Mandalay Investment Opportunities Survey 2015

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Mandalay Investment Opportunities Survey 2015

Key Points


Mandalay is Myanmar's second largest city with a population of over 1.2 million. It is
the major trading and communication center in northern and central Myanmar.
Mandalay is strategically situated on important Ayeyarwaddy River and connects to
India and China, Thailand and other parts of Southeast Asia via land routes.

With its central location, availability of raw materials and labour, Mandalay provides
various types of business opportunities to different investors.



Mandalay Investment Opportunities Survey collated 42 business respondents acrossvarious firm-size categories, age, ownership profiles and industries from Mandalay
Region. 20 official Interviews were also conducted to public offices and associations
in order to understand detailed information about overview of Mandalay.



According to the Survey, Mandalay faces both institutional and infrastructure
limitations, such as government procedures, availability of land and electricity supply.
Both the regional government and private firms have been trying to improve thebasic infrastructure with their own initiatives and partnerships.



The future prospect for Mandalay is good; 46% of the respondents rated their futureof industry as good prospect due to increasing market demand, FDI partner andbetter infrastructure and services. Most potential sectors include hotel and tourism,
manufacturing and trading.

To make Mandalay more competitive and attractive investment destination, anumber of actions to be taken, such as, handling the land prices, upgrading
infrastructures, providing skilled workforce and supporting by the government andrelevant departments.

Study planned by MIC and JICA and prepared by MMRDaMandalay Investment Opportunities Survey 2015

Background of the Mandalay Investment Opportunity Survey
Foreign Direct Investment (FDI) is considered as an engine of growth and highly prioritized in
Myanmar. The Myanmar Investment Commission (MIC) is responsible for promotion of FDI
and Myanmar citizen’s direct investment.
In order to achieve balanced economic development as the national agenda, regional
investment promotion is considered to be important but its strategy and implementation
have not been fully materialized.
Mandalay is the second largest city in Myanmar and an integral part of the central tonorthern part of Myanmar. Mandalay and its 20 mile-circle surrounding area (Mandalay
Area) have a vast potential for development and investment including agriculture,
agro/food processing, manufacturing and other type of business. However, the potential
has not been fairly realized yet and there are growing demands for identifying andpromoting promising investment opportunities in Mandalay Area.
In order to address these issues, “Mandalay Investment Opportunity Survey and Investment
Fair” was planned by MIC and the Japan International Cooperation Agency (JICA), whichcurrently dispatches a JICA Expert as an advisor on investment promotion in Directorate ofInvestment and Company Administration (DICA) of Ministry of National Planning andEconomic Development.
For this purpose, Myanmar Marketing Research and Development Co., Ltd. (MMRD) was
contracted with JICA and conducted the Survey and Fair in order to identify untapped
opportunities for investment in Mandalay area with evidence, to promote the identified
investment opportunities in and around Mandalay for potential investors, and to enhancelinkages between Mandalay local business and foreign/domestic investors.

Study planned by MIC and JICA and prepared by MMRDb

Mandalay Investment Opportunities Survey 2015

Table of Contents
Key Points ............................................................................................................................... a
Background of the Mandalay Investment Opportunity Survey .................................................b
Abbreviations ......................................................................................................................... vi
1.

Macroeconomic Overview of Mandalay (Officials' perspectives) ....................................... 1
1.1

Basic facts of Mandalay Region .......................................................................................... 1

1.2

Why Mandalay?.................................................................................................................. 3

1.3

Economy ............................................................................................................................. 4

1.3.1 Two Polar Growth Model ................................................................................................. 7
1.4 Infrastructure .......................................................................................................................... 8
1.4.1 Roads ................................................................................................................................ 8
1.4.2 Ports ................................................................................................................................ 10
1.4.3 Railways .......................................................................................................................... 12
1.4.4 Airports ........................................................................................................................... 14
1.4.5 Energy and Power ........................................................................................................... 16
1.4.6 Telecommunication ........................................................................................................ 17
1.5 Public and Private Investment .............................................................................................. 18
1.5.1 Public Investment ........................................................................................................... 18
1.5.2 Private investment.......................................................................................................... 20
1.6 Industrial parks ...................................................................................................................... 21
1.7 Labour.................................................................................................................................... 25
1.8 Mandalay District Development ........................................................................................... 26
1.8.1 Infrastructure and commercial projects in Mandalay .................................................... 26
1.8.2 Industrial parks ............................................................................................................... 29
2.

Understanding businesses in Mandalay (Business owners' perspectives) ......................... 32
2.1

Setting up the business .................................................................................................... 36

2.2

Operating the business .................................................................................................... 38

2.2.1 Macroeconomic overview and regulatory framework .................................................. 39
2.2.2 The need for infrastructure ............................................................................................ 40
2.2.3 Quality of labour ............................................................................................................. 41
2.2.4 Business cost in Mandalay .............................................................................................. 42
2.2.5 Logistics........................................................................................................................... 43
2.3 Future business Development .............................................................................................. 45
3

Obstacles and limitations of doing business in Mandalay ................................................ 47
3.1 Land ....................................................................................................................................... 47

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3.2 Electricity ............................................................................................................................... 48
3.3 Technology ............................................................................................................................ 48
3.4 Transport and Logistics ......................................................................................................... 48
3.5 Labour (Training and skill development and capacity building) ........................................... 48
3.6 ICT .......................................................................................................................................... 49
3.7 Others .................................................................................................................................... 49
4

Potential investment opportunities in Mandalay ............................................................ 50

5 Recommendation and action plan to improve business environment and investment
promotion ............................................................................................................................. 58
5.1 Action plans for the DICA Mandalay ..................................................................................... 60
6. Feedbacks from Stakeholder's Meeting about the Mandalay Investment Fair ..................... 62
7. Feedbacks from Mandalay Investment Fair ........................................................................ 67
Annex.................................................................................................................................... 79

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Mandalay Investment Opportunities Survey 2015

Table of Figures
Figure 1: Mandalay Region with its districts ..................................................................................... 2
Figure 2: GDP of Mandalay Region ................................................................................................... 5
Figure 3: GDP contribution of the Mandalay Region by sector ........................................................ 6
Figure 4: GDP per capita of states and regions in Myanmar ............................................................ 6
Figure 5: Two Polar Growth Model................................................................................................... 7
Figure 6: Road linkage of Mandalay Region ..................................................................................... 9
Figure 7: Semeikhon (Si Mee Khon) Port Plan ............................................................................... 11
Figure 8: Rail and waterway linkage of Mandalay Region .............................................................. 13
Figure 9: Passengers arrivals of Mandalay International Airport ................................................... 14
Figure 10: Commercial airports in Mandalay Region ..................................................................... 15
Figure 11: Gross production value of electricity in Mandalay Region ............................................ 17
Figure 12: Mobile penetration of the Mandalay Region* .............................................................. 18
Figure 13: Yatanarpon Cyber City Project Area Location ............................................................... 19
Figure 14: Industrial zones in Mandalay Region ............................................................................. 22
Figure 15: The location of Myo Tha Industrial Zone ....................................................................... 23
Figure 16: Myotha Industrial Park .................................................................................................. 24
Figure 17: Population pyramid of Mandalay Region ...................................................................... 25
Figure 18: Planned GDP by Mandalay District (Current price) ....................................................... 26
Figure 19: Mandalay Wholesale Market Master Plan .................................................................... 29
Figure 20: Registered industries in Mandalay District .................................................................... 30
Figure 21: Registered industries in Mandalay Industrial Zone ....................................................... 30
Figure 22: Businesses by sector ...................................................................................................... 34
Figure 23: Size of the businesses .................................................................................................... 35
Figure 24: Business activities .......................................................................................................... 35
Figure 25: The reason for starting up business in Mandalay .......................................................... 36
Figure 26: Major obstacles in starting up a business...................................................................... 36
Figure 27: Business setup ............................................................................................................... 37
Figure 28: Business operation......................................................................................................... 38
Figure 29: Macroeconomic and governance .................................................................................. 39
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Mandalay Investment Opportunities Survey 2015

Figure 30: Regulatory framework ................................................................................................... 40
Figure 31: Rating infrastructure in Mandalay Region ..................................................................... 40
Figure 32: Rating the quality of labour in Mandalay Region .......................................................... 41
Figure 33: Rating logistics in Mandalay Region .............................................................................. 43
Figure 34: Rating of reliability of each mode of transportation ..................................................... 43
Figure 35: Attractiveness of the incentives by the government .................................................... 44
Figure 36: Effective incentives proposed to the government by the respondents ........................ 44
Figure 37: Predicting the future of own industry in next 3 year .................................................... 46
Figure 38: Predicting the future of own industry in next 3 year (by industry) ............................... 47
Figure 39: Predicting the potential sector of Mandalay ................................................................. 50
Figure 40: Potential sectors of Mandalay Region ........................................................................... 51
Figure 41: Tourist arrivals in Mandalay .......................................................................................... 52
Figure 42: Hotel rooms in Mandalay over 6 years .......................................................................... 53
Figure 43: Total sown areas in Mandalay Region by type of crops ................................................ 56
Figure 44: Stakeholders' meeting for upcoming Mandalay Investment Fair ................................. 62
Figure 45: Keynote speech by H.E. U Ye Myint, Chief Minister, Mandalay Region Government .. 70
Figure 46: Mandalay Investment Fair Seminar ............................................................................... 72
Figure 47: Mandalay Investment Fair Panel Discussion ................................................................. 74
Figure 48: Business Matching ......................................................................................................... 75
Figure 49: H.E. U Zay Yar Aung, Chairman of Myanmar Investment Commission (MIC) andand H.E. U Ye Myint, Chief Minister, Mandalay Region Government visited booths at the
Exhibition ........................................................................................................................................ 77
Figure 50: Booth at the Exhibition .................................................................................................. 77
Figure 51: Mingalar Mandalay Project............................................................................................ 78
Figure 52: Myotha Industrial Park Project ...................................................................................... 78

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Mandalay Investment Opportunities Survey 2015

List of Table
Table 1: Basic facts of the Mandalay Region .................................................................................... 1
Table 2: Contribution of Mandalay Region ....................................................................................... 5
Table 3: facts of Mandalay Region roads .......................................................................................... 8
Table 4: List of commercial airlines operating in Mandalay Region ............................................... 15
Table 5: Electricity generation and distribution in Mandalay Region ............................................ 16
Table 6: Myanmar citizen investments to respective states and regions in FY 2014-15 ............... 20
Table 7: Foreign direct investment to respective states and regions in FY 2014-15 ..................... 21
Table 8: Manpower for conducting the Mandalay Investment Opportunity Survey ..................... 32
Table 9: Detailed list of KII interviews ............................................................................................ 33
Table 10: Detailed list of B2B interviews ........................................................................................ 34
Table 11: Average salary of the workers in Mandalay ................................................................... 42
Table 12: Current hotels in Mandalay ............................................................................................ 52
Table 13: Type of industries in Mandalay industrial zone .............................................................. 54
Table 14: land utilization of Mandalay Region in 2015 .................................................................. 56
Table 15: Participants of Stakeholder's Meeting ............................................................................ 62
Table 16: Participants of Mandalay Investment Fair ...................................................................... 67
Table 17: Participants of Mandalay Investment Seminar ............................................................... 67

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Mandalay Investment Opportunities Survey 2015

Abbreviations
ASEAN

Association of Southeast Asian Nations

AIRBMP

Ayeyarwaddy Integrated River Basin Management Project

B2B

Business-to-business

B.O.T

Build-Operate-Transfer

DICA

Directorate of Investment and Company Administration

ERIA

Economic Research Institute for ASEAN and East Asia

FDI

Foreign Direct Investment

FTAFree Trade Agreement

FY

Fiscal YearGDP

Gross Domestic Product

GIZ

Gesellschaft für Internationale Zusammenarbeit GmbH (German
International Cooperation)

JICA

Japan International Cooperation Agency

KII

Key informant interview

MCDC

Mandalay City Development Committee

MCDV

Myanmar Comprehensive Development Vision

MIC

Myanmar Investment Commission

MCC

Mandalay Convention Centre

MMRD

Myanmar Marketing Research and Development Co. Ltd

MMID

Mandalay Myotha Industrial Development Public Co. Ltd.

MNPEDMinistry of National Planning and Economic Development

MIDV

Myanmar Industrial Development Vision

MoLES

Ministry of Labour, Employment and Social Security

MOT

Ministry of Transport

MRCCI

Mandalay Region Chamber of Commerce and Industry

NCDP

National Comprehensive Development PlanNSSA

National Skills Standard Authority

SEZ

Special Economic Zone

SMEs

Small and Medium Enterprises

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Mandalay Investment Opportunities Survey 2015

1. Macroeconomic Overview of Mandalay (Officials' perspectives)
1.1 Basic facts of Mandalay Region
Table 1: Basic facts of the Mandalay Region
Size
Population
Number of households
Percentage of urban households
Number of districts
Number of townships
CapitalGross Domestic Product
Major industries

11,925.95 sq. miles
6.165 million (12% of union population)
Population density – 206/km2
1,323,191
31.4%
7
31
Mandalay
11.4% of overall GDP (FY2014-15)
Agriculture
Trading and logistics
Minerals and mining
Wood and forestry

Located in central Myanmar, Mandalay Region is bordered by Sagaing Region to the north,
Sagaing and Magway Regions to the west, the Union Territory of Nay Pyi Taw to the south,and Shan State to the east. With the area of over 11,925 sq. miles, Mandalay Region is the
11th largest constituent unit of Myanmar. The Region occupies the eastern parts of thecentral lowlands, and has only few areas of higher elevation towards its eastern boundarywith Shan State. Most of the Region belongs to the 'Dry Zone' due to its relatively low
rainfall patterns compared to other regions.
Mandalay City and its surrounding districts have always played an important role in thepolitical, economic and cultural history of Myanmar. It is also considered as one of the mostdeveloped among the states and regions of Myanmar socially and economically.
Mandalay is the capital of Mandalay Region. It is the second-largest city and the last royal
capital of Myanmar. Located 445 miles (716 km) north of Yangon on the east bank of the
Ayeyarwaddy River, the city has a population of 1.2 million. It is the economic hub of Upper
Myanmar and considered the centre of Myanmar culture. Despite Nay Pyi Taw being thecountry's capital, Mandalay still remains Upper Myanmar's main commercial, educationaland health centre. Mandalay is the major trading and communications centre for northernand central Myanmar. Most of Myanmar border trade to China and India goes throughMandalay.

