asian tour to bolster trade links with Myanmar, Vietnam and Cambodia.

“Experience is showing how opening up to trade is helping these dynamic countries raise living standards. At the same time, their markets provide opportunities for European exporters, so we really do have a win-win situation,” he said in a statement before his visit.

The EU rewarded the current government’s political and economic reforms by lifting sanctions and reinstating the Everything but Arms (EBA) initiative under the Generalised Scheme of Preferences (GSP) in July last year. In 2013, bilateral trade between the EU and Myanmar stood at €569 million ($784 million), compared to €403 million ($555 million) in 2012, a 41 percent increase.

De Gucht said: “EBA is not a sectoral approach. Myanmar will be able to export everything except arms with duty and quota-free advantage to the European market of over 500 million consumers. It seems logical to me that you start with your classical sectors garment, fisheries and gemstone.”

He said Myanmar, however, has an opportunity to develop new export sectors in the European market, citing example of Cambodia, which developed its bicycle industry under the EBA scheme and exported 1.4 million units last year.

“Exporters should explore opportunities in the EU market and try to find new niches and sub-sectors where they can have a competitive advantage. We can help exporters, but the private sector also has to take initiative.”

Myanmar exports to the EU increased by 35 percent in 2013 to reach €223 million ($307 million) compared to €165 million ($227 million) in 2012. While previously focussed on garments (66.9 percent), fisheries products (8), rice (4.4) and beans (4.3), in 2013 Myanmar’s exports saw the share of garments drop to 58.2 percent, with exports of precious stones (11.7 percent) and wood products (7.8 percent) re-entering the country’s export base.

De Gucht also launched a Handbook for Exporters on EU Trade Preferences in Yangon during his two-day official visit at the Union of Myanmar Federation of Chambers of Commerce (UMFCCI).

The free-of-charge publication, which has been published in Burmese and in English, provides guidance for companies and institutions on the procedures of the EBA initiative under the GSP. “The handbook on GSP is a tool to help exporters make the best possible use of these trade preferences,” the EU said.

The EU is also in the process of selecting proposals for the establishment of a European Chamber of Commerce in Myanmar, in a bid to boost advocacy of EU business in Myanmar.

The pact

“This investment agreement could become an important accelerator for the reform process in Myanmar,” said De Gucht after starting the negotiations.

“Experience has shown that improving legal certainty and predictability for investments is key in providing business opportunities and much-needed development for this growing economy.”

Currently, there is no bilateral investment treaty in place between Myanmar and any EU member states. An agreement would offer EU investors key guarantees in their relationship with Myanmar such as: protection against discrimination; protection against expropriation without compensation; protection against unfair and inequitable treatment; protection for the possibility to transfer capital.

“These provisions provide guarantees to companies that their investments will be treated fairly and on an equal footing to other investors,” the EU said in a statement.

However, the investment agreement will not interfere with the right of the state to regulate to pursue public policy objectives and to work for the development of the country and its people, as a balance between the right to regulate and to pursue legitimate public policy objectives and the need to protect investors will be ensured, the EU said.

Both parties will ensure that the dispute settlement system is transparent, that it does not encourage unsubstantiated and frivolous claims, and that arbitrators respect a code of conduct, the EU and the Myanmar government said in a joint announcement.

When asked if the EU thinks there is a chance of Myanmar backsliding on its reforms, De Gucht said: “We decided to have such a negotiation when President Thein Sein visited Europe. Now, we have a mandate from member states to negotiate the deal. I don’t see any risk of backsliding, I don’t think so.

“We would like to have an investment agreement as soon as possible.”

According to official figures, cumulative EU investments in Myanmar stood at $3.1 billion, only about 9 percent of the total FDI in the country, mostly due to sanctions.

First US Law Firm Aims to Rope in American Investors

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 1, Issue 39) on Oct 30, 2013

Eric Rose, lead director of US law firm Herzfeld Rubin Meyer & Rose Law Firm Ltd (HRMR), speaks during an exclusive interview with Myanmar Business Today. Sherpa Hossainy

When Herzfeld & Rubin PC (H&R), a Manhattan-based international law firm founded in 1948, decided to expand to Myanmar, Eric Rose, the lead director of the new Myanmar firm, Herzfeld Rubin Meyer & Rose Law Firm Ltd (HRMR) wanted to get things right to the last detail to make it  “a proper American office.”

