MYANMAR: Chinese firm invests in cement factory

The local Myint Investment Group Co Ltd has joined Anhui Conch Cement Co Ltd from China to upgrade No.33 Kyaukse cement factory into a plant that can produce 5,000 tonnes of cement daily through a build-operate-transfer (BOT) system, according to the Ministry of Industry.

The joint venture, Myanmar Conch Cement Co Ltd, was permitted on November 11 by the Directorate of Investment and Company Administration.

The managing director Zaw Hein of No.3 Heavy Industry signed the BOT contract with his counterpart Nan Lin Lin Htun from Myanmar Conch Cement Co Ltd on November 13.

The factory can currently produce 400 tonnes of cement per day and it is hoped it can become more stable and efficient.

Other foreign cement producers have recently set up in Myanmar with Lafarge from France opening a US$10 million cement repackaging factory in the Thilawa Special Economic Zone with the local Aung Myin Thu and My Associates this month.

Lafarage holds 60 percent ownership and the other two have 20 percent each.

MYANMAR: French cement giant opens depot, expecting building boom

Lafarge, a French cement manufacturer, and two local companies – Aung Myin Thu and My Associates, have opened a repacking factory with a US$10-20 million investment in the Thilawa Special Economic Zone.

The distribution depot was built with 60 percent investment from Lafarge and 20 percent each from Aung Myin and My Associates.

Lafarge is planning to further invest US$400-500 million, in the belief demand for building materials is due to soar.

Hla Myo, managing director of Aung Myin Thu, said: “Although it is described as a cement factory, really the cement will be imported. Some will be sold after repackaging there. Around 20,000 tons of cement, produced with technology from France, can be stored there. We are expecting our economy to develop and the cement market will grow strongly. We hope to meet the demand for cement across the whole country but first by trading near the Thilawa SEZ close to the port.”

The factory should provide 130 jobs, many of which are hoped to go to locals.

Lafarge, which has 1,600 factories in 64 countries, a workforce of 68,000 and a yearly income of €15,861 million, previously planned to build a factory in Myanmar but the plans fell through.

MYANMAR: SCG invests US$ 400 million to build cement factory

Thailand’s Siam Cement Group is investing $ 400 million to construct the cement factory in Mawlamyine, Mon State.

The construction of the factory is expected to complete in the middle of 2016. 

“The priority we are focusing this moment is to manufacture cement and later cement related products such as ready mixed concrete and precast concrete blocks,” saidKanTrakulhoon, SCG president and CEO.

“Myanmar seems developing progressively and infrastructures are needed so cement market will be good. The investments made in industry and housing construction sectors are increasing especially in major cities – Yangon, Mandalay and Nay Pyi Taw,” he said.

He added that the cement factory will be using Waste to Energy system – electricity or/and heat from incineration of waste and conservation of greenhouse effect. A total of 1.8 million volume of cement are expected to manufacture annually.

SCG has been in Myanmar for more than 20 years and its affiliate, the first ready mixed concrete company Myanmar CPAC Service was established in 1996.

MYANMAR: SMGR looks to Myanmar, Bangladesh

After expanding its business to Vietnam, cement producer PT Semen Indonesia (SMGR) is planning to strengthen its regional grip by acquiring a cement company in Myanmar, the process of which is expected to be completed in July.

Semen Indonesia president director Dwi Soetjipto confirmed, saying the state run company was in the process of taking over a cement maker in Myanmar.

“It is a private company and the acquisition can be executed after the prospective partner finishes several legal documents,” Dwi said on the sidelines of the new Indarung VI cement factory groundbreaking ceremony in Padang, West Sumatra, on Monday.

Semen Indonesia has prepared a total fund of US$200 million to $300 million for the acquisition. The state company is targeting to finish the acquisition process in July, as reported by kontan.co.id.

Semen Indonesia, he said, is also eyeing a cement factory in Bangladesh that can produce around 600,000 to 1 million tons per year and is targeting to finish the factory’s acquisition process later this year or earlier next year. 

“I hope [the acquisition] can finish within the next six months,” he added.

