Iwatani is set to become the first overseas industrial gas company to engage in air gas production and gas related equipment in the budding Myanmar market.
Establishing a 100% owned local company to be incorporated in August (2015), Iwatani will begin preparations to start its business operations in March 2018.
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.
With the recent trend for Japanese industrial gas and equipment companies seeking growth opportunities overseas in the wider Southeast Asian market, Myanmar therefore offers strong investment potential. But the interest is two-fold, The Gas Review (TGR) notes, with the Myanmar government keen to encourage investment. President Thein Sein and Minister of National Planning and Economic Development, Kan Zaw, directly requested Iwatani Chairman Akiji Makino enter the country’s gases business when a delegation of Kansai Economic Federation paid a visit to the Myanmar Government earlier this year (February).
It’s thought that such a request confirmed Iwatani’s intentions to invest, and the company has since concluded an agreement to purchase 25,000m2 of land inside the Thilawa Special Economic Zone. A number of end-user industries are planning to set-up operations in the zone, including the food and beverages, automobile, construction and logistics industries.
TGR understands 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.
The Gas Review, Issue No. 403