“We have planned to set up our firm for a long time.” It took a while for Rose to get the office up and running but now HRMR boasts state-of-the-art communication facilities with fibre optic internet connection and multiple phone lines, and uninterrupted power supply, which Rose says will allow the foreign clients to communicate with HRMR as they would with their local facilities.

Rose’s perseverance paid off. Following a long, meticulous process of incorporation and office space hunting, in July HRMR became the first US investor in the professional services industry to hold a 100 percent foreign ownership interest under the new Foreign Investment Law (FIL).

A proper American office

“This is 100 percent funded by Americans which is an exception to the FIL. But we got that approval from the Myanmar Investment Commission.

“We are applying the American Bar Association’s ethics standards. We are the only office that does that, to my knowledge. We are also offering an American style of practice,” he said.

HRMR is going to focus on six areas of law: investment, intellectual property, real estate, construction and infrastructure, trading and wealth management. Rose said HRMR’s practice areas are directed to help foreign investors come into Myanmar in an effective way, and also to help Myanmar in its further development.

“Myanmar hasn’t been shown and allowed to pursue the path of development and progress because it was in self-isolation for such a long time, and that’s where H&R can help, using its attorneys’ history of helping develop legal frameworks in several emerging and frontier economies around the world.”

Similar experience & the Myanmar connection

Rose sees a lot of similarities between the 1990s Eastern Europe and Myanmar. In 1995, H&R opened the first American law firm in Romania, and subsequently set up chambers of commerce in Romania, Moldova and Montenegro, among other countries. It also helped write several laws in those countries and brought the very first American investors there, a feat he wants to emulate in Myanmar.

“So many things that are happening here have happened elsewhere [in other countries] before, and HRMR can utilise the same experience.”

Rose, 58, was born in Romania and eventually got expelled from his own country because of being a “student radical”. He lived as a political refugee in France, and later got his law degree and higher education in America, where he settled in the 1970s.

For over 25 years, Rose has concentrated his practice in the global aspects of business development including mergers, acquisitions, privatisations, technology transfers and antitrust counselling. He served in several senior in-house counsel positions at leading companies such as American Standard, Tyco Toys and John Deere, and led M&A and other complex transactions in the US and more than two dozen countries on five continents.

Myanmar isn’t completely new to Rose. In the 1990s, when American Standard had its presence in Myanmar prior to the US sanctions, Rose was handling the Myanmar market through the company’s Thailand office. The result is the ubiquitous presence of American Standard products in Myanmar nowadays, he says.

Lifting all boats at the same time

Rose said helping the Myanmar business community to export their products to the US is equally important togetting US investments into Myanmar – a process he calls “lifting all boats at the same time.”

In 2002, Myanmar exported 75 percent of its garments to the US. When the sanctions hit the former pariah nation, more than 300 factories were closed and 85,000 people, mostly women, lost their jobs, essentially affecting about almost half a million people.

Rose says Myanmar can now reverse the situation and create jobs at a time when there are safety issues clouding Bangladesh, the second largest garment manufacturer behind China; prices of garments from China are skyrocketing because of surging labour prices; in Cambodia, which is the fourth largest, there are capacity issues.

“Myanmar comes with everything – it has the land, the resources and an easily trainable, educated workforce. The garment industry has a tremendous potential here.”

Furthermore, Myanmar’s energy woes, the biggest obstacle in the way of kickstarting Myanmar’s manufacturing industry, is easily solvable, Eric says, albeit it will take some time.

“The renewable energy potential in Myanmar is huge – you have hydropower, wind and solar energy, plus the tenth largest reserves of natural gas.

“Under the previous government most of the reserves were being exported but now Myanmar usage has to be a priority.”

Myanmar is not only wealthy from a resources point of view, many individuals have wealth which can also be used and protected to the holder’s advantage. HRMR’s wealth management practice is specifically directed at the upper echelons of the citizenry. “About five percent [in Myanmar] areconsidered to be rich, about 10-15 percent is middle class. A lot of people have money, but most of them put it under the mattress. They are not using it for the benefit of Myanmar…or, necessarily, themselves,” he said.

