Myanmar: New business frontier for Thai companies

Thai companies doing business in Burma, building factories, producing goods & selling products to Burma's 60 million people.

Photo above of downtown Yangon at night, the largest city in Myanmar (also known as Burma) (Source: Wikipedia).

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Economics
MYANMAR

Thai firms salivate as reform winds its way towards passage

14/08/2012
Nareerat Wiriyapong

Myanmar has massive potential to become a major production base for Thai companies when the Asean Economic Community (AEC) is established in 2015, starting with light industries.

Santi Vilassakdanont, chairman of the Thai-Myanmar Business Council, said many Thai firms have been awaiting Myanmar's new foreign investment law to be endorsed by the parliament in the near future to pave the way for their entry into their impoverished neighbour.

The Saha Group, Thailand's largest consumer products conglomerate, plans to set up companies in Myanmar this year to support the group's investment in manufacturing facilities in years to come, said Mr Santi, also president of Saha Pathana Inter-Holding Plc.The council is under the Joint Private Standing Committee comprising the Federation of Thai Industries, the Thai Chamber of Commerce and the Thai Bankers' Association.

Myanmar's overwhelmingly cheaper daily wages almost guarantee the country will become another production base for Thai manufacturers in three years.

Daily wages in the Yangon area equal about 80 baht compared with the recently mandated 300 baht in seven provinces of Thailand.

Myanmar's population of 60 million also represents a larger market for Thai products than Cambodia's 14 million.

The Saha Group, for instance, wants to set up garment, consumer products and cosmetics factories in Myanmar, said Mr Santi.

He said the group also plans to develop an industrial estate in Myanmar with a projected price tag of 2 billion baht, but this project will take time.

Twice a year the council hosts a mission of Thai companies, mainly small and medium-sized enterprises, to visit Myanmar. Typically, 20-30 companies join each trip.

"They are mainly trading firms, garment makers and food producers wanting to ship products to Myanmar first before deciding to build a factory there," said Mr Santi.

He said local partners who have connections and know the language are recommended for Thai companies looking to set up businesses in Myanmar.

Myanmar's new investment rules should make clear foreign ownership laws, while the government commits to buying a certain amount of electricity from power projects.

The expectation is more investments will flow into the country and help to solve chronic power shortages.

Concerns about foreign exchange rates in Myanmar have eased, but investors still look forward to foreign banks setting up branches there, said Mr Santi.
He called on Thailand's government to push for Thai banks to operate in Myanmar and encourage them to offer credit facilities to fund Thai investments there.

(Source: Bangkok Post, Economics, MYANMAR, Thai firms salivate as reform winds its way towards passage, 14/08/2012, Nareerat Wiriyapong, link) 


Foreign Investment in Myanmar Vocabulary

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
foreign investment law

Foreign Direct Investment (FDI) - investment by a company in a business in a foreign country: "investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds" (See Wikipedia)

economy of Burma (Myanmar) - (See Wikipedia)
Yangon - the largest city in Myanmar and the most important commercial center (See Wikipedia)

frontier -1. the most advanced and recent ideas, products, etc; 2. the line or boundary between two countries or areas ชายแดน
new business frontier for Thai companies

salivate - 1. see something that you really want to have; 2. when the mouth gets wet with "saliva" after a person smells or sees food; also called "drool" หลั่งน้ำลาย

reform - improvements in the way government or an organization operates; change that is intended to correct a situation that is wrong or unfair การแก้ไข การปฏิรูป

winds its way towards - not going fast, taking a slow path to

reform winds its way towards passage

passage of a bill into law - when parliament votes to make a proposed law into a real law
passage - Same as "passage of a bill into law "

Thai firms salivate as reform winds its way towards passage

potential - the possibility of success ที่มีศักยภาพ ที่เป็นไปได้
massive - very large in size, amount or numberใหญ่โต มหาศาล
massive potential - great possibility of success

production base - a place with many factories (where products are produced)
base - a place from where an activity can be planned and done ฐานที่มั่น

established - created
established in 2015

heavy industries - large factories producing things like steel or cars
light industries - small factories producing less complicated goods

Myanmar has massive potential to become a major production base for Thai companies when the Asean Economic Community (AEC) is established in 2015, starting with light industries.

endorsed - officially approved รับรอง
endorsed by parliament - approved by parliament

pave the way for - make the situation and conditions good to help something happen

impoverished - very poor ยากจน
neighbor - living next to
impoverished neighbor - a poor country next to this country 

Santi Vilassakdanont, chairman of the Thai-Myanmar Business Council, said many Thai firms have been awaiting Myanmar's new foreign investment law to be endorsed by the parliament in the near future to pave the way for their entry into their impoverished neighbour.

consumer - someone who buys and uses goods and services ผู้บริโภค
consumer products - products that consumers buy for their everyday use at home (that you might find in a store like 7-11 and Big-C such as toothpaste soap, food products)

conglomerate - a large company joining together a group of companies with different business activities
consumer products conglomerate - a large company producing consumer products

support - help, by giving money, for example สนับสนุน

facilities - the buildings, equipment and services provided for a particular purpose สิ่งอำนวยความสะดวก สถานที่และสิ่งอำนวยความสะดวก
manufacturing facilities - factories

support the group's investment in manufacturing facilities

years to come - years in the future

plans to set up companies in Myanmar this year to support the group's investment in manufacturing facilities in years to come

comprising - consisting of ประกอบด้วย
X comprising Y, Z ... - X made of parts Y, Z ...

