Sunday, August 20, 2017

Three MOI-owned factories in Yangon to cooperate with private sector

Three factories under the Ministry of Industry (MOI) in the Yangon Region will cooperate with local and international private investors after inviting Expressions of Interest (EOI), Assistant Secretary U Aung Soe Ya of the MOI told The Myanmar Times.

A cement factory in Myanmar. Approval for three other factories to cooperate with local and foreign investors is underway. The Myanmar TimesA cement factory in Myanmar. Approval for three other factories to cooperate with local and foreign investors is underway. The Myanmar Times

Out of 21 factories that invited EOIs, approval is under way for the three factories. They include a solar plant in South Dagon, a light-emitting diode (LED) factory in Min Dhamma Street and an asbestos factory in Mhawbi.

Upon the new arrangements, the asbestos factory will change its product line due to health hazards but the remaining two will continue producing their existing products. Meanwhile, the solar factory will use new technology, he said.

Applications to cooperate with investors have been submitted to the State for approval.

Out of the 115 factories under the MOI, 55 factories have been cooperating with the private sector under public-private partnerships, long-term leases or joint-ventures. Among the remaining 60 factories, some are inviting private investors to cooperate.

However, others have been suspended by the Hluttaw, which has asked the MOI to inspect several factories which have been suffering losses.

“We are currently evaluating the loss-making factories that have been suspended. Some factories will be allowed to resume operations but some will remain suspended,” U Aung Soe Ya said.

Since transitioning to an open-market economy, some state-owned factories have found it difficult to make profits, he said. “With open markets, there will be foreign investment and private firms. It is not easy for state-owned factories to compete with them,” he added.

For example, under the current government, the Kyaukse glass factory and Kyaukse fire-proof brick factory were opened to private investments for a 25-year period with options for two and five-year extensions.

Meanwhile, as many state-owned factories own valuable land, facilities and equipment and enjoy access to electricity, allowing them to cooperate with local and foreign investors would be better for the economy and create employment compared to shutting them down.

“Without letting them become useless, existing infrastructure can leveraged upon to create additional opportunities by adding more investment,” he said.