The government also recently announced that it has about $7 billion outside Myanmar, and Rose says this enormous amount of money, which is not being deployed at this point, can change the game. He says Myanmar can develop a national fund like Norway, which developed almost a trillion-dollar sovereign fund using its own resources.

Attorneys and other professionals

Dr Andrew Ngun Cung Lian, who was educated in the US and also served as the deputy chief negotiator of the Chin National Front (CNF) in its peace negotiations with the Myanmar government, serves as managing director of the office and leads a staff of five American and Myanmar attorneys.

Also, U Kyaw Hoe, one of the leading civil and criminal litigation experts in Myanmar and a member of the National League for Democracy (NLD) party’s Central Committee, heads HRMR’s litigation practice. He has represented Daw Aung San Su Kyi and U Nyan Win, secretary-general of NLD, and acted as NLD’s spokesperson.

Rose said one thing that distinguishes HRMR from other law offices in Myanmar is that it currently doesn’t have any ex-government employees.

“I know it’s an advantage. Because we can discuss matters both with the government, as well as the opposition, we are not biased in any way.”

The peace process and reforms

Rose says the current Myanmar government can be seen to have good intentions and sincerity about establishing peace and equality among all the ethnic groups in the country.

While Rose agrees that long-lasting peace hasn’t yet been achieved in Myanmar, this is where the country has been heading for the last two and a half years.

“This is why we came here, because we can see an actual change going on. We decided to put our money in because we think this is a place where we can actually help.

“We’ve helped introduced the rule of law in various countries. I’ve introduced the first American investment in Vietnam, and the largest and probably the first American investment in Bulgaria. We can do the same here.”

While Rose says he would not be bold enough to advise the Myanmar government on how they should be reforming their constitution, he said exactly what the changes should be is for the Myanmar people to decide.

“In a democracy you have to have a process where everyone can participate equally. Look around the region and I can’t name one government that fully abides by that rule. So I’m not saying, ‘do what others do.’ This has to be a Myanmar solution, reached by the Myanmar people and through Myanmar means.

“Until now you couldn’t even have everybody at the table. You have to resolve a lot of issues in a very short period of time, which is exactly whatthe government is doing.”

Where the buffaloes roam

American conglomerates and investors have been seemingly tepid in riding the wave of investments in the changing Myanmar, while Japanese investors are extensively getting involved in the Southeast Asian nation’s rebuilding process. With the flurry of Japanese multinationals ranging from automobile to IT giants, the Japanese investment figure is somewhere around $20 billion, Rose says, and points to some factors why the US investors are still not here.

“This country has been closed for so many years, and now you have to explain to people not only where it is, but what it is. The American banks still haven’t gotten the message that the US government has suspended the sanctions and many banks still refuse to deal with Myanmar. We are working with the US State Department and Treasury trying to send the message across.”

Rose said one key element behind the cautious approach taken by the US investors is Thailand, which has a large, well-established American chamber of commerce.

“Thailand is one of the seven countries that have a bilateral treaty with Myanmar guaranteeing investment. So in many cases American businesses are starting from Thailand, and they are moving slowly into Myanmar. Sometimes you’ll find the product but you will not find substantial investment.”

He said when the demand for their products will get sufficiently high, the US companies might eliminate middlemen in China, India, Malaysia or Thailand and make the capital investment over here.

“American investors like to plan things well. My experience shows that when they [American investors] focus they come like the buffaloes – they will all come at once.”

Rose said the US government is already helping and US businesses now just have to come here.

“Unilever is building a factory, Nissan is also building a car manufacturing plant. At some point the Americans are going to say, ‘what do these guys know that we don’t.’ Business is business.”

Ooredoo Launches First Phase of Rollout; Says Getting Permits Taking Longer than Expected

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 2, Issue 11) on Mar 10, 2014

Qatar’s Ooredoo said it has carried out a “successful” technical launch and testing of the first phase of its network rollout, although it’s taking longer for the company to get the permits from the government to build its sites.

The telecom firm said last week it was able to connect its MICT Park headquarters with its Data Centre and immediate surroundings.

