Progress With Thilawa SEZ Fuels Positive Construction Outlook
BMI View: The strong interest from foreign investors towards Myanmar's first special economic zone in Thilawa suggests that a significant increase in construction activity is set to take place. As such, there is upside to our outlook of Myanmar's construction sector, however it is significantly dependent on the success of such SEZs.
On June 16 2014, Eleven Weekly Media reported that 45 companies from 11 countries had submitted proposals to invest in the Thilawa Special Economic Zone (SEZ), the first SEZ being developed under a public-private partnership framework in Myanmar. Most of the companies are from Japan and Hong Kong, but the first company to sign a lease contract to build a factory in the SEZ is US-based beverage cans manufacturer Ball Corporation. At present, the Thilawa SEZ, a joint venture between governments and private companies from Myanmar and Japan, is scheduled to start operations in 2015, with land acquisition for the 2,400 hectares (ha) SEZ currently underway.
We believe the outlook of Myanmar's construction sector is significantly dependent on the success of the Thilawa SEZ and future SEZs (such as Dawei and Kyaukpyu). Myanmar's severe deficit in infrastructure, industrial and commercial buildings means that many of these SEZs need to be established from scratch and we believe this will result in a lot of value creation in the country's construction and infrastructure sectors.
|Myanmar-Japan Thilawa Development Company - Ownership Structure, %|