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Mandalay Investment Opportunities Survey 2015

Figure 1: Mandalay Region with its districts

Source: MMRD

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Mandalay Investment Opportunities Survey 2015

1.2 Why Mandalay?
There are various reasons why Mandalay can provide huge opportunities to the potential
investors. The potential of Mandalay is explained briefly below.








11.4% of Myanmar’s GDP (2014-2015);;
12.4% GDP growth (2014-2015);
11.98% of Myanmar’s population (6.16 million) ;93.8% literacy rate;
Accessibility (Asian Highway Hub (AH1,2,14), Trans Asian Railway Hub, Inland
Waterway, International Airport);
Culturally rich;High potential for growth

Although the GDP contributed by the Mandalay Region is one of the highest in Myanmar,
there is not much development despite lots of potential in the region. For example, 707
foreign direct investments (FDIs) have been in business operation in Myanmar since 1988
until August 2015 (MIC existing enterprise basis) and the Yangon Region has the highest FDIs
with 483 while Bago Region and Rakhine State have 42 and 28 respectively. However,
Mandalay Region only has received 19 FDIs over 25 years. Thus, there is a need to support
all the investment opportunities to reach its potential in Mandalay. Mandalay is also trade
hub and provides a lot of potentials. However, if there is no implementation to follow up the
potential, it would just remain as potential without reaching actual development.
Furthermore, foreigners know Mandalay as the tourist city but not as a commercial or tradecity.
Mandalay Region is important as one of the two growth polars stated by Two Polar Growth
Strategy in Myanmar, which is defined in National Comprehensive Development Plan (20102030). This model identifies Yangon and Mandalay as the two growth poles, or two growthcenters of Myanmar.
Current performance of small and medium enterprises (SMEs) has shown the slow growth.
If the local SMEs could connect with the foreign investors and develop as the supporting
industries, it would bring the win-win strategy for both parties. For example, there havebeen many sugar refineries which started operation since 1996. However, due to locallymade machineries, lack of raw materials and technology, these refineries lost out on thequality and production by modern machineries. Without investment, the number of local
refineries shrank from 70 in 1996 to 15 in 2015. Previously, Mandalay accounts for over 50%
of sugar processing and production in Myanmar. However, the production has dropped a lot
in recent years so there is a need for investment. Thus, foreign investment is crucial to
improve both quality and quantity of the products as well as help local firms in terms oftechnological transfer.
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Mandalay Investment Opportunities Survey 2015

1.3 Economy
Mandalay Region is strategically located in the heart of central Myanmar. It is among thecountry’s main centres of commerce and investment, contributing in generating
employment and economic development. The region has a mixed economy with agricultural
production being the primary livelihood source for the majority of its population, combinedwith industrial production, trade and tourism.
The region is endowed with providing agricultural and forest products. Thus, it is a naturally
and traditionally a centre grown into an important storage, processing and distribution hub
for agricultural and forest products. Primary crops grown within Mandalay Region are rice,wheat, maize, peanut, sesame, cotton, legumes, tobacco, chili, and vegetables. Livestockand fresh water fisheries are also important to the region's economy. Various types offorestry products such as teak and other hardwoods are extracted from forests.
The region also is home to various industries, such as alcoholic breweries, textile factories,
sugar mills and factories of household and consumer goods. Minerals and precious materials
are also produced in some areas. Mogok is famous for its ruby mines, which are among themost significant deposits in the world.
Tourism also forms a substantial part of Mandalay Region's economy. With tremendous
growth of international tourist arrivals to Myanmar in recent years, some of the mostpopular tourist destinations led in its territory. Temples and ruins of Bagan and Amarapura
are most famous destinations as well Mandalay city itself attracts many visitors with its
religious and historical sites. Hilly regions of Pyin Oo Lwin and Mount Popa provide potential
eco-tourism.
Due to its strategic location in the middle of the country, Mandalay city has a strong border
trade with China and India, transporting primary goods such as rice, beans and vegetables toresellers in Yangon or exporting to China or India.
With thriving agriculture exports, trade and transportation hub as well as tourist destination,
Mandalay Region is one of the regions which contribute significantly to Myanmar's economy.
The region contributes around 11.4% of Myanmar's GDP, behind Yangon Region (22%) andSagaing Region (11.6%) during FY2014-15. According to the regional government, it isplanned to achieve an average of 8.4% growth during the period of 5-year term (FY2011-12
to FY2015-16) with regional GDP per capita of MMK 1.2 million (USD 1,000 equivalent)1 for
FY2015-16.

1

An average of 1 USD = MMK 1,200 in 2015

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Mandalay Investment Opportunities Survey 2015

Table 2: Contribution of Mandalay Region
Fiscal Year
FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15
Contribution
to
11.29%
11.25%
11.08%
11.42%
Myanmar's GDP
Source: Ministry of National Planning and Economic Development

FY 2015-16
11.50%

Figure 2: GDP of Mandalay Region

Source: Ministry of National Planning and Economic Development
Following the GDP of Myanmar, Mandalay Region's GDP is accounted based on three main
broad based sectors: agriculture, industry and service. Agriculture comprises proper
agriculture farming, livestock, and fishery and forestry sectors. Industry includes energy,
mining, processing & manufacturing, electric power and construction. Services covertransportation, communication, financial institutions, social & administrative services,
rentals and other services including trade.
The region's GDP used to be mainly derived from primary products such as agriculture andforestry. During FY 2001-2002, agriculture was accounted for 41.5% of the overall
contribution of the Mandalay Region's GDP. However, it was reduced to 29.8% in FY 201011, with increasing contribution from the industry and service sectors. The industry andservice sectors could become important contributors to Mandalay's GDP by nurturing andenabling the unutilized and young labor force in labor-intensive industries. Furthermore,
foreign investors will potentially be more attracted by the industry and service sectors as
they could develop untapped market as well as providing employment to local community.

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Mandalay Investment Opportunities Survey 2015

Figure 3: GDP contribution of the Mandalay Region by sector

Source: Ministry of National Planning and Economic Development
Although Mandalay has contributed as the third GDP generating region to Myanmar's GDP,
Mandalay Region lags behind in terms of GDP per capita compared to other neighbouring
regions such as Magway, Sagaing and Nay Pyi Taw. Mandalay Region's GDP per capita is
MMK 1.011 million (USD 842) for FY 2014-15, compared to MMK 1.645 million (USD 1,370)
by Yangon.
Figure 4: GDP per capita of states and regions in Myanmar

Source: Ministry of National Planning and Economic Development
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Mandalay Investment Opportunities Survey 2015

1.3.1 Two Polar Growth Model
The comprehensive long-term planning "National Comprehensive Development Plan
(NCDP)" presents "Two Polar Growth Model" which identifies Yangon and Mandalay as thetwo growth poles or two growth centers of Myanmar. The Two Polar Model focuses onfurther industrialization of Yangon and Mandalay to enhance their economic agglomeration
with linkages via the economic corridors so that national inclusive development will beeffectively achieved for poverty reduction. These economic corridors also provide internal
connections (within the country) as well as external connections (to neighbouring Thailand,
India, Lao PDR and China).
According to the NCDP, Mandalay will be functioning as an epicenter of economic growth in
the north of the country will address 25% of the national poverty share. The idea of “TwoPolar Growth Model” is supported by Myanmar Comprehensive Development Vision(MCDV), which was prepared by the Economic Research Institute for ASEAN and East Asia
(ERIA) with the support of the Ministry of National Planning and Economic Development(MNPED). Since the plan is huge, prioritization is required due to high initial investment
costs.
Figure 5: Two Polar Growth Model

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Mandalay Investment Opportunities Survey 2015

1.4 Infrastructure
Sustainable infrastructure development in Mandalay Region is important to contribute
effectively to the country's development. Mandalay is not only the economic and social
centre of the central dry zone of the country, but also the trading hub connecting northernand southern parts of the country, China and India. Currently, both the government andprivate organizations have participated in various projects to improve overall infrastructureof the region.
The Mandalay regional government has detailed plans for regional development plans inorder to reduce the gaps between the rich and poor, improve overall living standard of thepeople, and move forward to clean government and good governance. Detailed
development plans, range from Regional Development Plan, City Development Plan, andTownship Development Plan to Village Development Plan are being initiated by respective
government councils.
1.4.1 Roads
Myanmar shares borders with Bangladesh, China, India, Lao PDR and Thailand, and is thus
strategically located at the crossroads of China, South Asia and Southeast Asia. Being in the
middle of the country, Mandalay Region is close proximity to Asia’s largest and fastest
growing markets which offers great opportunity for the region to become the land link
between China, India and the ASEAN countries.
Table 3: facts of Mandalay Region roads

Type
Union highways
Regional roads
Bridges
Registered vehicles (Excluding motorcycles)
Registered motorcycles
Sr.

District
1
2
3
4
5
6
7

Mandalay
Pyin Oo Lwin
KyaukseMeiktila
Myingyan
Nyaung-U
Yamethin
Total

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Total
24
33
3,918
146,525
1,262,024# of bridges
359
1,456
689
449
647
53
265
3,918
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Region Government (2011-2015 Plan)
Figure 6: Road linkage of Mandalay Region

Source: MMRD
To support the overall development of transportation sectors, it is important to focus on
improving all the road links within the region, which in return, leads to the improvement intransportation system and provides efficient logistic links with other regions. The regional
government has prioritized widening the union highways, upgrading roads and bridges withshort-term 5-year plans and 20-year long-term strategy to improve road infrastructure
within the region. The regional government has partnered up with private firms to build,
operate and transfer in order to upgrade current roads and build new ones.
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Mandalay Investment Opportunities Survey 2015

1.4.2 Ports
Myanmar has some 5,000 km of navigable waterways, of which about 2,400 km make up
the primary inland waterway network, including the Ayeyarwaddy River which flows
through Mandalay Region.
Ayeyarwaddy River, Myanmar’s largest river and most important commercial waterway,
acts as the major mode of inland water channel throughout Mandalay Region. The river has
also served as its main cultural and economic passage-way throughout history andcontinues to be one of its main transportation arteries. Various types of commodities andgoods such as rice, construction materials, fuel, coal, heavy machineries and consumer
goods use waterway as one of the major modes for transportation.
Although transporting goods via waterway is considered one of the cheapest ways, there
are several constraints such as not enough water in the river during summer, narrownavigation of water way and sharp bending of the river. Extensive and repeated dredging isrequired on the river as well as effective navigation and communications facilities.
To ensure free flow of goods throughout Myanmar and provide new opportunities forinternational trade before implementation of the ASEAN Economic Community in 2015,
Mandalay Region aimed to improve inland ports and waterway with the union budget andfunding from international organizations.
According to the Ministry of Transport (MOT), the following objectives will be achieved byestablishing and upgrading inland ports.
To establish standard Inland Ports at Ayeyarwaddy and Chindwin rivers in order topromote efficient cargo handling
To promote the containerization by using inland water ways
To support the facilitation of inland water transport
To create job opportunities and develop the living standards of the people

Ayeyarwaddy Integrated River Basin Management Project (AIRBMP) will be funded by theWorld Bank with USD 100 Million within 5 years (2015-2016 to 2019-2020). 3 components
will be parts of the project, including information and capacity building of water resource
institutions, modernization of hydromet observation and information systems andenhancements of Ayeyarwaddy River navigation.
Mandalay Port, located close to Mandalay city, is one of the busiest inland water ports in
Myanmar and it handles both regional and border trades of various goods. Inland Transport
Authority transports people and goods from Mandalay to various cities along the
Ayeyarwaddy River such as Yangon, Pyay, Nyaung Oo, Kathar and Bamaw. Although there is
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Mandalay Investment Opportunities Survey 2015

no official government policy to move the current port, economic and trade expansion leadto enormous increase in congestion.
With the help of international loans and financial aids, Mandalay port would be upgraded bybuilding ports, warehouses and other necessary buildings to improve loading and unloadingof cargo and vessels. Feasibility Study for Inland Water Transport Facilities Improvement
Project in Mandalay has been completed in March 2014 with the assistance of JICA. MOT
has requested the Grant Assistance to establish Mandalay Port.
Semeikhon Port is geographically located in the central part of Ayeyarwaddy River, southwest of Mandalay. It is located 11-mile to the west of Mandalay Myotha Industrial Park. This
port covers 380 acres containing the main port operation yard, processing areas,
warehousing, free trade zone and administrative, ancillary services and transshipping areas.
The port is designed to facilitate river transportation of goods and products from the
Mandalay Myotha Industrial Park, its surrounding areas and nearby towns. The port linkroad will need to be extended to provide a direct connection to Mandalay and its
international airport. Mandalay Myotha Industrial Development Public Co. Ltd. (MMID) has
done a preliminary survey of the routes for the extension.
Figure 7: Semeikhon (Si Mee Khon) Port Plan

Source: Mandalay Myotha Industrial Development Public Co. Ltd. (MMID)
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Mandalay Investment Opportunities Survey 2015

According to MMID, full Foreign Investment Law (FIL) and Myanmar Investment
Commission (MIC) privileges are available for qualified investors, along with the flexible land
use lease terms. The firm has targeted to commence general cargo operation from January
2016. Compared to the Mandalay Port which focuses on manual loading, Semeikhon (Si Mee
Khon) Port will provide modern cargo handling equipment which will allow high volume ofbulk and containerized cargo efficiently. Cargo barge is also designed to connect and movealong the length depending on river height which can vary by up to 10 meters between dry
and wet season. Dutch firm Royal Haskoning DHV has undertaken a conceptual design forthe cargo barge and crane envisaged at the port which allow loading to occur consistently all
year round regardless of the water level.
1.4.3 Railways
Mandalay is an important point for land transport services. Most of the cargoes handled at
the city are exports of beans and pulses and imports (primarily agricultural equipment andfertilizers) by land from China (via Muse) and India (via Tamu). As for import goods,
Mandalay will then distribute to different parts of Myanmar through various modes,
including railways.
Rail transport was first introduced in Myanmar in May 1877 when Lower Myanmar was a
British colony and the British extended the Taungoo line to Mandalay by 1889 from Yangon.
Since then, Mandalay-Yangon route is the busiest railway route in Myanmar andcommodities imported from China (Yunnan) are transshipped to freight cargos at Mandalay
and forwarded to Yangon. At the same time, cargo from Yangon is transshipped to China
and other parts of Myanmar via Mandalay. Mandalay connects to far regions such as Kachin
State and both Shan south and north through railway. USD 142 million Japanese ODA loan
was approved in 2014 to renovate and modernize the aged railway equipment and facilities
to provide safer, faster train service with enhanced transport capacity. Further efforts arebeing taken to get the ODA Loan/ private Investment in order to upgrade the MandalayMyitkyina Track and Signaling Upgrading Project, with the estimated cost of USD 60.57
million.
Being located in the middle of Myanmar, Mandalay and its region play an important role totransport people and various types of commodities and products across all Myanmar, fromLower Myanmar to Central, Northern, Western and Eastern Myanmar.