“The network enabled testing of voice, SMS and data connectivity. In addition, integration of technology partner Huawei’s IT system enabled the performance of several key functions, including customer activation, billing and Top Up,” Ooredoo Myanmar said in a statement.

Ross Cormack, CEO of Ooredoo Myanmar said, “This successful stage of the rollout, represents an important milestone in the development of our network. It is exciting … for the growing numbers of dealers who are joining the Ooredoo family.”

During the launch event, staff members and invited participants made voice calls, sent and received text messages and they browsed the internet, the company said. Ooredoo claimed the network delivered high quality voice services and fast SMS delivery times.

“Activation and Top Up via SMS, USSD and IVR were instantaneous and web browsing services gave a great customer experience,” it said.

However, Cormack sounded caution saying that the firm is facing challenges while obtaining permits to build its sites.

“Clearly, the delivering scale within tight timeframes is challenging. Obtaining the necessary permits to build our sites is taking longer than we would have hoped.

“Finding solutions to fast-track this process is in everyone’s interests.”

Edwin Vanderbruggen, a partner at VDB Loi, one of Myanmar’s leading law and advisory firms, speaking on his own behalf said the current regulatory framework in Myanmar with respect to land use and construction does not lend itself the national rollout of network infrastructure that the operators need to undertake.

“Myanmar’s regulations on the subject do not recognise the possibility of a nationwide project. The problems with land right documentation, land use changes, lease registration and construction permits are in my personal view too big to keep the regulations as they are,” he told Myanmar Business Today.

“We need a ‘silver bullet’, a regulation that takes care of all these issues in one go.”

Allen & Gledhill Launches Myanmar Associate Firm

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 2, Issue 10) on Mar 2, 2014

Allen & Gledhill LLP

One of Singapore’s largest law firms Allen & Gledhill has launched an associate firm in Myanmar, the firm announced.

Located in the country’s commercial hub Yangon, the associate firm, Allen & Gledhill (Myanmar) Co Ltd, came into operation last month.

The Yangon branch will be headed by Allen & Gledhill partner Minn Naing Oo, who was previously the chief executive officer and registrar of the Singapore International Arbitration Centre, and before that, a director at the Ministry of Trade and Industry Singapore.

Allen & Gledhill (Myanmar) currently has four lawyers, including Minn, while two of them are Myanmar-qualified lawyers, the firm said.

Allen & Gledhill (Myanmar) will offer a full range of legal services including banking and finance, corporate and commercial, corporate mergers and acquisitions and international arbitration, a spokesperson of the firm told Myanmar Business Today in an email.

The launch of the firm is part of Allen & Gledhill’s “strategy of developing a strong Southeast Asia platform to meet the needs of our clients,” she added.

The launch of Allen & Gledhill (Myanmar) follows the establishment of another associate firm, Allen & Gledhill (Laos) Co Ltd in Vientiane.

“Myanmar is the most exciting emerging market in Asia right now with tremendous opportunities for investment and huge growth potential,” Minn told Myanmar Business Today.

Allen & Gledhill has over 300 lawyers, and serves clients in Southeast Asia, China, India, the Middle East, the UK and the United States.

Interra Starts Drilling New Well in Myanmar’s Chauk

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 2, Issue 2) on Jan 9, 2014

Singapore-based oil and gas exploration company Interra Resources Ltd said its jointly controlled entity, Goldpetrol Joint Operating Co Inc, has started drilling a new development well in Myanmar’s Chauk oil field.

The well, CHK1177, will be drilled to a depth of 3,300 feet as an infill development well and a southern offset to CHK1171, another well which was completed as an oil producer in August last year at an initial rate of 125 barrels of oil per day, the company said.

Interra said its primary objective is to accelerate production from the oil reservoirs that produce from the wells in this fault block.

Following a fruitful year in drilling in Myanmar last year, CHK1177 became the first well to be drilled as part of the company’s 2014 Myanmar drilling campaign.

In central Myanmar, Interra holds 60 percent of the rights and interests to two of the onshore producing oil fields in Chauk and Yenangyaung under two Improved Petroleum Recovery Contracts (IPRCs).

The two Myanmar concessions extend over a total area of about 1,800 square kilometres and are located along the Ayeyarwaddy river, about 580 kilometres north of Yangon.

