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Economy

Industrial parks seek life beyond Yangon

The Myotha Industrial Park, on the outskirts of Mandalay, is building facilities to handle cargo along the Irrawaddy River.

YANGON -- Myanmar's infrastructure development push continues to gain momentum and radiate out from Yangon, the country's commercial capital. Along with roads and ports, industrial parks are cropping up with increasing frequency in core regional cities, where lower labor costs are likely to attract foreign investors. 

A river runs through it     

On a large plain on the outskirts of the northern city of Mandalay, Myanmar's second-largest city, sits the soon-to-open Myotha Industrial Park. It is run by Mandalay Myotha Industrial Development, a joint venture between local conglomerate Royal Hi-Tech Group and the Mandalay city government. Among the foreign businesses slated to move in are a Singaporean logistics company and a Taiwanese sewing company.

     Projects to improve transportation infrastructure are also underway around the 4,500-hectare site. That includes the construction of a pier and crane on the nearby Irrawaddy River, which flows north to south through the country. The crane will begin loading and unloading vessels late in February.

     Building transport infrastructure along this artery will make it possible to ship large quantities of goods between inland Myanmar and the Yangon area. A Chinese company is considering building an oil-storage facility along the waterway to capitalize on its transport potential.

     But the river is just one of Mandalay's commercial lifelines. The city is the starting point of an international highway that runs through such places as Yunnan Province in southwestern China and the northeastern Indian city of Imphal. 

     It also has air links. An ongoing project to expand and improve a road running near Mandalay International Airport could help make the Myotha park "a hub for Myanmar's border trade with China and India," said MMID chairman Aung Win Khaing.

     In Kyaukpyu, in the western state of Rakhine, a project to build a 1,000-hectare industrial complex is about to kick off. A consortium including Chinese state conglomerate Citic Group won the development rights at the end of last year. The doors are slated to open by 2025.

     Kyaukpyu is a natural port facing the Indian Ocean. The consortium plans to create facilities there capable of handling 7 million TEUs, or twenty-foot equivalent units, of cargo, per year, the most in the country. The port is ideally situated for export-minded food processors, sewing companies and other businesses looking to capitalize on the large local supply of inexpensive labor.

     In addition to attractive labor resources, there are rich oil and natural gas reserves off Kyaukpyu. Petrochemical and heavy machinery companies are expected to build facilities there in the future.

Border dreams     

In 2017, an industrial park will open in the southern town of Myawaddy, along the Thai border. The Kayin State government and other parties are building it at a time when an international road network is taking shape in the region, greatly improving transport convenience there. That network includes the East-West Economic Corridor, which is being partly funded by the Japan International Cooperation Agency.

     On the Thai side of the border, in Mae Sot, is a concentration of garment and other manufacturers. Myawaddy is seen as having excellent potential for becoming a key base for border trade between Myanmar and Thailand.

     Foreign manufacturers began building plants in Myanmar following the country's turn toward democratization in 2011, looking to take advantage of inexpensive labor.  Since 2013, modern industrial complexes, such as the Thilawa special economic zone, began to be erected, but only in the Yangon area. But rising labor costs and worker strikes have become more frequent as more foreign companies have flocked to the city.

     Now companies are looking to Mandalay and other locations where labor expenses are lower. As they push farther away from Yangon, the economic benefits will likely percolate more evenly trough the country.

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