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Mandalay Investment Opportunities Survey 2015

Figure 8: Rail and waterway linkage of Mandalay Region

Source: MMRD

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1.4.4 Airports
Mandalay region has 2 airports, including Mandalay International Airport and Nyaung-Oo
Airport.
Mandalay International Airport, located 35 km south of Mandalay in Tada-U, is one of only
three international airports in Myanmar. Completed in 1999, the airport is the largest andmost modern airport in the country, connecting both domestic and international
destinations. It also has a 14,000-foot (4267-m) runway which is the longest runway in use
in Southeast Asia and capacity to handle up to 3 million passengers a year. The current
operation is handled by joint venture of Mitsubishi Corporation, JALUX Inc., and SPA ProjectManagement Ltd for 30 years.
With the investment of USD 13.5 million, Mandalay International Airport would be
upgraded to be an aviation and logistic hub in the region with 3 phases of cargo handling
capacity, from 4,000 tons in Phase-1 to 12,000 tons in Phase-3.
Figure 9: Passengers arrivals of Mandalay International Airport

Source: Ministry of Transport

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Mandalay Investment Opportunities Survey 2015

Table 4: List of commercial airlines operating in Mandalay Region

Sr. No.
Name of airlines
1
Myanmar National Airlines (formerly known as Myanma Airways)
2
Asian Wings
3
Air Kanbawza
4
Air Bagan
5
Yangon Airways
6
Golden Myanmar
7
Mann Yadanarpon
8
China Eastern* (Mandalay- Kunming)
9
Air Asia* (Mandalay- Bangkok)
10
Bangkok Airways* (Mandalay- Bangkok/ Chiang Mai)
11
SilkAir* (Mandalay- Singapore)
12
Myanma Airways International (Mandalay- Gaya/ Seoul)* International airlines
Figure 10: Commercial airports in Mandalay Region

Source: MMRD
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Mandalay Investment Opportunities Survey 2015

Nyaung-Oo Airport is the primary air gateway to the ancient sites of Bagan and surrounding
areas and has connected to major cities in Myanmar with domestic airlines.
1.4.5 Energy and Power
Energy and power have been an important part of infrastructure for attracting foreign
investors to Myanmar and power is also considered one of the major drawbacks about
investing in the country. By 2015, the ministry of Electric Power estimated 1,176MW ofelectricity to be used in the Mandalay Region, with the demand for electricity to increase
10% annually. With many upcoming industrial projects such as Mandalay Myotha Industrial
Park, Tada-U Development Plans, development of other industrial estates and rural area
developments, there will be a strong need for electricity and energy in near future.
The Ministry of Electric Power has 3 plans to fulfill such need for electricity.
1. Implementations by the Ministry
2. Implementations by the local entrepreneurs with Build-Operate-Transfer (B.O.T)
system
3. Implementations by foreign investors with Joint Venture or B.O.T system
Table 5: Electricity generation and distribution in Mandalay Region

Sr. No.

Description

Voltage Ratio

Installed Capacity
(MVA)

1

230 kV Myaukpyin S/S

230/33200

2230 kV Shwesaryan S/S

230/132
230/3310060

3230 kV Bellin S/S

230/132
230/33100
100

4230 kV Thaphaywa S/S

230/3360

5230 kV Thazi S/S

230/132
132/3320030

6132 kV Myingyan S/S

132/6690

7132 kV Tagundaing S/S

132/33128

8132 kV AungBinlae S/S

132/33
132/1130
31.5

9132 kV Yinmarbin S/S

132/3315

10132 kV Ahneesakhan S/S

132/3360

11132 kV Yepaungson S/S

132/3360

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Mandalay Investment Opportunities Survey 201512

132 kV Taungtawkwin S/S

132/33150

13132 kV Inngone S/S

132/3360

14

132 kV Yadanarbon S/S

132/3318

15

132 kV Latpanhla S/S

132/3320

16

132 kV Zone (2) S/S

132/3318

17

132 kV Chauk S/S

132/66/11

39.99

Total

1,570.49

Source: Ministry of Electric Power
Currently, there are 6 hydropower stations and one on-going implementation ofhydropower stations located in the Mandalay Region, which could provide up to 1,424MW
by the end of FY 2015-16. In February 2014, US-based APR had a contract with thegovernment to build a fast-track power plant in Mandalay Region. Based in Kyaukse, theexpanded power plant is one of the largest gas powered plants in Myanmar, providing
electricity to over six million people.
Figure 11: Gross production value of electricity in Mandalay Region

Source: Mandalay Regional Government
1.4.6 Telecommunication
Compared with other countries in the region, the telecommunications sector in Myanmar
used to be extremely underdeveloped. Before the foreign companies were allowed to enter,the telecommunications industry had been under the monopoly of government-owned
Myanmar Post and Telecommunication (MPT). After President Thein Sein’s government had
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Mandalay Investment Opportunities Survey 2015

come into power, improving the telecommunications sector became one of thegovernment’s top priorities. To reduce the country’s giant mobile coverage gap, thegovernment has set highly ambitious goals to increase the teledensity rate to 50 percent in
FY 2013 - 2014 and 80 percent in FY 2014 - 2015.
Figure 12: Mobile penetration of the Mandalay Region*

Source: Myanma ALin (17-8-2015) *for MPT subscriber only
To have better telecommunication in the region, Mandalay Region has been doing thefollowing agendas with the participation of various stakeholders, from governmentorganizations such as MPT to the private investors.
1. Improving and expanding of Internet Gateway (Nay Pyi Taw, Yangon, Mandalay)
2. Expanding the connection of fiber optic cables and microwave
3. Increasing mobile penetration
4. Upgrading high-speed internet
5. Upgrading post system
6. Upgrading computer and IT system
7. Upgrading telegraph system
8. Setting up e-Government National Data Center

1.5 Public and Private Investment
1.5.1 Public Investment
The regional government has been focusing on the development rural areas while upgrading
the infrastructure and facilities of urban townships so that conclusive development will beachieved within the region. For rural area development, the government has dedicatedStudy planned by MIC and JICA and prepared by MMRD

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Mandalay Investment Opportunities Survey 2015

towards building more clinics, primary schools, roads and bridges. Apart from that, thegovernment has also implemented rural electrification in all districts.
Since 2006, Yadanarpon Cyber City has been implemented with over 30 local and foreign
investors, mostly from Asia. It accommodated various firms related to information andcommunication technologies (ICT) as well as university related to ICT development.
Although the government has focused on setting up major parts of the Cyber City, privatecompanies have been selected for building residential estates. Construction companies such
as Asia Mega Link, Elite and Tawtarwin have been selected to build residential estates,
including resident buildings for the government servants.
Figure 13: Yatanarpon Cyber City Project Area Location

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Mandalay Investment Opportunities Survey 2015

1.5.2 Private investment
To improve the overall development of the region rapidly, the regional government alone
could not handle every aspect of the development or projects due to human resource orbudget constraints. Thus, private investment has been allowed in public infrastructure withvarious forms, such as, build-operate-transfer (BOT), lease agreement and also joint venturewith the government or the related ministries.
Myanmar Citizen Investments
As for private investments by Myanmar citizens, Yangon accounts for almost 54% of overall
investment in FY 2014-15 while Mandalay Region only the fifth with just 2.7% of investmentin the region.
Table 6: Myanmar citizen investments to respective states and regions in FY 2014-15(Kyat Million)
No.
1
2
3
4
5
6
7
8
9
10
11
12

State and Region
Yangon Region
Nay Pyi Taw Council
Tanintharyi Region
Shan State
Mandalay Region
Magway Region
Rakhine State
Sagaing Region
Bago Region
Ayeyarwaddy Region
Mon State
Kayin State
Total

2014-15 FY
649,965.22
236,622.77
95,648.30
94,145.97
32,954.68
19,304.77
18,285.77
17,718.61
17,524.10
13,751.78
10,000.00
1,000.00
1,206,921.97

Source: MNPED
Foreign Investment
Foreign direct investments (FDIs) inflow in Myanmar in FY 2014-15 are over USD 8 billion(MIC approved basis). Yangon Region accounts for almost half of the investment while
Mandalay Region accounts for just over 8% of overall FDI.

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Table 7: Foreign direct investment to respective states and regions in FY 2014-15(USD Million)
No.
1
2
3
4
5
6
7
8
9
10
11
12

State and Region

FY 2014-15

Yangon Region
Rakhine State
Mandalay Region
Tanintharyi Region
Magway Region
Bago Region
Shan State
Ayeyarwaddy Region
Kayah State
Sagaing Region
Magway Region
Naypyitaw Council
Total

3,766.65
1,618.19
666.54601.12460.04325.60234.20165.56144.38
16.83
9.00
2.43
8,010.54

Source: DICA

1.6 Industrial parks
Mandalay Region is located in the middle of Myanmar and considered as historical centre
for trade and transportation in Myanmar. Mandalay Region has 3 industrial zones, namely
Mandalay Industrial Zone, Myingyan Industrial Zone and Meiktila Industrial Zone.
Name of IZ
Land size (acre)
Number of enterprise
Established year

Mandalay
Industrial Zone
1,820
1,294
1990

Myingyan
Industrial Zone
163
265
1995

Meiktila
Industrial Zone
385
295
1997

Since the market economy has been introduced, joint ventures, profit sharing enterprises
and leasing of government industries have started. Apart from the big players, small andmedium enterprises also play important role in developing industries, such as supplying raw
materials and semi-finished goods as well as acting as supporting industries to the mainindustries. Thus, there is a strong need to do the following steps.
1. Amend the laws, regulations and procedures of doing and improving businessenvironment in the region
2. Improve the efficiency of logistics and transportation
3. Support the development of infrastructure
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4. Upgrade the skills of the workers by supporting with various technical training
institutes
5. Produce the potential products
Figure 14: Industrial zones in Mandalay Region

Source: MMRD
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Mandalay Investment Opportunities Survey 2015

Mandalay Myotha Industrial Park is located near Myotha (Ngazun Township) which isapproximately 36 miles away from Mandalay. It is developed by Myotha Industrial
Development Public Co. Ltd (MMID). The industrial park covers 10,337 acres and includes
specified areas for Industrial, warehouse and logistic development, residential development,road and transportation, commercial public facilities and amenities. Myotha Industrial Parkis 28 miles from Mandalay International airport and 36 miles from Mandalay.
Figure 15: The location of Myo Tha Industrial Zone

Source: MMRD

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Mandalay Investment Opportunities Survey 2015

Figure 16: Myotha Industrial Park

Source: MMID
According to MMID, the location is strategically placed and easily accessible for all industrial
and economic activities in the region. The industrial park is established to generate
employment opportunities and help to alleviate poverty in Mandalay Region and to create
and maintain an effective, pro-business and service-oriented investment environment for
Local and Foreign Investors. It is open for all types of industries such as foundation industry,hi-tech and capital-intensive industry, consumer and product service industries although it
doesn’t welcome heavy industries.
The project will continue phase by phase developments with Phase-1 with 2,500 acres(2013-2017), Phase-2 with 4,500 acres (2017-2022) and Phase-3 with 3,500 acres (2022Study planned by MIC and JICA and prepared by MMRD

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Mandalay Investment Opportunities Survey 20152025). Electricity is being connected to key areas of the site and MMID was recently
allocated 2x20MVA of 66 Kv Substation from the Ministry of Electric Power. Transmission
line and Substation construction have started and will be completed in January 2016.

