MIC seeks investments in logistics, manufacturing
The Myanmar Investment Commission (MIC) is seeking to scale up domestic and international investments in the logistics and manufacturing sectors, according to law firm DFDL.
The commission invited investors to develop logistics services located in major urban areas as well as trading hubs on December 26 last year. The specific types of investment areas open for participation include dry port services, bonded warehouse services, highway bus and freight terminals, as well as warehouses and wholesale centres.
Mandalay’s first dry port – developed by Kerry Logistics – started running in July last year, according to the Mandalay Region Chamber of Commerce and Industry (MRCCI). A dry port is an inland intermodal terminal directly connected by road or rail.
Another two dry ports are being built in Ywathagyi in Yangon Region and Myitnge in Mandalay. Both are expected to be completed by April 2019, a spokesperson for Myanma Railways had said. Kerry Resources Transport will build the Ywar Thargyi dry port, while Kerry Logistics Company won the tender for the Myit Nge dry port. Plans are currently being drawn up to construct the two ports.
For now, bonded warehouses are only permitted in Thilawa Special Economic Zone (SEZ).
Earlier last year, Daizen Myanmar, based in the SEZ, became the first company in the country to have bonded warehouse. By having bonded warehouses, goods can be taken out of the ports before going through the customs clearance process.
The Myanmar Times understands that the first trial of bonded warehouse is currently in operation and is expected to conclude by the end of this month.
Daizen’s managing director Tomoaki Yabe said in July that some warehouse operators outside Thilawa might want to apply for a bonded license but could not do so. No bonded warehouse regulation means increased congestion at the port, leading to a longer clearance process and extra cost incurred such as detention and demurrage charges. Customs department was in the process of drafting the regulation for non-SEZ bonded warehouses.
Thilawa SEZ, located in southern Yangon, is the only SEZ in operation in Myanmar, while two other prospective SEZs – Kyaukphyu SEZ in Rakhine State and Dawei SEZ in Tanintharyi Region – are in the planning process.
On 22 December 2017, the MIC also invited investors to invest in the manufacturing of around a dozen areas, including different types of vehicles and vehicle related to fixed machinery and machinery parts, tractors and trailers, telecommunication equipment, machines and machinery equipment, electricity distribution and control apparatus, iron and steel, fertilisers, plastic raw materials, paper, synthetic fibers, edible oil, medicine and cosmetics products.
For those manufacturing activities, the MIC has given assurances that it will provide the necessary assistance for land rights and electricity supply in order for the businesses to operate. It will also expedite the review process of all investment proposals submitted.
Most of the investment areas listed are among the administration’s promoted investment sectors specified by the MIC. Investors who take part in these industries will be entitled to income tax exemptions according to the new Investment Law and the related rules.
These invitations to invest seek to facilitate more inward investment into the country. As of the third week of December 2017, the MIC permitted and endorsed 174 foreign direct investment (FDI) enterprises, in which FDI into the Thilawa SEZ is notable. These investments in total amounted to over US$5 billion.