Japanese company Daizen Myanmar will soon start construction of a logistics hub in Thilawa special economic zone (SEZ).
Thilawa, which is around an hour’s drive to the south of Yangon, is to become Myanmar’s first operational SEZ. The 2400-acre zone is jointly owned by Myanmar and Japanese public and private sector investors.
Daizen Myanmar has commissioned a company called Modair Engineering to start building the Thilawa Logistics Center next month, said Tomoaki Yabe, the company’s managing director, at the groundbreaking ceremony on September 15.
“This is not only our first overseas operation base, but will play a big role as the logistics hub connecting Myanmar and the world,” he said.
The company hopes to support the smooth and efficient flow of goods, from the procurement of raw materials to the distribution of products to consumers, covering the entire supply chain, he said.
It will offer warehousing services, freight forwarding and transportation services, processing services – such as x-ray inspection, tagging, packaging and labelling – as well as customs clearance, consulting and operations services. Mr Yabe said he chose Thilawa SEZ as the location of the company’s first ASEAN investment on the advice of representatives from Mitsubishi Corporation.
Myanmar Japan Thilawa Development (MJTD), a joint venture between Japan and Myanmar, is in charge of developing and managing the economic zone, and has been soliciting companies to set up in a 189-hectare section that comprises the first phase of the project.
MJTD is owned 49pc jointly by three major Japanese trading houses – Marubeni, Sumitomo and Mitsubishi – and the Japan International Cooperation Agency (JICA).
“They kindly gave me the opportunity to visit Thilawa SEZ in 2012,” said Mr Yabe. “It was then I felt certain that I would be able to build fruitful relationships with people here, whether for business or pleasure.”
The warehouse will be 10,000 square metres on 17,045 sq m of land. It will be located around 4 kilometres from Thilawa port and 25km from Yangon. The company is renting the land from the SEZ committee under 50-year build, operate and transfer terms, with the option to increase the commitment twice, by 10 years each time.
Daizen Myanmar will also facilitate cooperative distribution for the retail industry by setting up a “transfer logistics centre” between wholesalers and retailers, as well as cold-chain logistics for the food and beverage industry, said Mr Yabe.
The warehouse will begin operations in May 2016. It will take on clients in both the SEZ’s free zone and its promotion zone. Thilawa will comprise two zones, depending on the nature of the investment, that offer an array of incentives and tax benefits.
Daizen Myanmar has a free zone permit but will be able to allocate warehouse space for both free zone and promotion zone clients, said Mr Yabe.
Thilawa’s initial phase will be completed in 2016 and is hoped to generate 50,000 jobs.