1.7 Labour
Mandalay region has a population of over 6 million and is one of the most populated regionsin Myanmar. The population pyramid for Mandalay Region in 2014 is pot-shaped; an almost
similar shape to the population pyramid of the Union. With the growing young population, it
is important to provide employment opportunities and encourage the development ofpolicies and programmes. Thus, the need to provide job opportunities is critical for thegovernment and other stakeholders.
Figure 17: Population pyramid of Mandalay Region

Source: National Census 2014
There are 150,000 private employees and 120,000 government employees in Mandalay
Region. Industry sector has the workforce of over 56,000 people. They have been working invarious firms located in the industrial zones of Mandalay, Meiktila and Myingyan. To provide
more job opportunities to the local communities, there is a need to upgrade the current
industrial zones, build new zones and expand more industries in the region. Small andmedium enterprises are the main stakeholder to employ the majority of the workers in theregion.
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1.8 Mandalay District Development
Like Yangon, Mandalay has formed a special administration for its municipal areas, in theform of the Mandalay City Development Committee (MCDC), which includes seven urban
townships, with the area of 1,474 sq. miles. The major businesses of the districts areindustries, transportation and trade. The district is called 'hub city' with various air routes,
roads, railways and inland waterways strategically located between India, China and along
the Greater Mekong Subregion Corridor.
To carry out the city development works effectively, The Mandalay City Development
Committee (MCDC) was first established in 1992 under Mandalay City Development
Committee Law. It has wide-ranging responsibilities, including city planning, land
administration, tax collection and urban development. MCDC has partnered with various
companies in the form of joint venture or B.O.T to provide housing, roads, facilities andinfrastructure to the public.
Figure 18: Planned GDP by Mandalay District (Current price)

Source: Mandalay Regional Government
1.8.1 Infrastructure and commercial projects in Mandalay
With the increasing industries and machineries in the industrial zones, MCDC also focus on
the water supply system, waste water discharging system and treatment management in
Mandalay City. JICA has provided assistance of water supply system for Pyigyi Tagon
Township, worth USD 20 million. Apart from the international loans and assistances, MCDC
partnered with Hydrotek Public Company for central waste water treatment plant andStudy planned by MIC and JICA and prepared by MMRD

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Mandalay Investment Opportunities Survey 2015

collection system. To generate energy from municipal solid waste from Mandalay, OrganicGroup from Thailand also implemented with B.O.T method with support by MCDC.
Pyi Gyi Mingalar Truck Terminal was built by MCDC, made up of around 80 reinforced
concrete buildings which include trucking services, warehouses, banks, workshops and clinic.
Area is around 62 acres and finished construction at the end of 2012.

Together with CAD Construction, New Star Light Construction and Mandalay City
Development Committee, Mingalar Mandalay Project was started in 2012.

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The project finished the first phase which includes apartments, a supermarket, car parks, athree star hotel, condominiums, shop houses, an office tower and a shopping mall forresidents. An additional Pullman Hotel, condominium, villas and office towers are currently
under construction.

Mandalay Convention Centre (MCC) Project is being built on a 14.8-acre, MCDC-owned site
on southern Theitpan Road in Chan Mya Tharsi township. It is a joint venture between
MCDC, New Star Light and CAD construction. The centre will have a 1,500-seat hall, six
meeting halls, and small booths for exhibition of commodities, one 1,000 seat hall and a
2,000-vehicle car park. A commercial complex featuring a hotel, shopping centre, a 16-floor
office building and two 20-floor condominiums is expected to be built in 2017 and 2018.
Tada Oo Hotel Zone Project is situated at 14.27 miles South West of Mandalay City andplanned area of around 2,000 acres. It would be built by Myanmar Tourism Development Co.
Ltd and comprises of hotels, commercial and financial areas as well as residential areas. It
aims to create 10,000 hotel rooms in the market and 50,000 jobs for the local people.
Mandalay City Development Committee has been building Yay Dagon Taung golf course,
together with parks and recreation centres as well as high-end housing estates. Total areas
reserved for the development of parks and housing estates are 225 acres.
Developed by Mandalay Green City Co Ltd and constructed by Mann Myanmar, Than Lwin
Myat, and a dozen other local companies, the Mandalay Wholesale Market is located near
the Mandalay International Airport and plans to have trade buildings, refrigerated storage
rooms, banking services, hotels, guest houses, and exhibition halls. This 100-acre wholesalemarket project is to improve the market conditions of Upper Myanmar by decreasing
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Mandalay Investment Opportunities Survey 2015

dependency on China and the goods will mainly come from neighboring areas such as
Sagaing, Meikhtilar, Myingyan and other northern areas. It is planned to be finished in April
2017.
Figure 19: Mandalay Wholesale Market Master Plan

Source: Mandalay Green City Co., Ltd.
1.8.2 Industrial parks
Mandalay is also an industrial hub. It has over 4,000 registered industries. Almost 70% of thefirms are small and medium enterprises. Micro and small-scaled industries have up to 19
employees while medium enterprises have up to 99 workers. Large firms constitute morethan 100 employees. The industries are still weak in Waste water treatment programs.
There are around 3,000 Small-sized industries that are registered as (i) Food Processing, (ii)
Personal Care Products, (iii) Gems and (iv) Textile. The highly potential industry is the foodprocessing as the processes can be value added and the availability of raw materials.

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Mandalay Investment Opportunities Survey 2015

Figure 20: Registered industries in Mandalay District

Source: Mandalay Regional Government
Mandalay city has three industrial zones – zone 1, 2 and 3. Zone 1 began in 1990, zone 2 was
opened in 1998 and zone 3 from 2003. Zone 1, located in Pyi Gyi Tagon Township, has thearea of 1,820 acres with over 3,500 plots. Mandalay Industrial Zone Management
Committee was established to support the overall management of the industrial zones andto facilitate between the business owners and governmental organizations.
Mandalay’s industrial zones house over 1,200 factories, with focus on production of
consumer and household goods, raw material and semi-finished products, agricultural andother types of machineries and transportation.
Figure 21: Registered industries in Mandalay Industrial Zone

Source: Mandalay Industrial Zone Management Committee
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Mandalay Investment Opportunities Survey 2015

Apart from producing textiles, motorcycle tyres, detergent and other kinds of FMCG
products, the industrial zone also houses several export products from wood-basedindustries, which export mainly to France, Italy, Japan, China, Thailand, United Kingdom,
South Korea and Singapore.
According to the Management Committee, there are plans to upgrade the industrial zone toreach international standard in order to attract foreign direct investments. Thus, theCommittee has been working together with local and international consultants in training
human resources and skill development as well as building basic infrastructure to further
improve industrial zones.

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Mandalay Investment Opportunities Survey 2015

2. Understanding businesses in Mandalay (Business owners' perspectives)
Mandalay Region provides a lot of investment opportunities to all investors. Before
establishing the business, there is a need to understand the situation of Mandalay so thatwould benefit the investor. To understand investment climate of Mandalay and identify
business opportunities, a total of 42 business to business interviews were conducted in andaround Mandalay from 3 to 14 August 2015. These were further enhanced by conducting
key informant interviews to officials from regional ministries, Mandalay City Development
Committee, Mandalay Region Chamber of Commerce and Industry, and industrial zones.
Human Resource for the project teamThe project team consisted of team leader, assistant team leader, industrial survey specialist
and members of fieldwork who all have good field research experience in surveys of thisnature.
Table 8: manpower for conducting the Mandalay Investment Opportunity Survey

Scope of work

Staff

No.

Total

Mandalay Investment
Opportunity Survey

Team Leader
Assistant Team Leader
Industrial Survey Specialist
Junior Industrial survey Specialist
Junior staff for Project administration

1
1
1
1
1

5

Methodology
MMRD first undertook secondary data collection (desk research) in identifying possible
industries for the study, rule and regulation for the business setup and operation. Desk
research produced statistical information, macroeconomic data and number of business in
Mandalay.
The second stage was primary data collection (field research) in conducting business tobusiness interviews (B2Bs) with the selected potential local industries, mainly to those
involved with investment climate such as retailers, wholesalers, and distributors. Detailed
output is 42 interviews within 7 sectors within the study in Mandalay area. Apart from B2Binterviews, 20 Key Informant Interviews (KII) were conducted to regional authorities andbusiness associations.

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Mandalay Investment Opportunities Survey 2015

Key Informant Interviews (KII) were conducted to public offices and associations in order tounderstand detailed information about overview of Mandalay city and its environ, Mandalay
infrastructure development and investment climate of Mandalay.
Table 9: Detailed list of KII interviews

No.
Department

KII Interviews

1

DICA, Mandalay

2

Directorate of Hotel and Tourism

3

Directorate of Industry, Supervision and Inspection, Mandalay Region

4

Small Scale Industries Department

5

Department of Trade Promotion and Consumer Protection

6

Department of Agriculture

7

Department of Labour

8

Mandalay City Development Committee (MCDC)# of samples
14

9 Engineer Department (Water & Sanitation), MCDC
10 Engineer Department (Building), MCDC
11 Revenue Department, MCDC
12 Market & Slaughter House Department, MCDC
13 Pollution Control and Cleaning Department, MCDC
14

Saunders Textile and Vocational Institute, Small Scale Industries
Department, Ministry of Co-Operatives

Associations

6

1
2

Cargo shipping Association/ Mandalay Water Craft Owners Association
Mandalay Fruit and Vegetable Producer and Exporter Association

3

Real Estate Agent Association

4

Myanmar Sugarcane & Sugar Related Products Merchants andManufactures Association (MSMA)

5

Wood Carving Associations

6

The Highway Freight Transportation Services Association
Total

20

Business to Business (B2B) interviews were conducted to business for agriculture,
manufacturing, food processing firms, hotels and tours, construction, trading, logistic andwarehousing and SMEs in order to understand detailed information about the company
information, business setup, business operation and future business development.

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Mandalay Investment Opportunities Survey 2015

Table 10: Detailed list of B2B interviews

Sr.

Sector# of Sample

1

Food Processing

11

2

Manufacturing

103Agriculture Companies

545Hotels and Tourism
Trading, Logistic and Warehousing

556

SMEs (Handicraft)

4

7

Infrastructure (Construction and Real Estate)

2Grand Total

42

With the support by MRCCI and DICA Mandalay, the MMRD team interviewed various
sectors. Food processing and manufacturing firms contributed the highest with 49% of
overall survey. Food processing firms include sugar refinery, oil mills, biscuit factory andbeans crushing plants while cement factory, plywood factory, iron casting and tyre factory
contribute some of the manufacturing firms.
Apart from food processing andmanufacturing, agriculture, hotels and tours, trading and logistic as well as SMEs andconstruction companies have participated in the survey. Only 2 out of 42 firms are foreignowned enterprises while the rest are locally-owned.
Figure 22: Businesses by sector

Source: Mandalay Investment Opportunity Survey
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Mandalay Investment Opportunities Survey 2015

In Mandalay Region, 86% of the registered firms are small and medium enterprises and 16%
are large firms. Among all the respondent firms, 75% of the businesses are considered small
and medium enterprises as they employ up to 99 workers. Only 25% are large firms which
employ more than 100 workers. They are agriculture, manufacturing, food processing,logistics and construction companies.
Figure 23: Size of the businesses

Source: Mandalay Investment Opportunity Survey
Majority of the firms are manufacturing up to finished goods (63%) and providing services(27%). Material and part suppliers are found in agriculture machineries, manufacturing andlogistics.
Figure 24: Business activities

Source: Mandalay Investment Opportunity Survey
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Mandalay Investment Opportunities Survey 2015

2.1

Setting up the business

Mandalay Region is situated in the middle of Myanmar. Thus, for 41% of the businesses
chose Mandalay due to the location (being the centre of Myanmar). Access to raw materials,
especially for those food processing and manufacturing firms, and the ease of trading, fortrading and logistic businesses, are also two important factors to start a business in
Mandalay.
Figure 25: The reason for starting up business in Mandalay

Source: Mandalay Investment Opportunity Survey
Infrastructure constraint has been considered as the major obstacle for most businessowners. Among the infrastructure constraints, land is the main constraint for most investors.
It is difficult to find spacious land. For example, the space required by the foreign investors,
range from 20 acres to 50 acres. But inside the Mandalay industrial zone, the largest space
available is 7 or 8 acres. Furthermore, foreign investors want to lease the land for at least 15
years to at most 30 years. However, the land plots in Mandalay Industrial Zone have been
granted by MCDC for 30 years since 1995. Up to date, the valid period is left is for 10 years
only which is the limitation for foreign investors to invest in Mandalay industrial zone.
Apart from various infrastructure constraints, it also takes longer to receive official permits,land utilization permit and electricity permits. Financial constraint is mostly faced by small
and medium enterprises which have limited financial resources such as loans from banks or
government grants.

Figure 26: Major obstacles in starting up a business
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Investment Opportunity Survey
For the survey, the rating scale of 1 as very poor, 2 as poor, 3 as fair, 4 as good and 5 as
excellent are being used to measure the difficulty of doing business in Mandalay Region. The
respondents put fair to most of the tasks faced during the business setup. However, there isno governmental support or incentives to set up businesses in Mandalay Region.
Furthermore, the respondents mentioned that there is a need for improvement of businessservices in the zone as well as the need to provide one-stop service in the industrial zones tofacilitate the setup easily.
Figure 27: Business setup

Source: Mandalay Investment Opportunity Survey

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Mandalay Investment Opportunities Survey 2015

2.2

Operating the businessIn order to understand business performance of the firm, the respondents were asked therevenue, profitability, production cost and labour productivity of their firms. According to
the respondents, 56% of the businesses saw overall increase sales in 2014 compared to2013. Most hotel and tourism as well as construction companies increased in overall sales
while some agriculture, SMEs and manufacturing firms also showed the increase in sales.
However, some food processing firms and manufacturing firms faced the decrease in sales.
Compared to 2013, 41% of the firms increased their profits and 36% decreased profit. Hoteland tourism and some manufacturing firms increased their profits due to increasing interest
to Myanmar and expanding consumer market. But, 6 out of 11 food processing firms
decreased the profits in 2014 compared to 2013.
The decrease in profit also could be due to the increasing raw material prices. 90% of
production cost increased in 2014. The cost of production substantially increased in
manufacturing firms.
Productivity is important to be highly competitive in the market. Labour productivity
increased in 49% of the firms while 41% remained the same in 2014 compared to 2013.
However, 10% of the businesses decreased labour productivity due to unskilled workforce
and migration of skilled workers.
Figure 28: Business operation

Source: Mandalay Investment Opportunity Survey

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Mandalay Investment Opportunities Survey 2015

2.2.1 Macroeconomic overview and regulatory framework
Macroeconomic factors are critical for every business to make decisions on operating anddeveloping businesses. According to the respondents, macroeconomic factors are less thanfair in rating scale while governance (crime, theft and disorder) and macroeconomic stability
are considered as the worst factors.
Compared to years ago, Mandalay locals faced more crimes such as robberies and thefts as
the economic development is not inclusive to everyone. According to the respondents, inorder to lower such crimes and more safety to the general public, there is a strong need for
improvement in police force and strict punishment by the government.
Macroeconomic stability is very weak. Inflation and fluctuation of exchange rate lead to theincreased costs of raw materials, which further burden the business owners and the end
consumers.
Figure 29: Macroeconomic and governanceSource: Mandalay Investment Opportunity Survey
Compared to setting up the business, it is much easier for the businesses to handle businesslicensing and permits. Although general business licensing and operation permits are easy tooperate in Mandalay, it takes a long time to receive land permit, especially difficulty inregistering as an owner.
The income tax collection is gradually high over the years. There are a number of constraints
faced by the business owners such as poor services by IRD, complicated tax systems and notransparency. With higher income tax imposed, there is an increase in tax evasion.