Although Dwi is reluctant to disclose the total investment for the Bangladesh factory, he stated the acquisition of the Bangladesh factory was not as expensive as the takeover of Thang Long Cement Company (TLCC) in Vietnam.

On Nov. 14, 2012, Semen Indonesia acquired 70 percent of Thang Long’s shares from Geleximco with a total transaction value of $157 million.

In a bid to strengthen its position in Vietnam, Semen Indonesia has two options to pick, Dwi said. First, to acquire a new company with a total investment under Rp 1 trillion (US$86 million), far below Thang Long’s acquisition price. In this option, Semen Indonesia will target a small company with a production capacity of around 2.3 to 2.5 million tons.

“Semen Indonesia has met representatives from three companies,” he said, adding that Semen Indonesia would be the majority shareholder, if it picks this acquisition option.

Second, to establish a new factory under the supervision of TLCC. Semen Indonesia, however, will take the demographic factor of Vietnam into account, considering that the market in Vietnam is divided into North and South Vietnam. “The market in South Vietnam is better than in the North, but the supply is dominated by North Vietnam,” he said.

In addition, Semen Indonesia kicked off the construction of its new Indarung VI cement factory in Padang, West Sumatra, on Monday.

State-Owned Enterprises Minister Dahlan Iskan led the groundbreaking ceremony, witnessed by West Sumatra Governor Irwan Prayitno, Dwi Soetjipto of Semen Indonesia and Semen Padang president director Munadi Arifin.

Dwi said that the Rp 3.25 trillion project was targeted to finish in the second semester of 2016 and that the establishment of the factory was based on the increasing demand of cement in Sumatra and West Java areas

MYANMAR: State-owned enterprises aim to be Asian tigers

Having reaped billions of rupiah in profits from the 240 million residents of the archipelago, a number of state-owned firms are now turning their attention to neighboring countries.

From a cement maker to an airline, they aim to tap into neighboring markets ahead of the ASEAN Economic Community, which is set to kick off next year.

Cement producer PT Semen Indonesia is in an ongoing discussion with Myanmar conglomerates to acquire a cement factory in that country. 

The company, which has allocated US$200 million for the acquisition, however, probably cannot complete the process this month as previously expected.

“We’ve conducted due diligence and we are now reviewing data from the field,” Semen Indonesia corporate secretary Agung Wiharto told The Jakarta Post recently.

“We don’t need to hurry because we want to get the best deal.”

Agung said that Myanmar was a “big potential market” for his firm as Myanmar’s economy was starting to grow as the formerly reclusive nation would need more cement to construct new buildings.

Myanmar is currently reforming its economy to be more open to the world after the transition from a military junta to a civilian government in 2011.

Myanmar has recorded economic growth of more than 6 percent since 2012, according to the World Bank.

Agung said that Myanmar’s cement demand stood at between 8 and 9 million tons per year, while its cement makers could only meet half of that.

“They’ve imported cement from Thailand and China. We want to capture that market with our presence,” he said.

“We aim to go regional,” Agung said, adding that his firm had successfully operated in Vietnam through its joint venture with Thang Long Cement Joint Stock Company (TLCC).

Semen Indonesia is not alone in its regional mission.

State-run lender Bank Negara Indonesia’s (BNI) construction firm PT Wijaya Karya (WIKA) and oil and gas firm PT Pertamina have joined forces and established a representative office in Myanmar.

State-Owned Enterprises Minister Dahlan Iskan previously urged 15 state-owned firms to expand their business to Myanmar because its economy was booming.

He said that Myanmar’s government had so far granted business permits to several state-owned firms, including the three that jointly established a representative office.

BNI international division head Abdullah Firman Wibowo said that for BNI, the representative office was currently collecting market intelligence to get a comprehensive picture of the prospects and business culture in Myanmar.

“About two weeks ago, we met with the Central Bank of Myanmar [CBM] to discuss our plan to open a branch there,” he said. 

“They welcomed our initiative positively.”

Firman added, however, that BNI would not open a branch in Myanmar anytime soon because CBM was still reviewing some regulations.

CBM was just granted operational independence in July last year after being controlled by Myanmar’s government, according to a report by the US Central Intelligence Agency (CIA).

