Tuesday, July 25, 2017

Funds sought for outdated factories

Foreign and domestic investors are being invited to put their money in factories lumbered with outdated equipment. The government says it has no funds to help companies buy new plants, because its priorities are education and healthcare.

Ministry of Industry assistant secretary U Myo Zar Ni Win told The Myanmar Times that loss-making factories were available for renting to Myanmar or foreign companies willing to upgrade them.

“Some loss-making factories have machinery that is 10-15 years old. Their products don’t sell in today’s markets. It’s time to upgrade. The government can’t provide funding, so we’re asking investors here and overseas to step in,” he said, adding that the ministry could help with staff retraining.

Likely investment prospects included factories building agricultural machinery, bulldozers and backhoes that were currently uncompetitive, said the assistant secretary.

Some foreign investors are showing an interest, with Japanese and United States firms coming to discuss manufacturing solar power-related products with the industry ministry. India is discussing collaboration in steel factories, but the two most likely factories, in Myingyan and Taunggyi, were still under construction, said U Myo Zarni Win.

He said consultations were expected to take time, and any agreement would be officially announced. “We are open to discussing any model. Foreign companies are invited to come and observe the factories in which they have an interest, and to assess the state of their machinery and market conditions.”

Companies interested in investing in factories run by the ministry will be expected to discuss rents, joint operating procedures, product-sharing and benefit-sharing systems.

“We will need to know what systems they will use, how many workers they will employ, how many years they will operate and with what machinery. Any contract must first be approved by the Business Affairs Committee,” said U Myo Zar Ni Win.

The committee will also consider the experience, size, staffing level, reputation and financing of any would-be applicant, following which Myanmar Investment Commission would consider authorising the deal.

Of the 63 factories owned by the industry ministry, 56 have been rented out to private companies.

Translation by Khant Lin Oo