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Figure 30: Regulatory framework

Source: Mandalay Investment Opportunity Survey
2.2.2 The need for infrastructure
Infrastructure has strong impact on business environment. It is a fundamental factor which
contributes to the development of highly competitive economy. Before starting up thebusiness, every investor checks all the basic infrastructures such as electricity,
telecommunication, water and transportation.
With the introduction of two private operators in telecommunication, network coverageand connectivity have been better and the service providers have become more competitive.
Thus, telecommunication has improved the most compared to the previous years. It is rated
as the highest compared to other infrastructures in Mandalay. Although telecommunicationis getting better, internet connection is still poor, according to the respondents.
Electricity has been better compared to years ago but the low voltage is a barrier to foodprocessing and manufacturing firms, which need high and consistent electricity supply. Most
industries use tube well for industry water supply and gas/fuel can be purchased easily atmarket price.
However, the business owners face poor transportation due to bad roads and insufficient
port facilities. Compared to other infrastructures, the situation of industrial estates is not
significantly improved. Office rental and land prices are high due to speculators andgovernment has no control measure with appropriate policies.
Figure 31: Rating infrastructure in Mandalay Region
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Investment Opportunity Survey
2.2.3 Quality of labour
Compared to Yangon, there is no serious problem in owner-labour relationship. The
business owners are satisfied with the quality of middle management and skilled workers.
Quality of engineers is considered good and some factories give competitive salary to keep
their employees. Some industries train workers from low level until they are in charge of theoperation. Unskilled labour is plentiful, thus, business owners have to train their staffs to besemi-skilled and skilled labour.
If the skills of the workers are better, it would increase the productivity, which could further
benefit the businesses. Thus, it is important to provide vocational trainings and assessments.
National Skills Standard Authority (NSSA), government body which establish competency
standards and conduct assessments for workforce development in Myanmar, had a pilot
training for 6 occupations in 2014. Then, NSSA provided certificated to 133 persons who
passed the assessment. With recognized certifications by NSSA, it would provide benefits toboth workers and business owners.
Although there is no issue over labour strikes, the businesses are facing Issues of skilledworkforce migrating to neighboring countries, such as China, Thailand and Malaysia, forbetter wages.

Figure 32: Rating the quality of labour in Mandalay Region
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Investment Opportunity Survey
2.2.4 Business cost in Mandalay
Average salary of a semi-skilled worker is around MMK 130,000 and staff is around MMK
180,000. Thus, it is considered comparable to salaries in Yangon and higher than national
average. Business owners in Mandalay are also aware of national minimum wage law.
Wages will continue to increase if appropriate vocational programmes, skill trainings andassessments are provided to increase the productivity.
Table 11: Average salary of the workers in Mandalay

Particulars

Response

Minimum (Kyats)

Maximum (Kyats)Semi-skilled Worker
Staff
Supervisor
Mid-management
Engineer

33
23
22
25
10

108,939($83)
139,130 ($107)
177,500 ($136)
324,000 ($250)
612,000 ($ 470)

165,152 ($127)
221,739 ($170)
258,636 ($ 198)
441,200 ($340)
1,327,000 ($1,020)

Source: Mandalay Investment Opportunity Survey (Exchange rate- K 1300/$)
Although many foreign investors came to observe Mandalay, their business plans have notbeen realized mainly due to the challenges imposed by the real estate sector. Limited spaceis also one of the issues as space required by the foreign investors range between 20 acres
and 50 acres. But in places such as the Mandalay industrial zone, the largest space available
is 7 or 8 acres. Furthermore, the rental fee is a huge cost for the foreign firms who want tomake long-term investments. For lessee, the land price of an acre land is around Kyat 1.5

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Billion and land rental fees are K 2 million per month per acre. Thus, it would be a huge
initial investment for the potential investors.
2.2.5 Logistics
Mandalay is located in the middle of Myanmar and widely regarded as the transportation
hub of Upper Myanmar. Logistics and transportation play a huge role in this region toconnect various suppliers, distributors and exporters. According to the respondents, 96% ofthem focus on domestic markets and only 4% focus on both domestic and overseas markets.
For most respondents, they have years of experiences and networking related to thelogistics. They don’t have problem with offering from domestic market, quality of local
supplier and procurement. However, there is no networking activity and potential suppliers
or customers are out of reach for overseas market. Some industries still face the difficulties
contacting capable international suppliers as well.
Figure 33: Rating logistics in Mandalay Region

Source: Mandalay Investment Opportunity Survey
According to the respondents, they have focused on domestic market and air transport is
not used to deliver their goods. Thus, they only rate land (via trucks/ rail) and river fortransportation of cargo. The respondents rated land transport higher as river transportationis seasonal and face difficulties during drier seasons.
Figure 34: Rating of reliability of each mode of transportation
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Investment Opportunity Survey
In order to enhance the investment and provide untapped opportunities, the government
normally provides appropriate policies and incentives for businesses. However, 98% of the
respondents think that the current investment incentives, such as tax privileges, are not
attractive enough to attract the investors.
Figure 35: Attractiveness of the incentives by the government

Source: Mandalay Investment Opportunity Survey
According to the respondents, the government policy related to land is the most importantfor many investors, followed by infrastructure and tax exemption. Without appropriate landsize and affordable cost, it would be hard to set up a business in Mandalay.

Figure 36: Effective incentives proposed to the government by the respondents
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Mandalay Investment Opportunities Survey 2015

Source: Mandalay Investment Opportunity Survey
Special economic zones and industrial zones are important for some countries to attract
foreign investors. 56% of the respondents think that the establishment of SEZ/IZ will beeffective to improve the investment environment because it would provide better
infrastructure, faster procedures and create more job opportunities for the locals.

2.3 Future business Development
Mandalay Region provides various business opportunities to the respondent firms.
According to their potential towards Myanmar's economic development, some would ride
rapid growth while others might face slow or even poor growth. 56% of the respondents
rated the future of their own industries as good prospect for the next 3 years because themarket demand has been increasing, more foreign direct investments and better
infrastructure and government services in future.

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Figure 37: Predicting the future of own industry in next 3 year

Source: Mandalay Investment Opportunity Survey
But, 12% of the respondents rated poor because they are likely to face more competitions
and lack of skilled workers in near future.
In order to understand which sectors are the potentials for the next 3 years, the responses
are further separated into individual's industry. Hotel and tourism businesses predicted tohave the most potential for the next 3 years. Majority of them predicted the future of hotel
and tourism is good. 80% of the respondents from agriculture sector have positive growth
for their own industry. The sector will grow if provided access to modern agriculturemachineries, seeds and fertilizers.
Sectors such as trading, logistics, warehousing, infrastructure and construction sectors willcontinue the business as per usual. Some manufacturing and food processing firms might
have to struggle due to the increase of raw material price as well as competitions fromforeign goods in terms of quality and price. Small and Medium Enterprises (SMEs), especiallythe handicrafts, will likely to grow together with tourism.

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Figure 38: Predicting the future of own industry in next 3 year (by industry)

Source: Mandalay Investment Opportunity Survey

3 Obstacles and limitations of doing business in Mandalay
Although there are much potential in Mandalay, there are also many obstacles of doing
business in Mandalay Region. The respondents have mentioned the following obstacles assome of the most crucial limitations in order to start a business in Mandalay. They are:
1.
2.
3.
4.
5.
6.

Land
Electricity
Technology
Transportation and logistics
LabourICT

3.1 LandLand price is just too high for investors. If the land is too expensive to lease/buy, thepotential investor would think twice about starting a business in Mandalay. Thus, thegovernment needs to intervene with appropriate policy to reduce land and rental prices.
According to the potential foreign investors, the land and property prices in Mandalay
Industrial Zone are very expensive. For the investors, it is hard to achieve profits as most of
the initial investment went into 30-year lease for the land. Due to the farmland law which
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stated "anyone who does not engage agricultural process but supervise the land use of
agriculture is called farmer/ agriculturist", many started buying farmland and speculated sothat land prices in Mandalay have risen up.
Currently, there are some vacant lands which are owned by speculators in the industrial
zones. Actual investors would have to pay the inflated prices to set up businesses. Thus,
there is a strong need for proper land management before developing the industrial zones.
One of the reasons of increasing land price is due to the published rate of the government.
Thus, the government should only provide the land to those who really need to develop
farms or industries.

3.2 Electricity
Electricity has been better compared to years ago. However, instability and low supply makeit harder to run manufacturing businesses. Furthermore, old transmission lines act as hazard
to the local community. Currently, there is no separate power generation plant to supply
the industrial zones. Low power supplies happen with the same distribution lines to shareamong public infrastructures, the industrial zone and residential areas. If there is a separate
power station or line catered to industrial zones, it would definitely provide benefits to the
local businesses.

3.3 Technology
Technology and technical advancement are also important factors to improve how to
operate the businesses. One of the respondents still used the machineries from 1970s to
run its business. Thus, it is important to have access to modernized machines andequipment. Both the government and banks should provide proper and sustainable financial
system for the SMEs to upgrade their capacities.

3.4 Transport and Logistics
To support the development of logistics and transportation, road condition around
Mandalay Region should be improved. Road improvements are currently implemented by
the government and private partners under build-operate-transfer scheme. With theincreasing toll fees, the SMEs have to increase their prices, which further burden the end
consumers.

3.5 Labour (Training and skill development and capacity building)Similar to most SMEs in Myanmar, workers in Mandalay Region are on-the-job trained. So,
there is a need to improve their skills and capacities through vocational trainings and skill
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assessments via government's enforcement. With the Ministry of Labour, Employment andSocial Security's involvement with NSSA and skill assessments, providing necessary trainings
and assessment will equip the general worker with the technical competencies to be askilled worker.
Social security is also important to provide appropriate healthcare and social safety to theworkers. By following the Social Security Law (2012), both the government and businessowners need to collaborate to improve social security of the workers.

3.6 ICTTo connect the potential foreign buyers and suppliers, faster access to the internet andemails is essential. Therefore, upgrading telecommunication facilities is significant for thebusinesses to receive the updated technology know-hows from other stakeholders.

3.7 Others
Apart from the above limitations described by the respondents, there are also otherinfrastructure limitations such as the need for good drainage system and water treatment
plants in industrial zones.
In order to attract foreign businesses to invest in potential sectors, developing thecomprehensive guidebooks for respective business sector, together with the FDI law andregulations, will be helpful for the investors.
Rule of law is crucial in doing business as protection and security from the government are
expected. With more thefts and crimes over the years, there is also a strong need for law
enforcement by the regional government.

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4 Potential investment opportunities in Mandalay
Mandalay is the second largest city in Myanmar and the economic hub of Upper Myanmar.
It is also considered as the centre of Burmese culture. Among the various types ofinvestment opportunities available around the region, hotel and tourism is considered themost potential business in Mandalay Region due to– Centre for trading– Transportation hub– Tourist destination
Apart from hotel and tourism, trading and manufacturing sectors are also good investment
opportunities, according to the respondents. These responses are important as the
respondents themselves are businessmen who have invested in Mandalay Region.
Figure 39: Predicting the potential sector of Mandalay

Source: Mandalay Investment Opportunity Survey
Hotel and tourism is considered as high growth industry (increasing tourists, moreinternational flights and many nearby tourist attractions) as well as readiness for investment(policy support by the government, ease of regulation by the Ministry of Hotel and Tourism
and other basic infrastructures) compared to other sectors as shown in the figure below. For
agriculture, although it has strong potential, it is less ready for investment as farming needs
land which is harder for foreigner to obtain. From the figure below, the larger the circle isthe higher the potential to the investors.

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Figure 40: Potential sectors of Mandalay Region

Source: MMRD
Hotel and tourism
Apart from being located in central Myanmar, Mandalay is strategically situated on
important river and land routes from India and China, Thailand and other parts of Southeast
Asia. It also has many historical and Myanmar cultural heritage. During the 19th century,
Mandalay was the capital of Myanmar's last independent kingdom. With the former capitalsof Ava and Amarapura are a short drive to the south, Mandalay is one of the country's mostpopular destinations for both local and foreigners.
The tourist arrivals to Mandalay have increased tremendously since 2011. Mandalay
International Airport has direct international flights from Bangkok, Singapore and Kunming.
8 domestic airlines also connect Mandalay to Nay Pyi Taw, Yangon, Bagan and otherdomestic destinations. The figure below shows the increasing number of tourist arrivals by
Mandalay International Airport.

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Mandalay Investment Opportunities Survey 2015

Figure 41: Tourist arrivals in Mandalay

Source: Ministry of Hotel and Tourism
Currently, Mandalay has 158 hotels with 6,432 rooms for visitors. Although the number oftourist arrival doubled from 2012 to 2013, the rooms available for them increased by 31%
only. This shows a huge opportunity for the hoteliers to invest in Mandalay.
Table 12: Current hotels in Mandalay

No.