The Saha Group, Thailand's largest consumer products conglomerate, plans to set up companies in Myanmar this year to support the group's investment in manufacturing facilities in years to come, said Mr Santi, also president of Saha Pathana Inter-Holding Plc.The council is under the Joint Private Standing Committee comprising the Federation of Thai Industries, the Thai Chamber of Commerce and the Thai Bankers' Association.

overwhelm - be very much or very big (to a surprising degree)
overwhelmingly cheaper - very much cheaper

wages - the amount of money earned per hour by a worker
daily wages - money received by a worker for one day's worth of work

guarantee - 1.  make something happen for sure; 2. promising that something will happen for sure คำรับรอง, การประกัน (See glossary)
X would almost guarantee Y - if X happens then Y will very likely happen (close to 100% sure)

cheaper daily wages almost guarantee the country will become another production base for Thai manufacturers

mandated - officially required
the recently mandated 300 baht

Myanmar's overwhelmingly cheaper daily wages almost guarantee the country will become another production base for Thai manufacturers in three years. Daily wages in the Yangon area equal about 80 baht compared with the recently mandated 300 baht in seven provinces of Thailand.

population - the group of people who lives in one country, area or place กลุ่มที่อาศัยอยู่ในบริเวณหนึ่ง
garment - clothes

cosmetics - things such as powders, creams, lipstick, and eye liner that women use to make themselves look more beautiful (See Wikipedia) เครื่องสำอางค์

Myanmar's population of 60 million also represents a larger market for Thai products than Cambodia's 14 million. The Saha Group, for instance, wants to set up garment, consumer products and cosmetics factories in Myanmar, said Mr Santi.

industrial estate - a special area for factories with special infrastructure (transportation, water, electricity, waste disposal

projected - expected, forecast; the amount that experts believe it will in the future
projected price tag of 2 billion baht

host - provide a place for something to happen  (along with the things needed for it to happen)
mission - 1. travelling to another country to accomplish an important task; 2. an important job, that someone is sent somewhere to do งาน
host a mission of Thai companies

enterprises - companies
small and medium-sized enterprises - SMEs

trading firms - companies that buy and sell things as their business

He said the group also plans to develop an industrial estate in Myanmar with a projected price tag of 2 billion baht, but this project will take time.  Twice a year the council hosts a mission of Thai companies, mainly small and medium-sized enterprises, to visit Myanmar. Typically, 20-30 companies join each trip. "They are mainly trading firms, garment makers and food producers wanting to ship products to Myanmar first before deciding to build a factory there," said Mr Santi.

local - in or related to the area that you live, or to the particular area that you are talking about ท้องถิ่น
partners - the companies owning part of the joint venture หุ้นส่วน
local partners - the partners in a joint venture that are not foreign companies

have connections - know people in a situation who can help you get things done in the situation
recommended - people say that this is something you should do

looking to - planning to do something; thinking about doing something in the future
looking to set up businesses in Myanmar

He said local partners who have connections and know the language are recommended for Thai companies looking to set up businesses in Myanmar.

clear - easy to understand
make clear foreign ownership laws

commits to - make a promise to do something in the future

power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
power projects - a project to create power plants (factories that generate electricity)

the government commits to buying a certain amount of electricity from power projects

shortages - when there are not enough goods for people to buy การขาดแคลน
power shortages - electricity shortages; when there is not enough electricity

chronic - lasting a long time เป็นประจำ
chronic power shortages - long-term electricity shortages (when there is not enough electricity for a long time)

Myanmar's new investment rules should make clear foreign ownership laws, while the government commits to buying a certain amount of electricity from power projects.  The expectation is more investments will flow into the country and help to solve chronic power shortages.

concerns - worries
concerns eased - when situation improves and gets better (so people worry less)

foreign exchange rates - the amount of money you get in a foreign currency for your own currency (example: exchange rate of 32 baht per dollar)

branch - a local office or store of a large company
bank branch - a local bank office in a town, city or foreign country
bank branch in a foreign country

look forward to - expect something to happen in the future (and feel happy about it)
look forward to foreign banks setting up branches there

push for - try to get something to happen; work hard to make people do something
push for Thai banks to operate in Myanmar

credit - loans, borrowing of money  เครดิต เงินกู้ทั้งหมด
credit facilities - an arrangement that a company has with a bank to borrow money up to an agreed limit (credit line) for a period of time

fund (noun) - to provide money for something เงินทุน กองทุน
fund (verb) - to provide money for something ให้เงินทุน
fund Thai investments

encourage - give energy to continue doing activity, motivate, give confidence ปลุกใจ
encourage them to offer credit facilities to fund Thai investments  

Concerns about foreign exchange rates in Myanmar have eased, but investors still look forward to foreign banks setting up branches there, said Mr Santi. He called on Thailand's government to push for Thai banks to operate in Myanmar and encourage them to offer credit facilities to fund Thai investments there.