Jul 5, 2011

Vietnam companies enter Myanmar construction materials industry

VIETNAM is taking steps to build its influence in Myanmar – literally. In mid-June, representatives of several Vietnamese firms signed joint venture agreements with construction companies to build brick factories here.

U Soe Min Naing, director of Shine Group of Companies, said his firm had agreed to jointly develop a US$10 million brick factory outside either Yangon or Nay Pyi Taw with Viglacera Corporation that will produce a “massive” amount of bricks every year.

“We’re waiting for permission to build in either Nay Pyi Taw or Yangon. We plan to build on 35 hectares of land and are aiming to produce about 80 million bricks a year.

“The construction industry has a never-ending need for bricks and our aim is to produce high-quality bricks to fill that requirement,” U Soe Min Naing said.

U Aung Zaw Win, Shine’s chairman, said the deal had been struck with Viglacera Corp of Vietnam during a visit by a high-level Vietnamese delegation on June 12.

A second joint venture agreement to develop projects was signed by U Thet Naing Oo, vice president of Naing Group Construction, during the same tour.

“The Vietnamese delegation, which included Vietnam’s construction minister, spoke at length during the meeting about playing a role in the industrial and construction sectors here.

“They want to cooperate with big construction firms like ours,” U Thet Naing Oo said.

He said that during the meeting he had agreed with one company to send trainees to Vietnam to oversee the company’s construction operations.

“We have a lot to learn from Vietnam’s construction industry. There, construction firms can easily build 40-storey high-rises but we’re limited to 16 floors in most cases here. We have the capability to go higher but our technology is not ready yet,” said U Thet Naing Oo.

An anonymous developer based in Mingalar Taung Nyunt township said the arrival of Vietnamese investment is a positive development for the industry.

“Strong competition can only boost quality in the construction industry,” he said.

He added that if foreign investors did arrive in large numbers they would quickly overwhelm the available supply of luxury housing and condominiums and more would need to be built.

However, he said current laws should be amended to create a level playing field for both sets of partners in joint ventures.

“It’s more important that we put in place foreign investment bylaws to make sure that everybody has the same opportunities,” the anonymous developer said.

U Ko Ko Htwe, vice president of Myanmar Construction Entrepreneurs Association, said foreign investors could add some much needed capital to the industry.

“Agreements with international firms could be beneficial because the investors have access to better technology and cash supplies that do not exist here at present,” U Ko Ko Htwe said.

“It’s true that we’re weak in terms of quality control and ensuring that companies have the funding to follow through on projects. These are weaknesses that we need to address if greater foreign investment is allowed,” U Ko Ko Htwe said.

He added that Vietnamese companies have registered a strong interest in Myanmar’s construction sector, specifically looking to build cement factories, hotels, hospitals and serviced apartments but said Malaysia was not far behind.

Source: Myanmar Times