Goldpetrol, the operator of Chauk oil field, said it will continue to use three drilling rigs simultaneously in its drilling campaign.

Interra estimated that the results of the drilling and completion should be available in about six weeks.

CHK1177 is being drilled by using Goldpetrol’s ZJ450 rig, thus drilling costs are expected to be relatively low, Interra said. Interra’s share of the cost of drilling will be funded from existing funds on hand, it said.

Interra is an investment holding company engaged in oil and gas production, field development and exploration. It also owns participating interest in oil fields in Indonesia.

Canadian Miner Gets Exploration Nod

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 1, Issue 42) on Nov 15, 2013

 

Canada-based Centurion Minerals Ltd’s “slate belt” and “bandi” mineral exploration concession applications have been accepted by the Myanmar’s Ministry of Mines, the company said.

The company, which focuses on the exploration and development of gold and other precious metal projects in Southeast Asia, will now initiate a property wide exploration reconnaissance program while it seeks approval from the regional government, it said in a statement.

Myanmar’s exploration and mining permits are currently issued by the central government and allow a mineral concession to be explored for up to five years followed by 25 years of production.

Subject to receipt of all regulatory approvals, Centurion will hold an 80 percent interest in the Myanmar mineral concessions with 20 percent held by its Myanmar partner, Crown Minerals Co.

“Our technical team will be implementing a reconnaissance exploration program shortly in order to generate priority prospects and finalise mineral concession approvals,” Centurion CEO David Tafel said.

The team includes several geologists who have previously explored the prospective areas of central Myanmar, he added.

The mineral concessions under application are road accessible and exploration activities can be carried out year round, Centurion said.

The slate belt concession, located south of Mandalay city, is approximately 692 square kilometers in size. It is bordered by the Moditaung gold mine in the south and the Lebyin gold and polymetallic mine in the east, both discovered by another Canadian mining giant Ivanhoe Mines Ltd in the late 1990s to early 2000s.

The slate belt concession was included in the area operated by Ivanhoe and historical exploration work yielded a number of gold prospects and anomalies within the concession boundaries, Centurion said.

The bandi concession is located north of Mandalay city and is approximately 943 square kilometres in size. The area is flanked by two operating gold mines, one of which is the Phayaungtaung mine located to the south. The bandi concession geology consists of granitic intrusions, marls and other sedimentary rock types, all of which are cut by north-trending structures. Adjacent to the bandi concession, gold skarn deposits are reportedly controlled by these structures.

The two concessions fall within the major gold and associated mineral belts that strike through central Myanmar. Numerous gold occurrences at varying stages of exploration have been noted within the belts, but few have been explored systematically using modern methodology.

UK’s Prudential Becomes Myanmar’s First European Life Insurer

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 1, Issue 42) on Nov 14, 2013

UK-based international financial services group Prudential plc has been awarded a licence to establish a representative office in Yangon by the Directorate of Investment and Company Administration on October 29, the company said.

The move makes Prudential the first European life insurer to establish an office in the recently-opened Southeast Asian country, which is taking its early steps towards economic liberalisation.

The licence to establish a representative office is one of the first steps in the process to receive an operating licence, which will allow Prudential to start offering its services.

Prudential’s re-entry into the market is in step with the growing international support for Myanmar’s efforts to reintegrate with the international community, the company said.

Barry Stowe, chief executive of Prudential Corp Asia, said: “We see immense potential in this country as it continues to reform and progress its economic growth. Prudential is committed to the long-term development of the insurance sector and the capital market in the country.”

Prudential will offer its expertise to support the government’s efforts to develop the financial services available to its people, he added.

The new Prudential representative office, which will be headed by Allen Thai, will lay the foundation for Prudential’s future business operations, while supporting the government’s priorities to develop the financial services sector, the company said in a statement.

Prudential is a core member of the UK-Myanmar Financial Services Taskforce, set up by the Ministry of Finance, the Central Bank of Myanmar, UK Trade and Investment and Standard Chartered Bank.

The taskforce was established this year to support the development of Myanmar’s financial sector, focusing on priority areas to ensure faster adoption of financial services across the market.

