Electrical industry of burma/myanmar

ELECTRICITY SUPPLY KEY TO INDUSTRY SHIFT TO MYANMAR

Ye Lwin, Myanmar Times, 16/08/10. Edited. http://mmtimes.com/2010/business/536/biz003.html

Rising wages in China have removed some of the lustre from the Pearl River delta of the PRC for foreign manufacturers. But if Myanmar wants to pick up the slack, it has to improve its infrastructure, industry sources said last week. Hideki Arai of Asahi Kasei Trading Company, said China was the main manufacturing base for Japanese textile and clothing makers. But the business environment there has changed for the worse, and many companies are looking to move elsewhere, seeing major potential in ASEAN countries.
Mr Eitaro Kojima, managing director of Japan External Trade Organization’s (JETRO) Yangon office, said Japan has an umbrella free trade deal with ASEAN – the ASEAN-Japan Comprehensive Economic Partnership – and several bilateral deals already in place, which leaves the region in a good position to benefit from China’s loss. U Myint Soe, president of the Myanmar Garment Manufacturers Association (MGMA), pointed to Myanmar’s large and relatively inexpensive labour pool as one of the country’s potential attractions to lure Japanese investment. “But we need to enhance our workers’ capacity-building as the Japanese market is sensitive in terms of quality control,” U Myint Soe said.
Mr Kojima said Myanmar stood to gain new investment if it improved its operating environment, but warned that regional competitors like Bangladesh, Cambodia and Laos had similar advantages and more attractive operating climates. “For the time being, clothing exports from Myanmar to Japan are larger than those from Bangladesh to Japan,” Mr Kojima said.
U Myint Soe said statistics from the Myanmar Garment Manufacturers’ Association show clothing exports to Japan have been rising for the past five years, from US$53 million worth in 2005, to $71 million in 2006, $96 million in 2007, $133 million in 2008 and $149 million in 2009. But Mr Kojima said Bangladesh would soon overtake Myanmar because new factories are already being built there. Bangladesh also produces its own fabric, while Myanmar has to import virtually all the raw materials. “I expect that exports from Bangladesh to Japan will overtake those from Myanmar because there are more Japanese factories on the ground there,” he said.
“At the moment, I am not sure how many new Japanese-financed factories are on their way in Bangladesh. But I can say there are no new factories planned for Myanmar, only orders. But new suppliers and buyers are looking for suitable factories here,” Mr Kojima said. “If private factories here can set up new lines and provide clothing of a certain quality then I think more opportunities will arrive.”
There are only four wholly Japanese-owned factories in Myanmar, with another 20 or so working to supply the Japanese market, U Myint Soe said. He added that while labour costs are relatively low in Myanmar compared with other Asian countries, potential investors are wary of the challenges posed by unreliable electricity supply, substandard infrastructure and other logistical hurdles. “Regular electricity supply is the most important consideration for Japanese companies contemplating investing here,” Mr Kojima said.
Additional references
See above: ‘Additional gas-fired power plants to be built in Yangon’ (MT: 05/12/11)

‘Improved power supply brings better business climate to most’ (MT: 06/06/11)

See below: 'Reliable electricity supply gives advantage to Thai shrimp farmers' (MT: 13/08/07)

‘Impact of unreliable power supply on industrialization in Myanmar’ (IDE: 10/05)

Edge Financial Daily, 08/02/12.
Myanmar's power supply infrastructure is aged and electricity interruption is often cited as a stumbling block for manufacturing. But according to Templeton Emerging Markets Group exectguive chairman Mark Mobius, the biggest barriers holding back investment in the country are lack of a proper letal structure, a well-developed banking system and foreign exchange operations. But some Malaysian companies have made their way to the country in recent years. They include electrical goods manufacturer Khind Holdings Bhd, Tan Chong Motor Holdings Bhd and Pansonic Holdings Bhd.
NLM, 15/01/12. Edited. http://www.burmalibrary.org/docs12/NLM2012-01-15.pdf

A meeting on economic and industrial cooperation between Myanmar and Japan took place at the Ministry of National Planning and Economic Development on 14/01/12. It was attended by the Minister for National Planning and Economic Development U Tin Naing Thein and officials, the president of the Union of Myanmar Federation of Chambers of Commerce and Industry and officials, the Minister of Economy, Trade and Industry Yukio Edano of Japan, representatives from NEDO, JETRO, Japan Oil, Gas and Metals National Corporation, Nippon Export and Investment Insurance, Keidanren Co, Japan Federation of Chambers of Commerce and Industry and business people. At the meeting, the participants discussed economic and industrial cooperation between the two countries, co-operation in development of infrastructures, further development of the economic environment, promotion of trade and investment, co-operation in energy, minerals and natural resources. After that, an MoU on investment co-operation was signed between the Directorate of Investment and Companies Administration and JETRO-Yangon, and an MoU on renewable energy and environmental conservation was signed between Myanmar Rural Area Energy Development Committee and NEDO. According to participating experts, Myanmar’s economy is expected to experience development in coming years profited by Japanese companies’ investment in infrastructural, economic and industrial sectors.

