Vietnamese businesses find it hard to break into “Myanmar gold mine”

Vietnamese businesses find it hard to break into “Myanmar gold mine”

Vietnamese businesses find it hard to break into “Myanmar gold mine”

VietNamNet Bridge – The expensive offices for rent, the poor infrastructure and the cutthroat competition in Myanmar have all put big difficulties for the Vietnamese enterprises to squeeze into the Myanmar market.
VietNamNet Bridge – The expensive offices for rent, the poor infrastructure and the cutthroat competition in Myanmar have all put big difficulties for the Vietnamese enterprises to squeeze into the Myanmar market.
Vietnam, Myanmar, outward investment, Hoang Anh Gia Lai, capital
 

Global investors now all eye Myanmar as the gold mine. Despite the global economic difficulties which force the investors to think twice when making outward investment, they still have been flocking to the gold mine.

Tran Bac Ha, Chair of the Vietnamese investors in Myanmar, commented that Myanmar is the last golden land in Asia for foreign investors.

A lot of Vietnamese investors, mostly in the fields of real estate, telecommunication, information technology and agriculture, have left Vietnam for Myanmar since late 2012 to seek the investment opportunities there.

Le Hung, Chair of Hoang Anh Gia Lai Land, said that before the country opened its doors to the world, the number of internationally standardized hotels in the country was so modest that “they can be counted with the fingers.”

Hung said non-government organizations and big economic groups have also found it difficult to lease offices due to the low supply and low quality. Therefore, the demand for hotels, offices for leasing and apartments in Myanmar is very big. 

Viettel, a Vietnamese telecommunication giant, is now facing up with the big guys in the world, to obtain one of the two last tickets to the telecommunication market. To date, only 10 percent of the 60 million Myanmar people can access mobile services.

In the information technology, a senior executive of FPT, the biggest technology group in Vietnam, said Myanmar especially welcomes information technology, high technology and education investors, which could be seen as a great advantage for Vietnamese enterprises.

Retailers have also been eyeing the market with the high population which has the increasingly high income. Tan Hiep Phat, the owner of some drink brands, said it is seeking the opportunities to export products to the market.

However, Myanmar should not be seen as a piece of the delicious cake to be swallowed.

Hung of Hoang Anh Gia Lai has noted that Myanmar has developed on the basis of the British culture and it always keeps cautious with investors.

He went on to say that since the infrastructure in Myanmar is very poor, the investment rate would be relatively high. For example, investors would have to bring machines and equipment to Myanmar to serve the construction works and the project development there.

The short supply of offices has forced the Vietnamese investors to pay big money for offices. A senior executive of a business said the rent of a C-class office in the country is up to $65 per square meter, which is 50 percent higher than the rent of an A-class office in the central area of Hanoi.

Therefore, instead of spending a huge sum of money every month to rent an office, the enterprise is considering spending $15,000 a month, or VND300 million, to lease a villa with an area of 1,000 square meters, of which 400 square meters could be used for the office.

Meanwhile, an executive of Huu Lien A Chau, a steel exporter to Myanmar, has noted that the competition in the market has become much stiffer than 3 years ago. More and more manufacturers have brought steel to the country which they believe a fertile land.

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