BUSINESS

Friday, November 20, 2015

INDUSTRAIL ZONES AND SPECIAL ECONOMIC ZONE IN MYANMAR 11/2015






This compendium focuses on recent articles related to the development of industrial estates in the major urban centres of Myanmar. Although the clustering of traditional craft industries was common in towns and cities throughout Burma in the colonial era, it was not until the 1950s that modern industrial complexes such as those in the Pyay district of central Burma and in several parts of Rangoon began to take shape.   The displacement of urban core residents and small enterprises that took place in the late fifties also led to the development of industrial sites in satellite towns on the east side of the capital.  But it was only in the 1990s, following the opening to privately owned industries by Burma’s military government, that the push to develop industrial zones throughout the country began in earnest.   
Today there are more than fifty industrial parks scattered throughout the country, about half of them in the area around the national capital. Some, like the new complexes at Indagaw near Bago and the two near Kyaukse in Upper Myanmar are exclusively reserved for state-owned factories. Others are being developed with foreign capital for foreign-owned enterprises or foreign companies that have entered into joint-venture agreements with holding companies of the military government.  Most of the new industrial estates are being developed by the Department of Human Settlement and Housing Development of the Ministry of Construction specifically for privately owned industries. Over 6,000 of the 50,000 privately owned manufacturing enterprises in the country are now accommodated in these zones.   Recently, several privately owned land development companies have begun their own industrial parks in the Yangon area in collaboration with the DHSHD.
The articles in the compendium are arranged in chronological order with the most recently published at the top of the list. 
The articles have been selected on the basis that they are representative of initiatives and challenges faced in the rapidly developing industrial zones of Myanmar.






TABLE-4.1      INDUSTRIAL ZONE UNDER MIDC
Established by Department of Human Settlement Housing Development (DHSHD)

Sr. No.
MIDC Industrial Zone
State/Division
Name of Zone
Year of Establishment
Area (acre)
No. of Industries
1
Yangon East District
Yangon Division
(a) South Dagon Industrial zone-1
1992
475.354
128

   
   
(b) South Dagon Industrial Zone-2
1992
203.784
525

   
  
(c) South Dagon Industrial Zone-3
1995
35.280
371

  
  
(d) North Okkalapa
1999
109.789
115

  
  
(e) South Okkalapa
1999
25.000
98








  
  
(f) Shwe Paukkan
1992
94.640
72

  
  
(g) Thakayta
1999
200.000
82

  
  
(h) Dagon Seikkan
2000
1208.695
24
2
Yangon West District
Yangon Division
Yangon West District Industrial Zone
  
  
  
3
Yangon North District
Yangon Division
(a)Hlaing Thayar
1995
986.540
219

  
  
(b)Shwe Pyithar
1990
306.976
101



4
Yangon South District
Yangon Division
Yangon South District Industrial Zone
  
  
1075
5
Mandalay
Mandalay Division
(a)Industrial Zone-1
1990
809.510
661

  
  
(b)Industrial Zone-2
1997
137.000
333
6
Myingyan
Mandalay Division
Myingyan Industrial Zone6
  
163.590
306
7
Meiktila
Mandalay Division
Meiktila Industrial Zone
1997
385.450
81
8
Monywa
Sagaing Division
Monywa Industrial Zone
1992
296.700
490
9
Yenangyaung
Magwe Division
Yenangyaung Industrial Zone
1998
98.810
137
10
Pakokku
Magwe Division
Pakokku Industrial Zone
  
321.000
448
11
Bago
Bago Division
Bago Industrial Zone
  
  
35
12
Pyay
Bago Division
Pyay Industrial Zone
  
  
124
13
Pathein
Pathein Division
Pathein Industrial Zone
1993
  
326
14
Myaungmya
Pathein Division
Myaungmya Industrial Zone
  
101.650
58
15
Hinthada
Pathein Division
Hinthada Industrial Zone
  
  
482
16
Myeik
  
Myeik Industrial Zone

  
153
17
Taunggyi
Southern Shan State
AyeTharyar Industrial Zone
1999
287.000
342
18
Mawlamyine
  