Type of Hotel

Number of Hotels

Number of Rooms

1(1 ) to (20) Rooms Hotels

34

533

2

(21) to (50) Room Hotels

94

3,227

3

(51) to (100) Rooms Hotels

23

1,564

4

Above (101) Rooms Hotels

7

1,108

158

6,432

Total
Source: Ministry of Hotel and Tourism

In order to accommodate the increasing arrivals of both business and leisure travellers, 23
new more hotels will come to the market in a few years.

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Figure 42: Hotel rooms in Mandalay over 6 years

Source: Ministry of Hotel and Tourism
However, there are not many newly established high-end and business hotels although
Mandalay is the second biggest city and transport hub of the Upper Myanmar. Apart frominternational brands such as Best Western and upcoming Pullman Mandalay, Mandalay onlyoffered two premier accommodations namely Sedona Mandalay and Mandalay Hill Resort.
With more foreign investments in the Mandalay Region, more expatriates will likely to livein the city. However, there is no serviced apartment for them. With huge potential for hotel
and tourism, potential vocational trainings such as technical training school withinternational service standard will be beneficial for the local community. Training tour
guides is essential but there are other supplier skills gaps in the industry. Too muchconcentration is focusing on hospitality training and there is no support for tour
operator/Tourism Management trainings.
Potential products: High-end hotels/ serviced apartments, restaurants, river cruising
Trading
Mandalay is located in central Myanmar and it is considered as the trading hub for upper
Myanmar market. Furthermore, it has prosperous border trade with China and India. The
majority of the businesses in Mandalay are still dependent on agriculture with main
products include rice, sugar, and beans, and pulses. These commodities are generally trade
to resellers in Yangon or export to China or India. Wholesaling, warehousing, retailing andtransporting goods are potential businesses in this city.

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Current export market is mainly towards the China border. With more air transportation
with other international cities, there is a huge potential to diversify to newer export markets
via Bangkok and Singapore. Therefore, it is important to provide quality products in order toexport from and import to Mandalay Region.
Potential export products: Kitchen crops, fruits, Sesame, beans, Sugar
Potential import products: Yarn, Agri machineries, Motorcycle parts, Plastic ware
Manufacturing
Mandalay is an industrial hub for Upper Myanmar. Mandalay Region alone has over 7,000
firms and Mandalay industrial zone has over 1,200 registered industries including woodbased production, textile, concrete and cement manufacturing. Manufacturing creates job
opportunities for the local community and gives small and medium enterprises a chance tobe suppliers for raw materials to semi-finished goods.
Table 13: Type of industries in Mandalay industrial zone
Sr.
1
2
3
4
5
6
7
8
9
10
11
12
13

Type of Industry
Food products
Apparel
Products for living
Consumer productsHousehold products
Arts and literature
Raw Materials
Metal processing
Agricultural tools
Machinery and tools
Vehicles for transportation
Electrical products
General industries
Total
Source: MRCCI

Number of firms
189
32
45
54
15
3
40
220
4
1
25
12
654
1,294

Although Mandalay Region may not provide technical and experienced human resource andother infrastructures for manufacturing of modern state-of-the-art electronic products andappliances, investors can start with developing electric products, especially related to homeand household appliances. With Mandalay International Airport connecting to otheroverseas capitals such as Bangkok and Singapore, air freight can be used for the investors totransport raw materials or finished goods. Mandalay Myotha Industrial Zone is just one-hourStudy planned by MIC and JICA and prepared by MMRD

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Mandalay Investment Opportunities Survey 2015

plus drive from the airport and it could provide the potential investors with the basic
infrastructures, such as land, electricity and water supply, needed for manufacturing.
Vietnam alone could export 20% of Samsung products out of its country; so hopefully,
Myanmar could start persuading the foreign investor to start such large-scaled
manufacturing plants. Manufacturing electric/electronic products also promotes thedissemination of technology to the local firms, enhancing innovation and productivity
growth. However, there are some infrastructure limitations such as land and electricity
which deter investors from starting up the business. Regardless of such limitations,manufacturing in Mandalay still provides potential to the potential investors.
Potential products: Plastic, Electrical and Electronic Products, Fertilizer, Packaging
TextileDomestically, Mandalay Region is famed for its textile and clothing. Weaving industry hasflourished over the centuries, with Amarapura synonymous with quality silk ware. With such
experiences, textile industry is considered potential for those investors who want to provide
technical expertise to the local businesses. Myanmar grows cotton for domestic
consumption in the dry zone, which includes Mandalay Region. However, lack of modern
technology and methods have made the businesses rely on Chinese yarn to produce clothes.
Furthermore, the dyeing industry has not fully developed to support the domestic andpotential international garment supply. Therefore, foreign investments to cotton processing
and dyeing of textiles are needed in Mandalay Region.
Potential services: cotton processing, dyeing industry
Agriculture
Although its contribution to the economy is getting lessen throughout the decade,agriculture still is one of the major contributors to the region and still accounts for over 28%
of overall GDP. According to Mandalay Regional Government, the government plans to growmore major crops such as rice, maize, sesame, sunflower, pulses and beans, sugarcane andcotton. In 2015, Mandalay Region uses over 40% of its land for cultivation of crops.

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Table 14: land utilization of Mandalay Region in 2015

Type of land
Total Area (in acres)
Net area sown
3,320,579
Cultivable waste land
67,980Reserved forest
1,553,619
Fallow land
619,151
Other land
2,071,283
Total
7,632,612
Source: Ministry of Agriculture and Irrigation
Being located in the dry zone of Myanmar, oilseeds, pulse and beans account for over 50%
of overall net area sown in Mandalay Region.
Figure 43: Total sown areas in Mandalay Region by type of crops

Source: Ministry of Agriculture and Irrigation
To improve livelihood of the farmers and income, there is a need to conduct continuous
research and development on agriculture sector, provide quality seeds and train newer
methods of agriculture. Department of Agriculture, under the Ministry of Agriculture andIrrigation, has teamed up with private companies and consultants to educate the farmers
with technical trainings and field days. At Htone Bo, Post-harvest Technology Training
Centre was set up with the support of KOICA in 2014. So far, altogether 472 candidates havebeen trained out of 16 trainings. Wholesales market, which will enable the strong local andforeign markets and auction system, has been under planning in Sint Kaing Township.
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Potential investor could participate in agriculture sector by importing agricultural
machineries such as tractor, plough and harvester, quality seeds and fertilizers.
Potential products: Importing agricultural machinery, quality seeds
Food processing
Food processing industry is related to agriculture. If the agriculture offers quality products,
the food processing industry could grow by providing quality goods for end consumers.
Mandalay Region has abandon raw materials for food processing industries, from oilseeds,
crops to kitchen crops and fruits. Kitchen crops, vegetables and long-termed fruits accountfor around 20% of cultivated areas of Mandalay Region.
Major fruits such as mango, watermelon, honeydew, grapes and papaya are grown not only
for domestic consumption but also for overseas exports. Mango is considered the mostpotential fruit as it can be consumed differently, from fresh to dried fruits. Furthermore,
Mango is now being planted with a group effort so that it could not only be consumed
domestically but also to be exported to overseas market such as Singapore. Apart fromexporting fresh fruits, mango could be further processed into juice and dried fruits. Since
Mandalay is border with Shan State, the investors can also have easy access to fresh
vegetables and fruits which can be used to value-add to high quality dried or processed food.
Potential products: Canning/ dried fruits, dairy products, sesame oil
Transportation
Mandalay is an important transshipment point for trade with China and India as well as for
Myanmar’s Northern States and Regions. Cold chain logistics is crucial for providing quality
fruits and vegetables to consumers. Currently, there isn't much cold chain logistics andstorage in the region. The exporters even use normal trucks to transport fruits to China
border. Thus, it would be considered as an opportunity for some investors with logistics andtransportation background.
Potential products/services: Cold chain logistics
Real estate and infrastructure
Investing in infrastructure is important to enhance the development of a region. Mandalay
has so many ongoing and planned infrastructure construction projects. A foreign investor
could participate by build-operate-transfer of infrastructure projects with the regional
government in order to develop the region.
Potential products/services: Mandalay Development Master Plan- infrastructure projects,
Trade and Industrial Centre Project and New Industrial zone project

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5 Recommendation and action plan to improve business environment andinvestment promotion
Overall Mandalay investment climate is good, according to the respondents of Mandalay
investment Opportunity Survey. Both government and private firms are implementing
various infrastructure development programs to improve the business environment in
Mandalay Region.
Mandalay Region provides great potential with various investment opportunities forinvestors. Hotel and tourism, trading and manufacturing are some of the most potential
sectors. With various tourist attractions located in the region, hotel and tourism sector
could be the most potential for many investors. Central location in Myanmar makes
Mandalay attractive trading venue to start trading and logistics businesses. Improved qualityof various manufactured products could go far beyond China’s border market, to otheruntapped markets such as Singapore, Japan and even Europe.
However, Mandalay also faces several challenges, from institutional to infrastructure needs.
There are a number of things for all stakeholders to initiate:
1)

Handling land prices

Although many foreigner investors visited Mandalay for potential opportunities, theirbusiness plans were not implemented mainly due to the challenges imposed by the realestate limitation. As for example, foreign investors would prefer to lease between 15-30
years for long-termed investment. However, the land plots in Mandalay industrial zones
have been granted by MCDC for 30-year since 1995. Thus, the valid period is only 10 years,
which is harder to make long-termed investment for foreign businesses.
The regional government should set appropriate policies in order to stop speculation suchas the time limit to start a factory or business after receiving land permit from thegovernment and promote industrialization in the region with concrete incentives. Apartfrom setting the policies, the government and officials should educated the businesses,
including speculators, to move forwards to inclusive growth rather than increasing
individual's prosperity.
2)

Upgrading electricity, water, transportation and other infrastructure

Infrastructure is one critical factor for every investor to consider when starting a business.
Although the basic infrastructure is considered fair to the local businesses, it may not be thesame for the potential investors which need better infrastructure and services to operate
their businesses.

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Both the government and private firms have been actively participating in improving all thebasic infrastructure, including road, electricity, water supply and telecommunication. Apartfrom the regional government and Mandalay City Development Committee, foreign
investors are also invited to participate in upgrading infrastructure in Mandalay Region.
3)

Providing skilled workforce

Mandalay Region is the second largest urban area and third most populated region in
Myanmar. It is easier to find unskilled and general labour although skilled workforce isharder. Furthermore, there is also a case of brain drain, with more skilled workers
frequently leaving for higher wages in Yangon or neighbouring countries. Since the majorityof businesses are small and medium enterprises, on-the-job training is mainly focus andthere is also lack of familiarity with training and modern business practices.
Myanmar-Japan Center for Human Resources Development, supported by JICA, provides aseries of trainings and courses to middle management and aspiring entrepreneurs in bothYangon and Mandalay in association with UMFCCI and MRCCI respectively. Supervised by
the Ministry of Commerce, the courses include business plan development, strategic
marketing, human resource management, quality control, financial and project
management.
Mandalay Region should consider creating partnership with international institutions such
as Japan International Cooperation Agency (JICA) and The Deutsche Gesellschaft fürInternationale Zusammenarbeit GmbH (GIZ) to develop tailored trainings and workshops toupgrade skills and capacity of the workers. The government has set up National Skills
Standard Authority (NSSA) under the Ministry of Labour, Employment and Social Security(MoLES) to improve competency standards of semi-skilled and skilled workers and NSSA
awarded certificates to skilled workers of 6 occupations in February 2015. Thus, theinvolvement and commitment from Mandalay Region Chamber of Commerce and Industry(MRCCI) and MoLES as well as support from the regional government and international
agencies are needed to build capacity and improve specific technical skills of the workforce
in Mandalay.
4)

Departments' supports for new investments

To improve overall business environment of Mandalay, the strong supports by governmentand relevant departments are essential. According to the respondents, government
support's on investment regulations as well as effectiveness of government procedures are
rated low. Also based on the two foreign investors among the respondents, they faced highrental prices for land and buildings and slow procedures for permits and licenses forbusiness setup. With the new established Directorate of Investment and Company

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Administration (DICA) office in Mandalay, it is expected for future businesses to receive
benefits and supports by the government.

5.1 Action plans for the DICA Mandalay
Directorate of Investment and Company Administration (DICA) office in Mandalay isrelatively new. Therefore, it is important to improve capacities and skills of the team inorder to serve the clients with best efforts. Effective capacity building benefits both theorganization and other stakeholders in strengthening trust and building commitment.
1) Functional capacity building
Firstly, there is an importance to build functional capacities. These are the management
capacities that are needed to formulate, implement and review core strategies, programs
and projects by DICA Mandalay. Since functional capacity building focuses on 'getting things
done', most organizations are likely to focus on these capacities. DICA Mandalay should
follow the followings:


Engage business communities

DICA Mandalay acts as the intermediary between the government and businesses. It also
focuses on supporting business associations and developing as the coordinating body
between the government and other stakeholders. Thus, engaging the business communities
would build trust and understanding among different stakeholders. By understanding theconstructive feedback by the communities, the DICA Mandalay could provide better services
to the potential investors.


Formulate policies and strategies

Upon understanding the needs and requirements by multiple stakeholders, the DICA
Mandalay can initiate the appropriate policies to attract domestic and foreign investmentsin the region. Technical skillsets such as strategic thinking, operational planning andfeasibility analysis are needed. Therefore, collaboration between the department andinternational institutions will be essential to develop skills and capacities.


