Yangon industrial zone and infrastructure map

Manufacturing and industrial zone site location decisions are irrevocable. The right location decision can have a profound effect on a firm’s success at meeting its strategic, operational and financial objectives. The wrong decision can put it at a competitive disadvantage and, at worst, out of business in a particular market. Determining the optimal industrial zone or site to establish a manufacturing operation can be a daunting task; particularly in developing economies that notoriously lack accurate and reliable information on investment and operating costs and conditions. Nowhere is this more true than in Myanmar, widely considered as Asia’s final frontier economy and today’s rock star investment destination.

 

As one of the earliest business advisory firms to enter the Myanmar market following the suspension of US sanctions on Myanmar in 2012, Tractus has been at the forefront of understanding, analyzing and helping investors make informed about where and how to invest in Myanmar. Backed by more than 20 years of experience leading foreign direct investment decisions across Asia’s industrial zones, Tractus has advised investors in Myanmar on investment decisions in porcelain, garment, automotive part, pharmaceutical, animal feed, construction material manufacturing, mining and industrial mineral processing. Tractus has helped those companies and many more trading into and developing growth strategies in the country

Myanmar mining risk map

Among other industries, Myanmar’s rich – but largely unexplored – mineral wealth has put mining near the forefront of the discussion on new foreign investment opportunities. The country is home to potentially large reserves of copper, lead, zinc, tin, tungsten, gold, coal and barite as well as precious and semi-precious stones given its geology. Opacity in the regulatory environment, political and social issues and the practice of onerous Production Sharing Contract (PSC) requirements, however, have stifled growth in the mining sector; conditions where only investors from China, Thailand, Hong Kong and Vietnam have had the risk tolerance to invest until very recently .

Source: Tractus Research and Analysis, Myanmar Directorate of Geological Survey and Exploration, US Campaign for Burma

In some of the country’s most mineral rich areas, investors will note Myanmar mining risk from instances of armed conflict has prevented more large scale exploitation of minerals. While Myanmar has made strides towards a national cease fire agreement, announcing a draft national cease fire accord in the second quarter of 2015, data collected by the US Campaign for Burma, an American NGO, shows regular occurrences of armed conflict in Kachin and Kayin states along the Thai and Chinese borders.

For nearly two decades, Tractus has advised clients across Asia, and in Myanmar specifically, on their direct investment strategy. Engagements for mining interests in Myanmar have included regulatory analysis, supply chain analysis, investment feasibility studies and risk mitigation.