Mawlamyine Industrial Zone
  
162.400
326
Source : MIDC (2000-2015)
4.1 Myingyan Industrial Zone
Out of the 18 industrial zones, Monywa, Mandalay, Pakokku, Meiktila and Taunggyi industrial zones are able to assemble automobiles. Like these zones, Myingyan Industrial Zone has the capacity to manufacture automobiles. Therefore, facts about Myingyan Industrial Zones are compiled and presented for the enthusiasts.
Myingyan Industrial Zone is located in the southern part of Myingyan municipal area east of Myingyan-Meiktila motor road, south of Thazi-Myingyan railroad and west of Sunlun Creek.  Firstly, measures were taken for ensuring water and electricity supply that was essential for the zone.  There are 1134 workers in 275 workshops and factories of the zone. The workshops                                            
one textile and garment factory, 16 engineering workshops, 10 tin workshops, 87 foodstuff factories such as purified drinking water factory, ice factory, oil mill, flour mill and rice Printing house, one timber and ceramic ware factory and four weaving machines and the rest 145.Are  lathe, welding, crushing, dynamo, battery, pump, wiring, plastic, thanaka, and automobile workshops.One telephone was installed for the industrialists in the zone for the time being.  Shops and restaurants were built and sold on instalment, at a price of K 350,000.
In edible oil production, four entrepreneurs are engaged in large-scale production, ten in medium and 58 in small-scale production. An oil mill in heavy production has a capacity to produce 3.59 tons of edible oil (10 barrels) a day and the small ones a capacity to produce 0.716 tons (four barrels) a day. They produce groundnut, sesame and cotton oil daily and thereby contributing to edible oil sufficiency.
In the sector of farm implements production, entrepreneurs of lathe and welding workshops manufacture four-inch pipes, two-inch pumps and two-inch compressors and sell them at a price of K 30,000, K 17,000 and K 20,000 respectively.  The workshops also manufacture grinders for rice and maize. The entrepreneurs are also manufacturing oil-press in various sizes ordered by customers.
The glory of Myingyan Industrial Zone is the assembling of Myay Latt jeeps.  Design for the left-hand drive jeep with Truro engine/4WD and flat bonnet is transformed from the type of Mazda jeep.  The front part of the jeep is four feet, the body, 8 feet with 5.5 feet in width. The assembling line is built on plot Nos 9, 10 and 11 with 300 feet in length and 100 feet in width. Myay Latt jeeps will be on the run throughout the country in the near future.
For the development of Myingyan Industrial Zone, two experts from the zone attended the Second UNIDOTQM meeting on industrial development. Moreover, 70 students from technological college made their field study tour of Myingyan Industrial Zone from 4 December 2000 to 3 March 2001 and another 28 students from 1 April to 30 June 2001.
To catch up with the development of other industrial zones, industrialists of Myingyan Industrial Zones are needed to follow the guidance given by Head of State Senior General Than Shwe at the Myanma Industrial Exhibition-2003 held at Hsinpyukan Grounds in Mandalay. The Senior General said that measures are to be taken for ensuring upgrading of the factories to modern equipment-installed level from forge level, then to highly mechanized factories and to factories that are computerized. In so doing, Myingyan Industrial Zone will become the one which can realize the aims of Myanma Industrial Development Committee.                                               
