U Win Aung, Chairman, Myanmar Thilawa SEZ Holdings: Interview

Interview: U Win Aung

What benefits have been generated so far by the Thilawa SEZ, and what are the main priorities for its development in the future?

U WIN AUNG: The Thilawa SEZ is at a turning point. In recent years, Thilawa has faced a shortage of certain utilities, particularly electricity. However, thanks to Japan’s Official Development Assistance, power supply was secured in the industrial zone at the beginning of 2018, and we can now accommodate heavier industries and larger manufacturers. Indeed, we have already welcomed several companies, and we keep receiving new applications from large manufacturers who require significant portions of land for construction.

Furthermore, we are now planning to develop areas of the Thilawa SEZ that are closer to ports in order to attract more logistics-dependent industries. In fact, we are working on a multi-modal transportation system that will include rail links and inland water transport in addition to the port and roads.

How can Thilawa SEZ support further investment in the garment manufacturing industry and ensure infrastructure is adequate?

WIN AUNG: There are several garment factories within Thilawa SEZ. The industrial zone is an appealing investment opportunity for this type of manufacturer, not only because of the legal framework, but also because of the SEZ’s outstanding location.

On the legal side, the government has already implemented an initiative to liberalise the garment sector and boost a free flow of goods. With regards to location, the SEZ’s proximity to modern ports and high-quality infrastructure make it the best option for any garment manufacturer. As for other labour-intensive industries, such as electronics, agriculture and food processing, Thilawa SEZ also offers free trade regulations and attractive tax incentives. To account for future growth and increased labour demand, we have already taken steps to ensure scalability by building dormitories, as well as reserving land in plots assigned for future development for more of these dormitories.

What potential will the Kyaukphyu and Dawei SEZs offer to investors going forward?

WIN AUNG: We are eager to apply what we learned from the experience of developing Thilawa SEZ to other SEZ investment opportunities. Kyaukphyu SEZ’s geographical location is outstanding, as it is a doorway to the West for China. Given this advantage, those that make the first move will be the logistics players, followed by manufacturers.

My expectations for Kyaukphyu SEZ go beyond servicing Myanmar and China. It has the potential to serve Bangladesh and landlocked parts of India. Dawei SEZ also has big potential, as it is at the centre of the western gateway of the East-West Economic Corridor and the Belt and Road Initiative.

Given the company’s experience in the Yangon Stock Exchange (YSX), where should regulators focus their capital market development efforts?

WIN AUNG: Financial literacy will be key to the successful development of Myanmar’s capital market. Regulators could help by providing education on investing in stocks and shares. Such initiatives are common in developing countries and have proven successful. Understanding stock markets and increasing financial literacy in the business community should be introduced as an aim of basic formal education in Myanmar. The YSX is struggling with liquidity, so the more that people are aware of and interested in capital markets, the better. Another key action would be to encourage corporate initial public offerings, which, in turn, would lead to better corporate governance. At the moment, most Myanmar companies are managed as family-owned businesses. Once people understand and appreciate the value of sound, corporate governance, there will be more extensive opportunity for companies to go public.