Monitor and evaluate

The department should monitor, gather information and analyze data related to upcoming
and potential industries. With such data available, DICA Mandalay could provide evaluation
and recommendation to prospective investors.
2) Technical capacity building

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Mandalay Investment Opportunities Survey 2015

Apart from the functional capacities, technical capacities are also important to improve theskills of the staff. They tend to be acquired through more formalized instruction, study andpractical training. Technical capacity building focuses on building technical expertise of DICA
Mandalay.
Provide technical trainings to DICA Mandalay staff

Upgrading the technical skills of the DICA Mandalay staff is crucial to provide outstanding
services to the investors. Thus, there is a need to have collaboration between thedepartment and domestic/ international institutions to develop tailored curricula toenhance the skills and capacities of the staff. Although in-house training could be easily
established, private-public partnerships with international organizations could benefit toprovide specific technical skill trainings.

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Mandalay Investment Opportunities Survey 2015

6. Feedbacks from Stakeholder's Meeting about the Mandalay Investment
Fair
Stakeholders' meeting for upcoming Mandalay Investment Fair was held at Mandalay
Region Chamber of Commerce and Industry Training Hall, Mandalay on 28 August 2015. A
total of 72 participants attended this meeting, including H.E. U Aung Zan, Union Minister for
Planning and Economics in Mandalay Region and U Aung Naing Oo, Secretary of Myanmar
Investment Commission.
Table 15: Participants of Stakeholder's Meeting
Sr.
1
2
3
4
5

Participants
Government departmental officials
Business Associations
Business Owners
JICA and MMRD
Media
Total

Numbers
18
18
20
6
10
72

Figure 44: Stakeholders' meeting for upcoming Mandalay Investment Fair

Photo: U Aung Zan, Union Minister for Planning and Economics in Mandalay Region
Source: MMRD

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Mandalay Investment Opportunities Survey 2015

Brief opening remark by U Aung Zan, Union Minister for Planning and Economics in
Mandalay Region
The Mandalay Stakeholders' meeting is held to showcase Mandalay Investment Opportunity
Survey, which was conducted during July and August 2015, to support the Mandalay
Investment Fair, which would be supported by Mandalay Region Government. From the
Mandalay Investment Fair, Mandalay Region will improve investment opportunities; create
more job opportunities and more opportunities for the local SMEs to connect with bothforeign and local investors to enter international markets.
Brief remarks by U Aung Naing Oo, Secretary of Myanmar Investment Commission
U Aung Naing Oo explains the objectives of holding Investment Fair in Mandalay, namely;
1. The importance of Mandalay Region as part of one polar growth stated by Two-polar
Growth Strategy (Yangon polar and Mandalay polar) in Myanmar, which is defined in
National Comprehensive Development Plan (2011-2031)
2. Although the GDP contributed by the Mandalay Region is one of the highest in
Myanmar, there isn’t much development despite lots of potential in the region
As for example, according to the foreign direct investments (FDIs) have been
approved in Myanmar; the Yangon Region has the highest FDIs with 483 while
Mandalay Region only has 19. Thus, there is a need to support all the investment
opportunities to reach its potential in Mandalay.
3. Current situation of small and medium enterprises (SMEs) has shown the slow
growth. If the local SMEs could connect with the foreign investors and develop as the
supporting industries, it would bring the win-win strategy for both parties.
4. Mandalay is trade hub and provides a lot of potentials. Mandalay Investment Fair
could support the potential to reach to actual developments.
5. Foreigners know Mandalay as the tourist city but not as a commerce or trade city sothis Fair could provide the untapped opportunities for potential FDIs.
6. This Fair is also to overcome the technological and financial needs faced by the local
businesses in Mandalay.
According to MIC, below are the some of the potential businesses in Mandalay Region
1.
2.
3.
4.
5.
6.

TextileFood processing
Production of electronic products
Tourism
Logistics (Dry port and border trade)
Infrastructure

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Mandalay Investment Opportunities Survey 2015

Brief remarks by U Aung Than, President of Mandalay Region Chamber of Commerce andIndustry (MRCCI)MRCCI welcomes the first ever Mandalay Investment Fair in Mandalay. MRCCI and related
27 associations are urged to support the Mandalay Investment Fair to be successful.
Brief remarks by Mr. Toru Homma, Advisor in DICA from Japan International Cooperation
Agency (JICA)
This Mandalay Stakeholders' Meeting will act as an important step to deliver the facts
collected from Mandalay Investment Opportunity Survey and upcoming Mandalay
Investment Fair.
Presenting the findings of Mandalay Investment Opportunity Survey by U Ahkar Soe,
Research Manager from MMRD
The objectives, methodology and research process are presented before delivering thefindings from the Mandalay Investment Opportunity Survey, the potential investment
opportunities and the needs for improvement in Mandalay Region.
Presenting the Mandalay Investment Fair Plan by U Aung Min, Research Director from
MMRD
Programmes from the Mandalay Investment Fair, such as seminars, exhibition, businessmatching, site visit, potential guest list and participants are discussed.
Additional discussions
1. Discussion by U Tin Maung, Mandalay Region Real Estate Agent Development
Association
According to the potential foreign investors, the land and property prices in Mandalay
Industrial Zone are very expensive. Due to the farmland law which stated "anyone who
doesn’t engage agricultural process but supervise the land use of agriculture is called
farmer/ agriculturist", many speculated to increase the land prices in Mandalay. One of thereasons of increasing land price is due to the published rate of the government. Thus, thegovernment should only provide the land to those who really need to develop farms orindustries.
2. Discussion by Daw Than Than Swe, Chairperson of Mango Group, Deputy Chair ofMandalay Region fruit, flower and vegetable producers association

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Mandalay Investment Opportunities Survey 2015

Since 2010, Ministry of Commerce, Ministry of Agriculture, FAO and mango productiongroup have collaborated to improve the quality of mango. Since mango is one of the major
fruits from Mandalay Region, there are various opportunities for foreign investors to
improve food processing technology, packaging system, cold storage system.
3. Discussion by U Win Htay, Deputy Chair of Mandalay Region Sugar and Sugarcane
Association
Due to locally-made machineries, lack of raw materials and technology, Mandalay sugar
refineries lost out on the quality and production by modern machineries. Previously,
Mandalay accounts for over 50% of sugar processing and production in Myanmar. However,the production has dropped a lot in recent years so there is a need for investment.
4. Discussion by U Aung Kyi Soe, joint-secretary of Union of Myanmar Federation of
Chambers of Commerce and Industry and EC of MRCCIMRCCI would need the support from Myanmar Investment Commission in monitoring
investment and level of potential investors so that it would facilitate the investment mucheasier.
Confirmation of programmes by U Aung Naing Oo, Secretary of Myanmar Investment
Commission
In order to let the investors know what Myanmar is planning for future, planningdepartment should deliver National Comprehensive Development Plan (NCDP) in theseminar. It is also important to present the brief investment law and regulations ofMyanmar as well as deliver the logistics and transportation sectors in the region. Sinceelectricity is also 2nd most important infrastructure for investment, it's critical to provide
how much supply the Ministry could deliver in future. MRCCI should explain the situation of
Mandalay businesses while Myotha Industrial Zone should state the potentials of its zone.
Summary of meeting by U Aung Min, Research Director from MMRD
The followings are discussed:
1) Invitation to other CCIs from Sagaing, Magway and Lashio as well as chili production
association from Kyauk-Se2) 7 presentations in Mandalay Investment Fair and presentation slides should be sentby 20 September 2015 in English language
3) Selecting one panelist by MRCCI and inform the organizers
4) 5 remaining exhibition booths to be selected by MRCCI (apart from logistics, tradepromotion, hotel association and ministry, Myotha and Mingalar Mandalay)

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Mandalay Investment Opportunities Survey 20155) Setting up business matching by sector such as agriculture, food processing,electronics, and etc.
There is an urgency to deliver exhibition and business matching lists to the organizers to beconveyed to investors. The meeting was successfully concluded with the conclusion remarksby U Aung Than, Chairman of the Mandalay Region Chamber of Commerce and Industry.

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7. Feedbacks from Mandalay Investment Fair
Mandalay Investment Fair was held at Mandalay Hill Resort Hotel Grand Ballroom,
Mandalay on 30 September 2015 to promote the investments in Mandalay area and to linkpotential investors to local business partners. A total of 406 participants attended Mandalay
Investment Fair, including Union Minister H.E. U Zay Yar Aung, Chairman of Myanmar
Investment Commission, H.E. U Ye Myint, Chief Minister of Mandalay Region Government,
Daw Lei Lei Thein, Deputy Minister of Ministry of National Planning and Economic
Development and ministers of Mandalay Region Government as well as departmental
officials, embassies and international organizations, foreign investors, business associations
and local businesses from Mandalay.
Table 16: Participants of Mandalay Investment Fair
Sr.
1
2
3
4

Participants

Numbers

SeminarExhibitors
Organizers
Media

318
30
38
20
406

Total
Table 17: Participants of Mandalay Investment Seminar
Sr.
1
2
3
4
5
6
7
8
9
10
11

Participants
VIPs
Panels and speakers
State/Region government
Government officials
Embassy and international organizations
Foreign investors
UMFCCI and chambers
MRCCI
Affiliated Associations
Local businessBusiness participants
Total

Study planned by MIC and JICA and prepared by MMRD

Numbers
12
13
6
36
35
76
4
20
50
31
35
318

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Mandalay Investment Opportunities Survey 2015

Table 18: Agenda of Investment Fair seminar and business matching

Mandalay Investment Fair Agenda (30 Sept 2015)
09:00－09:30

Registration

09:30－10:00

Opening
Ceremony

Mandalay Investment Fair Exhibition officially opened by guests ofhonour (Exhibition continues until 16:00)

Seminar
10:00－10:10

KeynoteSpeech

H.E. U Ye Myint, Chief Minister, Mandalay Region Government

10:10 – 10:25

Opening
Speeches

U Aung Than, President, MRCCI

10:25－10:40

KeynoteRemarks

H.E. U Zay Yar Aung, Chairman of Myanmar Investment Commission(MIC) and Union Minister of Energy and Union Minister ofCommunications and Information Technology

10:40－11:00

Photo Session and Coffee Break

11:00－11:10

Presentation 1: “National Comprehensive Development Plan”

Embassy of Japan

Daw Thwe Thwe Chit, Deputy Director General, Planning
Department, Ministry of National Planning and Economic
Development
11:10－11:20

Presentation 2: “Investment in region: Regulatory framework updates”
U Aung Naing Oo, Secretary of MIC and Director General of
Directorate of Investment and Company Administration (DICA)

11:20－11:35

Presentation 3: “Summary of Mandalay Investment Opportunity Survey”- Mr. Toru Homma, JICA Advisor, DICA
- U Aung Min, Research Director, MMRD

11:35－11:45

Presentation 4: “Transport and logistics development: Mandalay”- U Aung Ye Tun, Director, Ministry of Transport- Daw Ohmar Maw, Myanmar International Freight Forwarders’
Association (MIFFA)

11:45－11:55

Presentation 5: “Development of electric power in and around Mandalay”
U Aung Kyaw Htoo, Assistant Chief Engineer, Ministry of ElectricPower

11:55－12:05

Presentation 6: “Business in Mandalay: Local private sector’s view”
Dr. Maung Maung, Secretary General, MRCCI

12:05－12:15

Presentation 7: “Development of Mandalay Myotha Industrial Park”
Dr. Tun Tun Aung, Managing Director, Mandalay Myotha Industrial
Development (MMID)

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Mandalay Investment Opportunities Survey 201512:15－12:40

Panel Discussion: “Invest in Attractive Mandalay”
Moderator: Prof. Dr. Aung Tun Thet, President's Economic Advisor,
Vice Chairman of National Economic and Social Advisory Council(NESAC) and Member of MIC
Panelists: U Aung Naing Oo (MIC Secretary), Mr. Marvin Yeo(Corporate Strategy Advisor, New Star Light Construction), U AungWin Khaing (Chairman, MMID) and U Bo Bo Wai Maung (Financial
Specialist)

12:40－12:55

Floor Q & A Session

13:00－14:00

Networking Lunch hosted by organizers

14:00－16:00

Business Matching (in 10 groups as below)(1) Agriculture, (2) Food processing, (3) Manufacturing, (4) Electronics, (5) Textile,(6) Sugar, (7) Iron/metal/shipyard, (8) Infrastructure, (9) Hotel & tourism, (10)OthersTable 19: Agenda of Investment Fair optional site visit Tour

Optional Site Visit Tour (1 Oct 2015)
08:00

Participants depart from Mandalay Hill Resort Hotel by bus

08:30 – 09:00

Mingalar Mandalay Development Project (Participants can also join here atInformation Centre)

10:30 – 11:30

Myotha Mandalay Industrial Park (Presentation in office)11:30 – 12:00

Myotha Mandalay Industrial Park (Site observation)

13:00 – 13:45

Lunch at Semeikhon Port

13:45 – 14:30

Semeikhon Port (Presentation and site observation)

16:00

Arrive at Mandalay Airport for departure (and then Mandalay City)

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Mandalay Investment Opportunities Survey 2015

Figure 45: Keynote speech by H.E. U Ye Myint, Chief Minister, Mandalay Region
Government

Photo: H.E. U Ye Myint, Chief Minister of Mandalay Region Government
Source: MMRD
Brief keynote speech by H.E. U Ye Myint, Chief Minister of Mandalay Region Government
Located in the central part of Upper Myanmar, Mandalay lies along the border trade routeto China, India and Thailand and has huge potential business opportunities. In order toimplement such business opportunities, there is a need for collaboration and cooperation
by local and foreign investments as well as supports by international organizations.
Mandalay Region Government will work together to support all the businesses who want toinvest in Mandalay Region while trying its best to improve the infrastructure.