4.2 Industrial Zones in Yangon
The Department of Human Settlement and Housing Development (DHSHD) is developing industrial zones in Yangon Division for the local investors as well as the foreign investors with the objective of creating more employment opportunities, promoting of urban development, promoting of technical know-how and expertise.  Most of the industrial zones were developed by the DHSHD.  Foreign investors are also allowed to invest at the local industrial zone by permitting them a long term lease with the permission of the Myanmar Investment Commission (MIC).
With regard to the development of industrial zones, leasing of the industrial lands based on the B.O.T system and Joint Venture system can be negotiated with DHSHD.  International standard zones with infrastructure such as Mingaladon Industrial Park (Japan), Thanlyin Kyauktan Industrial Zone (Singapore) and Hlaing Thayar Industrial Zone (Thailand) are also established on joint venture basis with foreign investors. Yangon Industrial Zone was jointly developed by the Government with the local entrepreneur, Zay Kabar Co., Ltd.
In Yangon, 19 industrial zones are scattered in 8 townships and there are 4 industrial zones in Shwe Pyi Thar township, 3 in South-Dagon township, 5 in Hlaing Tha Yar township, 1 in Shwe Pauk Kan township, 2 in Mingalardon township (Mingalardon garden park and Yangon industrial zone), 2 in Thanlyin Kyauktan township, 1 in East Dagon Township and 1 in Dagon Port township.  Local entrepreneurs can purchase an industrial plot at the price of Kyat-9 million per acre in all industrial zones except Yangon Industrial zone.  In Yangon Industrial zone, price for one acre is Kyat 15 million. Foreign investors can lease an industrial plot at the price of USD - 3 per square metre per annum.
Every factory can apply to the Township Office of Myanmar Electric Power Enterprise for electricity with work-load. Deposit Fees has to be paid to the Head Office of Myanmar Electric Power Enterprise according to KV. For example, deposit amount for 100 KV is about US$ 2000. Power charges is US$ 0.08 per kilo-watt per hour & US$ 0.008 per 1 unit using transformer.
With the recommendation letter from Housing Department, every factory can apply telephones to the Ministry of Communications, Post and Telegraphs. In every industrial zone, CDMA telephones and Radio telephones are available. Digital telephone lines are available in Hlaing Tharyar Industrial Zone 1- 4, Shwe Pyi Thar Industrial Zone - 1, Dagon Port Industrial Zone , Yangon Industrial Zone and Mingaladon Industrial Park. Lease fees for every types of telephone is around US$ 2000.
In all other Industrial Zones except Hlaing Tharyar Zone, water from tube-well is good for both drinking and use.  Most of the factories in Hlaing Tharyar need to buy mineral water for drinking, but some use filters for tube well water.  In Thanlyin Kyauktan Industrial Zone, Housing Department arranged for water supply and provide to the factories in that zone. Price is US$ 0.8 per metric ton.
TABLE-4.2               Industrial Zones in Yangon Division [circa Sep, 2001]
Sr. No.
State/ Division
Name of Zone
Year of Establishment
1
Yangon Division
Shwe Pyi Tha Industrial zone-1
1990