The taskforce will also provide relevant training to the private and public sectors, and act as a sounding board to the Minister of Finance and the Central Bank Governor.

Prudential has a long history in Asia and its involvement in Myanmar dates back to 1923 when it had an office on Strand road in the former capital Rangoon.

Headquartered in Hong Kong, Prudential Corp Asia is a business unit of Prudential plc (UK), comprising its life insurance operations in Asia, and its asset management business Eastspring Investments.

Prudential is one of Asia’s leading life insurers, with operations spanning 13 markets, providing a range of savings and protection products to more than 12 million customers in the region. In Asia, it operates in Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

Prudential’s affiliated companies constitute one of the world’s leading financial services groups. It has been in existence for 165 years and has £427 billion in assets under management as of June 30. It is listed on the stock exchanges of London, Hong Kong, Singapore and New York.

Wood Group Grabs $13m Contract in Myanmar

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 1, Issue 31) on Sep 5, 2013

Scotland-based oil and gas services company Wood Group GTS has won a multi-million dollar contract in Myanmar.

The company was awarded a one year contract worth $13 million by a power company in Myanmar to overhaul and upgrade three gas turbines in Yangon, Wood Group said in a statement.

This is the first major contract win for Wood Group in Myanmar.

Wood Group said the overhauls and upgrades are expected to improve the total output of the gas turbines and provide increased reliability to Myanmar’s power production.

Frank Avery, president of Wood Group GTS, Power Plant Services, said, “Wood Group GTS’ experience in fulfilling maintenance requirements as well as their ability to demonstrate value and flexibility were key factors in awarding this contract.”

“Our extensive custom-built solution is designed to help stabilise electrical power for critical supply and help to overcome power shortages occurring in the Yangon region,” Avery added.

The scope of work encompasses the complete overhaul of the gas turbines and auxiliary equipment including supply of new gas turbine parts, rotor overhaul, control systems, gas valve upgrades, and patented EcoValue compressor water wash systems, it said.

Similar Wood Group GTS water wash systems installed on 6B gas turbines within the Asia Pacific region have improved turbine performance, increasing power output by up to 2.1 percent on a 2×1 power block, resulting in approximately $1 million in additional revenue per annum, Wood Group said.

Wood Group operates in 50 countries worldwide, employing around 43,000 people. It’s 2012 revenue stood at about $7 billion.

Wood Group has three businesses – Wood Group Engineering, Wood Group PSN and Wood Group GTS – providing engineering, production support, maintenance management and industrial gas turbine overhaul and repair services.

Deloitte Joins Other “Big Four” in Myanmar

Posted in Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 1, Issue 1) on Jan 24, 2013

Professional services firm Deloitte announced last week that it has established its presence in Asia’s new economic frontier Myanmar, joining other big-four accounting and audit firms.

Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, has set up an Independent Correspondent Firm (ICF) in Myanmar through leading local professional services firm Myanmar Vigour. This paves the way for Deloitte to offer a suite of professional services to clients looking to capitalise on the opportunities in the newly-opened country.

Deloitte’s new Independent Correspondent Firm in Myanmar will support development of the country’s opening economy through provision of a complete range of tax, consulting, advisory and accounting services, a Deloitte statement said.

Chaly Mah, Deloitte’s Asia-Pacific chief executive, said that with reform and the lifting of sanctions in Myanmar happening at a clip, many of Deloitte’s clients across all industries are looking to tap the business opportunities in the country.

“By combining the deep local knowledge of Myanmar Vigour with specialist expertise from the global Deloitte network, we are best positioned to help new and existing clients in Myanmar develop and consolidate their market leadership,” Mah said.

The establishment of the ICF will connect Myanmar Vigour with access to a global network of professionals in over 150 countries. The firm will continue to be led by founder Soe Win, a leader in the industry with over 30 years’ experience of the local regulatory and market environment.

Deloitte is one of the “Big Four” professional services firms along with PricewaterhouseCoopers (PwC), Ernst & Young, and KPMG.

Deloitte is the second largest professional services network in the world by revenue and has 193,000 employees in more than 150 countries providing audit, tax, consulting, enterprise risk and financial advisory services. In FY 2012, Deloitte earned a record $31.3 billion in revenues.

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