“We will probably open our own representative office after everything is fixed in Myanmar,” Firman said.

BNI currently has several overseas branches — including those in Singapore, Tokyo and Hong Kong — that generally provide services on trade finance and remittance transfer.

Firman said that BNI recorded total remittance transfers amounting $19.83 billion in the first quarter this year, a slight increase from $19.79 billion in the same period last year.

The bank served international trade transactions with a total value of $7.3 billion in the first quarter this year, a 28.4 percent surge from the same period last year, he said.

Firman said that BNI would probably also jump into South Korea and Taiwan to capture a bigger portion of the market due to the many Indonesian migrants living in the two countries.

Joining the fray in expanding overseas business, WIKA also aims to enter Myanmar.

The company allocated Rp 300 billion ($26.26 million) for its subsidiary, WIKA Beton, to build a concrete factory in Myanmar.

The company has also received an offer to develop a real estate complex in Myanmar through WIKA Realty.

“We’re still discussing our expansion plan in Myanmar,” WIKA corporate secretary Natal Agrawan said recently.

Besides expanding its wing to Myanmar, WIKA is also aiming to widen its overseas portfolio in, among other countries, Brunei Darussalam and Saudi Arabia.

Meanwhile, national flag carrier Garuda Indonesia, which already has 36 international destinations spanning across the globe, will open two new flight routes this year.

Garuda marketing and sales director Erik Meijer told the Post that Garuda would open the Jakarta-Manila (the Philippines) and Jakarta-New Delhi (India) routes by the end of this year.

The carrier already serves the Jakarta-Manila route, but through a code share agreement with Philippine Airlines.

Garuda spokesperson Pujobroto said that Garuda targeted to increase the number of its passengers by 10 to 20 percent this year, from almost 25 million last year.

Trading consultant firm PT Astronacci International president director Gema Goeyardi said overseas expansion to newly developing countries, such as Myanmar, would provide state-owned companies with very good markets because the countries could still potentially grow for the next 20 years.

“In addition, overseas expansion will also help state-owned firms prepare to face regional and global free trade zones,” he said.

Gema said that by operating in a regional scale, the companies would be stimulated to advance their benchmarking strategies, institutional managements and human resources.

MYANMAR: Semen Indonesia aiming to expand to Myanmar in June

Publicly listed cement producer PT Semen Indonesia is moving closer to its plan to expand its business to Myanmar.

Semen Indonesia's president director, Dwi Soetjipto, said the company would be finalizing the acquisition of a local cement firm in June this year, Kontan.co.id reported on Tuesday.

"The value is the same as we previously announced, namely between US$200 million and $300 million," Dwi said after an annual general shareholders meeting in Jakarta.

The firm's finance director, Ahyanizzaman, said the firm was conducting due diligence regarding two cement producers in Myanmar.

He admitted that neither producer's production capacity was large; each averaged around 2 million tons of cement per year.

"If they are interesting, though, there's a good chance that we will acquire both of the companies," he said.

In the first stage, Semen Indonesia is likely to become a minor shareholder, as the firm will first want to witness the industrial market and political situation in the country.

The company will be seeking bank loans and issuing bonds if, in the end, they decide to acquire both producers.

"We have not yet decided which way we are going to take. Right now, we are concentrating on finishing the due diligence process," he said.

INDIA: South cement makers now start exports to Myanmar

Depressed market conditions for the second year running have forced cement makers in south India to look at different export markets. After testing the Sri Lankan market, manufacturers have now started exporting to Myanmar. 

It is learnt that Chettinad Cements, The India Cements, Dalmia Cements and Ramco Cements have started shipping cement to Myanmar in the past few months. 

"We started shipments to Myanmar last month of about 10,000 to 12,000 tonnes. It is not very remunerative, but when the chips are down, we have do something to stay afloat," said Vipin Agarwal, CEO-south, Dalmia Cements. He said that manufacturers make token profits from this market, but have started seeding it with the hope that it will turn profitable in future. Dalmia moves its cement from Dalmiapuram near Trichy in central Tamil Nadu to Tuticorin port in southern Tamil Nadu, from where it heads to Myanmar.