gasworld’s Business Intelligence team provides you with an insight into the emerging industrial gas market in Myanmar.

Recently, Iwatani announced its plans to enter the Myanmar market, establishing a 100% owned local company to be incorporated in August (2015), with plans to begin preparations to start its business operations in March 2018.

Iwatani will first begin with the sale of welding equipment and materials, as well as supplying LPG. Depending upon the size of plants planned for the complex’s end-users, Iwatani will then gradually invest in the construction of filling stations and air separation plants. Ultimately, Iwatani aims to invest between ¥1.5bn to ¥2bn, including the installation and launch of at least one ASU, and has aimed for ¥1bn investment by 2020.

Myanmar lies on the west side of the Indochinese Peninsula, bordered by Thailand, China and Bangladesh, and is a market benefiting from increasing democracy and infrastructure development. The country recorded a GDP growth rate of 7.5% in 2013 and, with a population of more than 50 million, expansive geography and low-cost resource, is attracting increased investment as ‘the last frontier’ of Asia.

In 2013, gasworld Business Intelligence estimated Myanmar’s industrial gas market to have generated almost US$20 million in revenues. In 2011, Yangon Industrial Gases (YIG) was formed in partnership with Bangkok Industrial Gases (BIG). The company has recently become one of the main players in the country and will serve as Iwatani’s main competition in the area.

Currently, YIG receives all product by road from BIG, in Thailand. The return delivery journey can often take in excess of 48 hours and is heavily affected by road conditions. As a result, YIG are currently unable to provide some products due to safety regulations. The company plans to overcome this issue by building its own cylinder filling facility in the near future, and eventually production facilities to meet the rapidly growing demand from end-users.

The past and future investment from these two companies will help aid the growth of Myanmar’s industrial gas market in the near future. Foreign investment is also flowing into the country’s oil and gas sector – helped by a massive effort by the government to attract foreign investors.

Accordingly, within the 2005-2014 timeframe, gasworld Business Intelligence predicts growth from 7.2% p.a. in a low scenario to 10.1% p.a. in a high scenario. This should see the industry in Myanmar achieve revenues of between $34 million to $42 million by 2020.

 

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