Friday, September 22, 2017

Headwinds for Myeik cold storage factories

Electricity shortages, declining fish stocks and rising labour costs are clouding the outlook for cold storage factories in southern Myanmar, industry insiders say.

In the Tanintharyi coastal region, which is not connected to the national grid, factories have to provide their own generators to ensure a reliable power supply, while fishermen are reportedly catching 60 percent less fish than they were 10 years ago.

The introduction of a K3600 minimum wage last September has also prompted some cold storage factory owners to consider cutting staff and raising productivity.

Fisheries department statistics from February indicate that there are about 16 cold storage factories operating in the Tanintharyi coastal area. They and other businesses in Myeik district do not receive a power supply from the nine local private power distribution companies, which provide only power for household use.

U Zaw Latt, manager of the Pho Thee Cho power company, said, “We distribute 3.5 megawatts in Myeik, priced at K280 per unit in February. We still don’t have power channels to supply factories, but we plan to start supplying them in May or June after negotiating over charges.”

United K.M.K opened a cold storage factory in 1998 with a capacity of 100 tonnes, which runs on diesel generators alone. General manager U Pauk said the factory could expand if the region was connected to the national grid, which provides cheaper and more reliable electricity. But the scarcity of stock due to over-fishing could be a bigger long-term problem.

“Compared to a decade ago, fish stocks have decreased by nearly 60pc. Fuel prices are low now, but if they rise again we will face difficulties,” he added.

U Win Yee, manager of Ah Saung Kaung (Mascot) industries also complained of electricity shortages and declining stocks. The company opened in 2000 with a capacity of 420 tonnes and a total freezing capacity of 32 tonnes a day. It exports fresh-frozen seawater prawns, fish, squid and crab to Malaysia, China, Hong Kong, Singapore, Japan and the European Union.

“We could make more profit if we could access reliable electricity. But to survive in this industry we need more raw supplies,” said U Win Yee, adding that an attempt to export fish meal in 2004 had failed due to a shortage of stock.

Nevertheless, the company has exceeded its US$12.75 million export target for 2015-16, he said.

Attracting workers is not a problem for cold-storage factories, though they often struggle to retain staff. The introduction of a minimum wage has made some owners consider cutting staff, said U Pauk. “It is a struggle. We could increase profits by reducing labour costs and increasing productivity. It’s harder to get started in this industry than it was a few years ago. To ensure we make a profit, we have to stay one step ahead,” he said.

U Win Yee said, “We can’t think about expanding because we spend so much time dealing with problems such as the electricity supply, declining fish stocks and rising labour costs.”

Ma Khaing Thin Phyu, 20, told The Myanmar Times she is content with her job at a dried fish factory, which pays her K125,000 a month.

“Though we get only two days off a month, I’m happy to work here with my friends,” she said.