Jul 21, 2016

Foreign JVs cleared to trade construction materials

The Ministry of Commerce has eased trade restrictions for construction materials on local-foreign joint venture firms in Myanmar.

Previously, construction material trade was only permitted for state-owned and local firms.

“There are some processes that must be completed to start trading construction materials. Joint-venture companies must be registered under the trading category at Myanmar Investment Commission (MIC). They again have to apply for an import and export licence at the Ministry of Construction for materials import,” deputy permanent secretary of Ministry of Commerce, U Khin Maung Lwin, told Myanmar Business Today.

Any joint-venture company in trading category can import construction materials, but companies based in construction must apply to MIC to change their business category first.

The liberalisation aims to develop the construction industry by expanding access to quality construction materials amid a wave of foreign investment into the industry, according to the Ministry.

The imported materials have to meet MoC-set standards and also are allowed for retail and wholesale distribution in the domestic market, according to a Ministry notification.

The trading licence includes allowances for both exports and imports, but the construction industry in Myanmar has yet to develop to a point where they could export products. Imports have been increasing in recent years.

Myanmar’s construction industry grew 7.7 percent in the fiscal year 2014-15 and is expected to grow 8.3 percent in 2015-16, according to Oxford Business Group research. Foreign investment in the country’s construction sector amounts to $37.7 million as at the end of June.

With the relaxing of trade restriction for joint venture firms, prices of high-quality building materials will become more competitive in the domestic market, according to U Soe Min Naing, director of Shine Construction Company.

“The liberalisation of construction materials will impact international higher-standard materials’ availability in the domestic market and result in cheaper competitive market prices,” U Soe Min Naing Aung told Myanmar Business Today.

The Ministry announced that it will adapt the changes on the list of the permitted companies depending on domestic market demand, market situations and domestic business development as needed.

Regulations on agricultural product exports and imports like fertilisers, pesticides and seeds were eased earlier this year.

Source: Myanmar Business Today