Shwe Pyi Tha Industrial zone-2
1999


Shwe Pyi Tha Industrial zone-3
1999
2
Yangon Division
Pauk Kan Industrial Zone
1990-91
3
Yangon Division
South Dagon Industrial Zone-1
1992


South Dagon Industrial Zone-2
1992


South Dagon Industrial Zone-3
1997
4
Yangon Division
Hlaing Tha Yar Industrial
Zone-1
1995


Hlaing Tha Yar Industrial
Zone-2
Feb, 1995


Hlaing Tha Yar Industrial
Zone-3
2000


Hlaing Tha Yar Industrial
Zone-4
2000


Hlaing Tha Yar Industrial
Zone-4
2000
5
Yangon Division
Dagon Port Industrial Zone-1
1997
6
Yangon Division
Thanlyin-Kyauktan Industrial Devlopment Zone
1997
7
Yangon Division
Mingalardone Industrial Park
1998
8
Yangon Division
Dagon East Industrial Zone
Aug, 2001
9
Yangon Division
Yangon Industrial Zone
Feb, 2000



4.2.1 Shwe Pyi Thar Industrial Zones 
Industrial zone - 1 in Shwe Pyi Thar township was developed in 1990. That zone is the first industrial zone developed by the government. Total 100% of (306.967) acres in that zone was already sold out. The number of factories running in the zone are 114 and 45 factories are under construction. Only one 100% foreign company is running in there. It takes about 30 minutes drive from Down town to Shwe Pyi Thar Industrial Zone.  Industrial zone - 2 in Shwe Pyi Thar township was developed in 1992. 35% of total (158.7) acres was sold out. But, only 4 number of factories are still under construction.  Industrial zone - 3 was developed in 1999. 100% of total 194.25 acres was already sold out. Only five companies are operating business. Industrial zone - 4 is in the development stage of infrastructure and not yet sold out.
4.2.2 Shwe Pauk Kan Industrial Zone  
Shwe Pauk Kan Industrial Zone, the smallest one among the zones, was developed for the cottage industries in Noth-Okkalapa township which were doing their small business before 1990-91 in this township.  Therefore only a few foreign companies are also established in this zone. It takes about 45 minutes drive from Down
 4.2.3 Dagon Industrial Zones 
In South-Dagon township, industrial zones 1-2 were developed especially for the local small industries which were doing business in downtown before 1992. Therefore, a few foreign companies are doing business in these zones. Over 800 factories are running and about 700 factories are under construction. Garment, Wood-base, Paper, Plastic and Rubber factories are now operating.
4.2.4 Hlaing Thar Yar Industrial Zone  
            Hlaing Thar Yar Industrial Zone is the second biggest one in industrial zones in Yangon. It takes about one hour drive from down town to Hlaing Tharyar Industrial Zone (Zone 1-5) It is over (1,300) acres for Zone 1 to 4 in Phase - 1 and over (1000) acres for Zone 5 in phase - 2. In Phase -1, all were sold out and total (270) factories are running business in Yangon out of which (9) factories are 100% foreign owned. About (160) factories are under construction. In Phase - 2, 75% of the area were already sold out. Garment, Foodstuff and Household goods factories are operating.
4.2.5 Dagon port (Seikken) Industrial Zone  
Dagon port (Seikken) industrial zone phase - 1 was developed in 1997. Total areas were already sold out. (11) factories are running. In phase - 2, 8.23% of the total (170) plots were already sold out. (3) factories are under construction. It takes about 30 minutes drive from down town.  Nearly 30 factories are running and over 40 factories are under construction. Most of the factories are producing wood-base, freezer, garment, oxygen and household goods.
4.2.6 Yangon Industrial Zone  
Yangon Industrial Zone was developed by the DHSHD and Zay Kabar company in Feb., 2000. Area of this zone is (500) acres for phase -1. About 50% of the area was already sold out to over 30 investors. Five of them are 100% foreign companies. Only 4 factories are in operation. The types of business are garment, wood-base and foodstuff. Manufactures can do the business except cold storage for fishery products, serf uric acid and air pollution. It takes about 45 minutes drive from Down town.
4.2.7 Mingalardon Industrial Park  
Mingalardon Industrial Park was developed by the DHSHD, Mitsui Group, Hong Leong Group (S'pore) and Keppel Group (S'pore) in February, 1998. Total Area for 39 plots is 744650 square metre. Land use premium is USD 50 per square metre. Lease period is up to 7 February, 2048. Only four 100% foreign companies are operating.
4.2.8 Thanlyin - Kyauktan Industrial Zone  
Thanlyin - Kyauktan Industrial Zone was developed by the DHSHD and Simmered International Pte Ltd in 1997. Total Area is (3039.33) acres. Land use premium is USD 50 - 100. Lease period is up to 50 years. Only one factory is operating business. Three companies signed the contracts for land lease. As It is stiuated at the other bank of Yangon and takes about one and half hour drive from Yangon down town.
4.2.9 Dagon East Industrial Zone  
Dagon East Industrial Zone was developed by the DHSHD in August, 2001. Total Area is (500) acres. (58) plots out of (149) plots were already sold out to citizen at the end of Sept. 2001. This zone is divided into 7 parts such as Plastic and Household goods, Chemical products, Electronic goods, foodstuff, wood - base, warehouse and garment. It is situated one hour drive from Yangon down town.
Thanlyin Industrial Estate located just across the Bago River and half an hour drive from Yangon has (3) garment factories, shoe, packaging, glass and plastic packaging material factories. Hmawbi Industrial Estate is about (35) miles from Yangon. There are the brick, plastic, noodles, biscuit, asbestos, cement roofing and ceiling sheets and pharmaceutical raw material factories. Daik-U Industrial Estate is (25) miles north of Bago and about (77) miles from Yangon. This Estate is meant for food industries because tapioca starch plant, monosodium glutamate factory and meat canning factory are set up there. Bago Industrial Estate is 4 miles from Bago and (46) miles north of Yangon. Infrastructure is already established in this estate where a garment factory has already been leased out and a towel factory is established. Sagaing Industrial Estate is situated in upper Myanmar, (17) miles north of Mandalay. A wheat flour mill and garment factory has been established in this estate.
                                   
