S'pore brand a winner in Myanmar

A walk down the streets of Yangon might give Singaporeans a sense of deja vu: Merlion symbols pop up here and there, as do some Singapore brands.

The Republic has established a strong reputation for its premium goods and services, and this is reflected in its having the most number of permitted enterprises in the once reclusive nation.

Since embarking on its road to reform, resource-rich Myanmar has lured many international suitors, from big corporations such as Coca-Cola to smaller enterprises such as Singapore confectionery chain Chewy Junior. Big or small, these business are bent on one thing - tapping one of the last virgin markets in the region.

International Enterprise (IE) Singapore's centre director for Yangon, Ng Cheong Yew, has urged Singapore firms to draw on the strong Singapore brand when pitching their business propositions.

"Companies should focus on Singapore's attributes that are renowned throughout the world - its reputation for high quality, on-time and reliable services," he said.

In Myanmar, Singapore-made products are usually perceived as premium, and sold at higher prices than back at home, he noted.

Chewy Junior, which sells sweet and savoury puffs, has opened its fourth outlet in Myanmar, in Yangon's 47th Street; it now has three franchise outlets in the city and another in Mandalay - all within a year of its foray into the country.

Its managing director, Kevin Ong, said: "We are basically one of the best brands there, so we stand out."

The winning factor

He can make that boast because Chewy Junior's pastries are still a novelty in the market. They are expensive, relative to the locally made doughnuts and breads that Myanmar consumers have long known.

Mr Ong said business opportunities in Myanmar's consumer sector abound because of the country's large, youthful population of close to 60 million. "Even with just one per cent of the upper-class population - as long as the market is not overly congested with foreign brands yet - there will still be plenty of opportunities to make money," he said.

The Singapore confectionery firm has opted to expand into overseas markets through franchising.

Myanmar-born Singaporean Maung Thet Naing Oo bought the master franchise rights to sell Chewy Junior's products in Myanmar. "I wanted something new for the people, something that they don't usually have."

Food choices for the average consumer are often limited to locally produced goods. Myanmar remains one of the last few nations where international fast-food chains and convenience stores have not set up shop.

The absence of global chains such as McDonald's and Starbucks makes Myanmar a unique market for foreign investors. Having missed out on five decades of overseas influence and competition that such brands would have brought in, Myanmar consumers have no benchmarks for comparison.

Myanmar lawyer U Mya Thein said that Myanmar people do not understand what the standard for Coca-Cola is, whether it is made in Thailand or Taiwan; they only know that the American Coca-Cola is an international brand.

The first shipment of the iconic American drink to Myanmar in 60 years has just been made.

Tapping hidden potential

Beyond the nascent consumer market, resource-rich Myanmar also has latent potential in the extractive and mining industries; 2011 official data estimates it harbours 2.1 billion barrels of oil and 25 trillion cubic feet of natural gas.

In January, the Ministry of Energy placed an advertisement in a state newspaper, calling for bids on 18 onshore blocks earmarked for petroleum exploration. IE Singapore's Mr Ng said: "When oil majors start to explore for oil, a lot of supporting services will be needed."

He sees opportunities for Singaporean companies such as SembCorp and Keppel Corp to set up shipyards; Jaya Holdings and Viking O&M could provide ancillary support by supplying vessels and equipment.

Developmentally, the country is still in early days, which will be an obstacle for companies that require a more robust infrastructure network to operate.

But engineering and construction firms, for instance, can already benefit from the plans that are underway to transform various parts of the country into industrial nodes.

The Myanmar authorities have plans to develop the Thilawa, Dawei and Kyaukpyu special economic zones, and to set up industrial estates to provide long-term economic opportunities for investors.

Singapore's TEE International, an engineering and integrated real estate group, is moving in on the opportunities available. As Myanmar undertakes more construction projects in the coming years, TEE foresees a strong demand for building materials such as cement.

Last November, the mainboard-listed firm signed a deal with Myanmar's A1 Group to build and operate a cement plant in Myanmar.

TEE's director of corporate finance & strategy, Yap Shih Chia, said cement for roads, highways, airports and buildings would be needed for the development projects, and TEE's being there would give it a "surrogate way" of participating in Myanmar's infrastructural development.

Myanmar's leaders have also turned their attention to the development of a skilled workforce to meet the needs of the industries.

Singapore-owned private school RVi Group is teaching language, but also offering corporate training programmes that cover human-resource management and leadership skills.

The school, which has been in Myanmar for almost two decades, has a strong presence in the cities of Yangon, Mandalay and Tachileik. RVi is in talks with a civil aviation training institute and hotels to provide aviation and hospitality courses in English.

"The business has widened on our side," said Argus Ang, RVi's managing director.

He added that there is an appetite for knowledge in the country as Myanmar youths are eager to learn. "I think education was, and still is, a sector that you can't really go wrong, simply because there is a great need. People here really love education."

Follow the leaders

When conducting risk assessments of a sector, precedence and certainty of existing investments are important factors, said Alroy Chan, a lawyer from Rajah & Tann's Yangon office.

Industries such as education, fast-moving consumer goods and hospitality bear lower investment risks than, say, more sensitive sectors such as mining and timber, which are heavily regulated by the state.

Foreign-owned hotels such as Yangon's Parkroyal, Traders and Sedona, set up more than a decade ago, have created a low-risk paradigm for future investments in the hospitality sector.

Mr Chan added: "It is low-risk because the likelihood of nationalisation and expropriation is low."

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