May 26, 2013

SMEs urged to invest in Myanmar

With ample business opportunities arising from the upcoming Asean Economic Community (AEC), Thai businesses are urged to set up a foothold in neighbouring Southeast Asian nations despite unclear investment regulations in Myanmar.

Prachuab Supinee, Thailand's commercial counsellor in Myanmar, called on Thai companies including small and medium-sized enterprises (SMEs) to develop a presence in Myanmar to understand the market and find partners.

"If you are actually in the market, you will know the market potential. SMEs in particular will never know what's happening there if they don't invest," he said on Thursday at an AEC seminar hosted by KPMG Thailand.

"Development is happening quickly in Myanmar. After opening the Mandalay checkpoint for foreign access, it opened two more checkpoints last month including one at Ban Phu Nam Ron in Kanchanaburi."

Myanmar's manufacturing sector does not have enough capacity to serve domestic demand, providing opportunities for Thai companies to set up production or distribution there. Of a population of 48 million people, 80% are in favour of imported products, especially Thai products, because they believe the goods are better quality than those locally made, said Mr Prachuab.

"I don't see any major obstacles for doing business in Myanmar," he said.

Nuttaphong Visitkitchakarn, Kasikornbank's chief representative in Yangon, said some issues remain unclear.

For example, it remains murky when foreign banks will be allowed to open branches. At present, 30 representative offices of foreign banks operate in Myanmar, and it is likely the country will allow joint ventures with local banks next year, said Mr Nuttaphong, adding that it will take two more years for insurance businesses to set up there.

"I wouldn't recommend investing in a plant in Myanmar right now, but if you start a trading business, there is nothing to worry about," he added.

The Commerce Ministry reported Asean is the largest export market for Thailand, with shipment value doubling the size of markets such as the US, Japan, and the EU. Exports to Asean are worth US$56 billion annually.

Source: Bangkok Post