4.4  Industrial Zones in Myanmar
            The amount of production of Myanmar’s industrial sector from 2011-2012 to 2014-2015 by Region and State are described in the following t
TABLE-4.3       The amount of Production of Myanmar’s Industrial sector        
                                                                                                                         Kyat million
State/Region
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
Kachin
637271.4
698831.7
775429.7
861603.4
984092.4
Kayah
65594.6
67642.2
69145.5
73578.3
79267.7
Kayin
500601.4
549917.5
604056
660666.1
728572.5
Chin
46799.2
52028.6
57108.8
62436.2
65028.1
Sagaing
5055028.5
5605208.4
6301256.3
6866455.6
7596651.6
Tanintharyi
444341.2
469676.4
504830.5
537663.2
569292.5
Bago
3129154.4
3385552.6
3717544.8
4056836.4
4537066.4
Magwe
3218114.3
3510182.8
3900010.3
4367873.6
5174229.5
Mandalay
5863726.8
6528152.3
7289607.7
7895708.6
9130945.3
Mon
1171073.7
1356139.9
1568890.3
1810514.8
2111068.7
Rakhine
924389.9
978849.0
1045334.5
1124990.5
1239409.9
Yangon
20088245.8
22234275.8
24438179.7
27059154.6
29316325.3
Shane
1367130.0
1461091.0
1635467.4
1715898.5
1865175.3
Arrawaddy
3454049.0
3719341.4
3972853.2
4332327.1
4572206.6
Naypyitaw
252367.8
290402.1
344737.6
372405.2
398645.2
Total
46217888.0
50907291.7
56224452.3
61798112.1
68367977.0
Sources:  Planning Department (2010-2015)
                                                     
              
 Figure 4.1      The amount production by Myanmar’s Industrial Sector  
Text Box: Kyat
Year
 
Source       : Table-4.3
According to the data, the production of Myanmar’s Industrial Sector increases year by year. Moreover to increases the production of industrial sector, the government established not only Industrial Zones but also Special Economic Zones(SEZ) such as Thilawa Special Economic Zone, Kyaukpyu Special Economic Zone and Dawei Special Economic Zone