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Mandalay Investment Opportunities Survey 2015

Opening speeches by U Aung Than, President of Mandalay Region Chamber of Commerceand Industry (MRCCI) and Mr. Hideaki Matsuo, Economic Counsellor, Embassy of Japan
Opening speech by U Aung Than
Mandalay Investment Fair is meant for promoting the business cooperation among thedomestic and foreign investors and improving economic growth. Not only it has great
potential to start the investment market but Mandalay Region is a region through which
trade links with China and India and Thailand.
Opening speech by Mr. Hideaki Matsuo
Both Japanese government and corporations have demonstrated strongest commitment
and passion towards Myanmar's development and inclusive growth, one of which is theThilawa Special Economic Zone; Myanmar first SEZ which was operational in September
2015 and attracted to substantial foreign investments. Japanese government has also
contributed in critical infrastructure of Mandalay, including upgrading Yangon-Mandalay
Railway, improving ICT networks along Yangon, Nay Pyi Taw and Mandalay. Apart from
infrastructure, Japan also contributed in conceptualization of the future of Myanmar such as
involvement in Myanmar Industrial Development Vision (MIDV) which aims for
simultaneous development of both urban industries and rural agro forestry. Increasing
number of Japanese companies are interested in doing business in Myanmar, especially in
Mandalay so Embassy of Japan wishes success of Mandalay Investment Fair and future of
Mandalay.
Keynote Remarks by H.E. U Zay Yar Aung, Chairman of Myanmar Investment Commission(MIC)
Mandalay is the second largest city in Myanmar in terms of physical and transport
infrastructure, dense population and economic scale compared to other parts of Myanmar
with a vast potential for development and investment including agriculture, agro/foodprocessing, manufacturing and other type of business.
Four important points are being raised. Firstly, this Investment Fair is the very first attempt
and it is also the very first international event focusing on Mandalay. Secondly, this“investment fair” consists of four (4) useful events, namely seminar, exhibition, businessmatching and site visit tour. Thirdly, the comprehensive long-term policy planning guidance“National Comprehensive Development Plan (NCDP)” presents Mandalay as one of the mostsignificant ideas, “Two Polar Growth Model”. Finally, Mandalay has vast potential forinvestment; the second largest urban area with 1.2 million urban populations. Consideringbusiness in Mandalay contribute to the development of Mandalay, development of
Myanmar and win-win partnership between the investors and the nation.
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Mandalay Investment Opportunities Survey 2015

Presentations
There are 7 presentations by various industries such as
1. "National Comprehensive Development Plan" by Daw Tin Tin Myint, Director ofPlanning Department, Ministry of National Planning and Economic Development
2. "Investment in region: Regulatory framework updates" by U Aung Naing Oo,
Secretary of MIC and Director General, Directorate of Investment and Company
Administration (DICA)
3. "Tentative summary of Mandalay Investment Opportunity Survey”" by Mr. Toru
Homma, JICA Advisor for DICA and U Aung Min, Research Director, MMRD
4. "Transport and logistics development: Mandalay" by U Aung Ye Tun, Director,
Ministry of Transport and Daw Hla Hla Yee, Secretary, Myanmar International Freight
Forwarders’ Association (MIFFA)
5. "Development of electric power in and around Mandalay" by U Aung Kyaw Htoo,
Assistant Chief Engineer from Ministry of Electric Power
6. "Business in Mandalay: Local private sector’s view” by Dr. Maung Maung, Secretary
General of MRCCI
7. "Development of Mandalay Myotha Industrial Park” by Dr. Tun Tun Aung, Managing
Director of Mandalay Myotha Industrial Development (MMID)
Figure 46: Mandalay Investment Fair Seminar

Photo: U Aung Naing Oo, Secretary of MIC
Source: MMRD
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Mandalay Investment Opportunities Survey 2015

Panel Discussion "Invest in Attractive Mandalay""Invest in Attractive Mandalay" is discussed by 4 panelists and moderated by Dr. Aung Tun
Thet, President’s Economic Advisor, Vice Chairman of National Economic and Social Advisory
Council (NESAC) and Member of MIC. Panelists are U Aung Naing Oo (Secretary of MIC), Mr.
Marvin Yeo (Corporate Strategy Advisor, New Star Light Construction), U Aung Win Khaing(Chairman, MMID) and U Bo Bo Wai Maung (Financial Specialist).
According to bi-polar growth economic development strategy, Mandalay will be one of theimportant contributors for the economic development of Myanmar. It also has the highest
potential for development such as location, resources, and attractiveness to foreign
investors in the country. Within a 600 mile radius of Mandalay, there is a population of 600
million people connected by land, which is the size of Southeast Asia. With continuing
investments in infrastructure, Mandalay can become a large logistic and trading hub in theworld with upcoming AEC 2015 and ASEAN-China FTA.
Based on the potential of Mandalay, there are many main areas for investment. The first iselectronic assembly business. With a better supply of younger generation in Mandalay
region, electronic assembly businesses would be potential for the country. Number two isfood processing as Mandalay has a lot of potential to promote food procession businesses.
Number three is textile industry. Mandalay has a lot of potential for the development of the
textile industry in Myanmar. All local textile producers are in Mandalay and provide huge
opportunity for textile industry. Those are the three key industry sectors for potential
investment or FDI in Mandalay. Number four is logistics. The tourist arrival goes from
700,000 in 2010 to over 3 million in 2014 and 80-90% of tourist comes to Mandalay, thus,
tourism business is important and high potential market. The industrial productions andmechanic type of manufacturing and services also have business opportunity in Mandalay as
well as servicing all the heavy trucks. Mandalay is the main second hand car maker for thewhole country with very good mechanics, and technology surveyed mechanics and service
providers.
According to the MIC, what Myanmar provides will be equal, if not better to all the otherneighboring countries. However, Myanmar focuses on responsible investment, ensuringthat foreign investors who come to Myanmar also focus on social responsibility. Once thefirm gets MIC permission, it must be a member of UN global compact, the largest CSR in theworld that combats human rights, labor rights, environment and anti-corruption in
Myanmar.
Practical information and data are important for the investors which to make businessdecision not only in Mandalay but in Myanmar. The MRCCI could provide more informationsuch as logistics, labor, construction, transportation in Mandalay. DICA also will upload
useful information to be available to all investors on www.dica.gov.mm.
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Mandalay Investment Opportunities Survey 2015

Regarding about FDI promotion plan, Myanmar and MIC has 20-year plan, which includes
China+1 and Thailand+1 policy as many investors are thinking of relocating from China to athird country. A survey done by the World Bank in Myanmar for investment climate
assessment highlights the four keys by surveying local SME: finance, land acquisition,
electric power, and skill level. The government is trying its best to overcome those
constraints. The financial system is lacking for all of Myanmar, in Yangon some progress canbe seen but Mandalay is still far behind. For human capital, Myanmar has talented people
but all the returnees come to Yangon, with very few come back to Mandalay. Thus,
Mandalay needs the investment first followed by the technology and skillset. For bothtechnology transfer and investment, Mandalay needs FDI. Foreign investors bring in 4
things: finances, technology, market or access to market, and a new management culture
which Myanmar needs. Local people provide invaluable and priceless local knowledge of
local market, behavior, and attitudes. Both local businesses and foreign investors havesomething each other need to set up cooperation.
The Mandalay Investment Fair Seminar was successfully concluded at 13:30pm, which was
followed by business matching session between local businesses and foreign investors until
16:00pm on 30 September 2015 and site visit tour on 1 October 2015. A total number of
120 participants attended site visit tour which included a visit to Mingalar Mandalay,
Myotha Industrial Park and Semeikhon Port.
Figure 47: Mandalay Investment Fair Panel Discussion

Source: MMRD
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Mandalay Investment Opportunities Survey 2015

Business Matching
Foreign investors participated in the Mandalay Investment Fair and the Mandalay business
community including 52 local companies had the opportunity to connect in the prospect of
future partnerships.
1) Agriculture2) Food processing3) Manufacturing
4) Electronics/Electric5) Textile6) Sugar
7) Iron/ Metal/ Shipyards8) Infrastructure9) Hotel and Tourism10) Others (IT & Telecom and services)

Figure 48: Business Matching

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Mandalay Investment Opportunities Survey 2015

Exhibition
Booths of ministries, industrial parks, local industries and development project are displayedfor potential investors. List of exhibitors are as follows;
Booth
No.
1

Sector3

Hotel and Tourism

Department of Transport & MIFFA
Department of Trade Promotion and Consumer
Protection
Directorate of Hotel and Tourism

4

Industry

Ministry of Industry

5

Myotha Industrial Zone Project

MMID

6
7

Mingalar Mandalay (MCC, MITC)
Fruits (Mango)

New Star Light & C.A.D
Mango Group (Daw Than Than Swe)

8

Construction Group

1. Construction Association
2. Mandalay Green City Public Co., Ltd.

9

Textile/ training schools

1. Taw win nadi silkware
2. Mya Gabar Soe Textile
3. Mandalay Region Private school associations

10

Printing

Mandalay Region Printing and Publishing Association

11
12

Wood, plywood and furniture
Sugar

1. Sein and Mya mattress and furniture
1. Myanmar Sugar Development Public Company
2. Lamin Thazin Company Limited

13

Gems and Jewellery

1. Gems and Jewellery Entrepreneur Association

14

Hotel and Tourism

1. Mandalay Hotelier Association
2. Mandalay Tourist Guide Association
3. Mandalay Travel Association

2

Transportation

Participants of Exhibition boots

Trade Promotion

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Mandalay Investment Opportunities Survey 2015

Figure 49: H.E. U Zay Yar Aung, Chairman of Myanmar Investment Commission (MIC) andand H.E. U Ye Myint, Chief Minister, Mandalay Region Government visited booths at the
Exhibition

Figure 50: Booth at the Exhibition

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Mandalay Investment Opportunities Survey 2015

Site Visit (Optional)
A tour was planned to visit Mingalar Mandalay, Myotha industrial parks and otherdevelopment projects on 01 October 2015. A total of over 120 foreign dignitaries, investors
and local business communities joined one-day trip to these development projects.
Figure 51: Mingalar Mandalay Project

Figure 52: Myotha Industrial Park Project

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Mandalay Investment Opportunities Survey 2015

Annex
Table (1) Respondent Lists of Business interviews
Respondent
Sr. No.
SectorCompany1Company A
Hotels and Tourism
2Company B
Food Processing
3
Company C
Agriculture
4Company D
Food Processing
5Company E
Food Processing
6
Company F
Food Processing
7
Company G
Food Processing
8
Company H
Food Processing
9
Company I
Agriculture
10Company J
Manufacturing
11
Company K
SMEs
12
Company L
Food Processing
13
Company M
SMEs
14
Company N
Food Processing
15
Company O
Manufacturing
16
Company P
Trading, Logistic and warehousing
17
Company Q
Hotels and Tourism
Company R
Food Processing
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

Company S
Company T
Company U
Company V
Company W
Company X
Company Y
Company Z
Company AA

Agriculture
Agriculture
Food Processing
Hotels and Tourism
Manufacturing
Manufacturing
Manufacturing
Agriculture
Food Processing

Company AB
Company AC
Company AD
Company AE

Company AI

Trading, Logistic and warehousing
Manufacturing
Manufacturing
Infrastructure (construction
companies , Real Estate)
Manufacturing
Manufacturing
Infrastructure (construction
companies , Real Estate)
SMEs

Company AJ

SMEs

Company AF
Company AG
Company AH

Study planned by MIC and JICA and prepared by MMRD

Type of business
Hotel
Oil Mill
Agri-Machinery
wheat mill
Oil Mill
biscuitJam
Oil Mill
Agri-Machinery
Stone Crushing Machine
Tapestry
Sugar Mill
bronze statue
Drinking Water
CementLogistic Services
Hotel
Pulse and bean
Processing
Coffee Plantation
Agri-Machinery
Jerry
Tours Ship
PP Woven Bag
Iron casting
Tyre Factory
Compound Fertilizer
Pulse and bean
Processing
Cargo shipping
Iron casting
Plywood
Construction Company
Wood based industries
LatherConstruction Company
Textile (Variety of Silk
Ware)
Wood Carving
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Mandalay Investment Opportunities Survey 2015

37
38
39
40
41
42

Company AK
Company AL
Company AM
Company AN
Company A
Company A

Hotels and Tourism
Trading, Logistic and warehousing
Trading, Logistic and warehousing
Trading, Logistic and warehousing
Hotels and Tourism
Manufacturing(Myanmar Handicraft)
Travel & Tour
Cargo Transport
Trading
Cargo Transport
Travel & Tour
Machinery

Table (2) Useful Contacts
No.
1

Name
Mandalay Region Government

2

Myanmar Investment Commission
Secretariat/ Directorate ofInvestment and Company
Administration (DICA) (Yangon
Office)Myanmar Investment Commission
Secretariat/ Directorate ofInvestment and Company
Administration (DICA)(Mandalay Office)3

4

Mandalay Region Chamber ofCommerce and Industry (MRCCI)

5

Mandalay City Development
Committee (MCDC)

6

Mandalay Industrial Zone
Management Committee

Study planned by MIC and JICA and prepared by MMRD

Contact
64 Street, Between 24 and 25 Streets,
Aung Myay TharZan Township Mandalay,
MyanmarTel: +95 2 36923
Website: www.mdyregion.gov.mm
No.1 Thitsar Road, Yankin Township
Yangon, Myanmar
Tel: +95 1 657891
Fax: +95 1 657825
Website: www.dica.gov.mm
3rd Floor, Zecho East Apartments 84 Street,
Between 26 and 27 Streets, Chan Aye TharZan
Township Mandalay, Myanmar
Tel: +95 2 86661
Fax: +95 2 86660
Website: www.dica.gov.mm
4th Floor, Yadanarbon Super Center Corner of
78 and 34 Street Mandalay, Myanmar
Tel: +95 2 69326
Fax: +95 2 69311
Website: www.mrcci.org.mm
26th & 72nd St, Mandalay, Myanmar
Tel: +95 2 36170
Fax: +95 2 35928
Kanaung Hall, Pyigyitagon Township, Mandalay,
MyanmarTel: +95 2 5154656+95 2 5154673
Fax: +95 2 5154614

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