4.5 Special Economic Zones
            The government of Myanmar is implementing three special economic zones for development of manufacturing and increased in job opportunities. These projects are Thilawa Special Economic Zone, Kyaukpyu Special Economic Zone and Dawei Special Economic Zone, out of it Thilawa is most prominent and under implementation.
            The Thilawa Special Economic Zone is situated in Yangon Region. The foundation of Thilawa Special Economic Zone starts with Myanmar- Japan bilateral cooperation MOI which signs at 2012.  It will be the first international standard Special Economic Zone of Myanmar and is developed by a Myanmar-Japan joint venture company with the name of Myanmar Japan Thilawa Development Limited, where the Myanmar government and Japanese government, Myanmar private consortium and Japanese private consortium have stake. The Myanmar government has 10% stake through the Thilwa Special Economic Zone Committee (TSEZMC), the Japanese government also 10% stake through the Japan International Cooperation Agency(JICA), Myanmar private consortium has 41% stake through Myanmar Thilawa SEZ Holdings Public Limited, and Japan private consortium has 29% stake through MMS Thilawa Development Co,Ltd.
 At the first phase of the project covers 400 hectares of land to develop with integrated infrastructure is already accomplished 90% of project and near 500 hectares is under surveying and being made efforts to implement.
            Most of the factories and workshop out of the Thilawa Special Economic Zone trend  to industrial basis, especially focus on Automobile, Textiles, Fast Moving Consumers Good Sectors. Presently, companies from 12 nations are participating in building of the infrastructure. Some of the factories are already in the position to launch the fully operation. It is highly projected that the Thilawa Special Economic Zone create 40000 job opportunities in coming years.
            Dawei is the capital of Tanintharyi Region. Dawei Special Economic Zone is signed MOI between Myanmar and Thai, it is seek in cooperation from Japan apart from Thailand and could able to sign MOI between three nations when 7th Annual Convention of Japan and Mekhaung Cooperation Venues of Japan.
            Dawei seaport and Special Economic Zone is an infrastructure project. Dawei is the capital of Tanintharyi Region. It aims to transform Daewi into Myanmar’s and Southeast Asia’s largest industrial and trade zone. Its aims to develop local businesses, provide local employment opportunities, and stimulate the construction of infrastructure. When completed, it will be the largest industrial zone in South East Asia.                                              
Kyaukpyu Special Economic Zone located in Rakhine Region. Strategically located at the geographic center of three dynamic markets-China, India and ASEAN .Kyaukpyu is well endowed with a natural deep sea harbored and   abundant natural resources in oil and gas, marine resources as well as unique scenic landscapes. It also has sufficient land and labor for industrial development and expansion of residential areas.
From the stem of deep sea project, the government making efforts to implement Kyaukpyu Special Economic Zone project to maximize manufacturing, finished goods supply chain and logistics sector development. Therefore, it can be said that Thilawa Special Economic Zone is well under implementation stage while Kyaukpyu Special Economic Zone and Dawei Special Economic Zone is still under the project title not come to full scene yet.
In fact, building in Special Economic Zone is more complexity process then that of new urban development. It includes interest of investor’s company, sufficient electric supply, requirement of infrastructure, manufacturing medium and market oriented economy prospects. On the base of Special Economic Zones, it would lend to regional employment orientation, technologies and industrial development and maximizing the interest for the nations. Thus, Kyaukpyu Special Economic Zone and Dawei Special Economic Zone should be implemented in pair of Thilawa Special Economic Zone. Industrial developments as well as nation economy will grow only if these projects could be implements in time bound manner.
           







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Table 3.2 Number of Registered Enterprises in States and Regions up to February, 2015
Sr.No
States/Regions
Large
Medium
Small
Total
Percentage
1
Kachin State
46
138
1132
1316
2.94
2
Kayar State
16
280
102
398
0.89
3
Kayin State
100
77
760
937
2.09
4
Chin State
4
7
663
674
1.51
5
Saging Region
300
825
3046
4171
9.32
6
Tanintheryi Region
150
107
1130
1387
3.10
7
Pegu Region
310
894
3433
4637
10.63
8
Magway Region
166
327
2458
2951
6.59
9
Mandalay Region
1181
2376
3978
7535
16.84
10
Mon State
133
260
1903
2296
5.13
11
Rakhine Sate
61
114
1879
2054
4.59
12
Yangon Region
2437
1831
1994
6262
13.99
13
Shan State
216
465
2939
3620
8.09
14
Ayeyarrwaddy Region
522
616
4774
5912
13.21
15
Nay Pyi Taw
98
154
347
599
1.34

Total
5740
8471
30538
44749
100

% of Total
12.83
18.93
68.24
100
100

                                

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