Kyodo, 13/01/12. Excerpt. http://www.japantimes.co.jp/text/nn20120113a9.html

Japan’s Trade minister Yukio Edano visited Myanmar democracy icon Aung San Suu Kyi in Yangon on 12/01/12 and conveyed Japan's readiness to support the country's economy to assist its fledgling democratization process. "Stabilizing the economy can improve the life of the citizens. . . .We hope to cooperate (to that end)," Edano told Suu Kyi at her home. Japan plans to help Myanmar improve its electric power system and other infrastructure, as well as to expand bilateral trade.

Kiyohide Inada, Asahi Shinbun, 04/06/11. Excerpt. http://www.asahi.com/english/TKY201106030150.html

Japanese companies are looking at Laos as an alternative production base to fast-growing Asian economies where wages are rising, while South Korean businesses are investing in the country to cultivate a promising market. Japanese direct investments have gradually increased in recent years. Last year, there were 65 Japanese-affiliated companies, up from 40 five years ago, according to the Japanese Embassy in Vientiane. The companies include many apparel makers and electronic parts makers in addition to companies involved in mining and hydropower generation. The manufacturers are diversifying their overseas production bases partly because labor costs have increased in emerging economies such as China and Thailand. Shirt maker Yamaki Co. set up a factory in Vientiane in 2005 because wage levels were expected to rise in Thailand, where it had been operating a plant since 1989. The minimum wage is equivalent to about 5,300 yen ($65) a month, less than half of those in China and Thailand. About 300 people work at the factory. The company had considered setting up shop in Cambodia or Myanmar (Burma) but decided on Laos due to its ample electricity supply and political stability. "It is easy to transfer the know-how accumulated at our Thai plant (because the two languages use similar words)," said Hidehiro Omori, manager of the factory. Almost all the products are shipped to Japan for sales at supermarket stores and mens' clothing shops. Yamaki plans to produce 900,000 shirts in fiscal 2011, up 50 percent from the previous year.

NLM, 15/03/11. http://www.burmalibrary.org/docs11/NLM2011-03-15.pdf

At the regular session of the Amotha Hluttaw on 14/03/11, Industry Minister-1 Minister Aung Thaung replied to a question from U Maung Aye Tun of Rakhine Constituency-9 as to whether or not there was a plan to build a pulp factory in Buthidaung township where there is an abundance of bamboo growing naturally. U Aung Thaung said that Saidin bamboo forest in Buthidaung and Ponnagyun regions can be used to produce raw materials for a factory with a production capacity from 200 to 500 tons of pulp a day. But the establishment of a pulp factory requires chemical and chlorine dioxide plants, a generator and boiler plant, a cooking and digesting plant, a pulp sheet making plant and a recovery plant. Inputs to the plants are from about 0.3 to 0.75 million tons of bamboo per year, from 20 to 50 megawatts of electricity, from 30,000 to 75,000 tons of limestone, from 90,000 to 300,000 tons of salt and from 10 to 25 million gallons of water a day. Only if these inputs are fulfilled can the pulp factory be built. Lack of sufficient electricity supply at the present time, capital and technical problems hindered to build the factory. Although five field trips were made with the participation of foreign companies, progress could not be made due to electricity supply, energy and other problems. Nevertheless, there were future prospects for the energy sector in Rakhine State and good prospects for the establishment of a pulp factory by local organizations and foreign investors.

Myo Maung, Irrawaddy, 10/09/10. Excerpt. Edited. http://www.irrawaddy.org/article.php?art_id=19436

Burmese entrepreneurs have raised concerns that they will be unable to compete with tax-exempt imports from other countries in the region when the Asean Free Trade Agreement (AFTA) goes into effective in 2015. The goal of AFTA is to increase Asean countries' competitive edge as a production base in world markets through the elimination, within Asean member-states, of tariff and non-tariff barriers, in order to attract more foreign direct investment to Asean. Burma became a signatory of the AFTA agreement in 1997.

Business owners in an industrial zone in Rangoon said unnecessary production costs under the military regime and a poor economic infrastructure have made it difficult for businessmen even to keep their enterprises. “The AFTA will come later but don't talk about foreign products now. At the moment, we can hardly compete with each other in the country,” said a businessman. Another businessman said, “Just give us electricity and techniques.”
Financial Express (Bangladesh), 02/09/10. Edited and condensed.

http://www.thefinancialexpress-bd.com/more.php?news_id=110954&date=2010-09-02

A high-powered Bangladesh delegation received Burma's consent over cross-border electricity trade during its recent visit to the country, according to a senior power ministry official. The agreement is aimed at exporting around 575 megawatts of electricity. A Burmese delegation is expected to visit Dhaka shortly to sign an MoU on the electricity trade between the two countries. Before finalizing the deal, Burma has sought a power purchase guarantee from Bangladesh, said the official who was a member of the delegation that visited Burma last week. The delegation included top officials from the power ministry and Power Development Board (PDB). The power plants with an electricity generating capacity of 500MW and 75MW will be installed on the Lemro and Michaung rivers. Burma’s Shwe Taung Development company has already tied up with a Chinese firm to build these power plants with a view to exporting the output to Bangladesh. It has already secured a land lease in Rakhine state to set up the power plants.

Bangladesh is currently reeling under an acute electricity and gas crisis with electricity generation hovering around 4200MW against demand of over 6000MW and gas output at around 1980 million cubic feet per day (mmcfd) against the demand of over 2300 mmcfd. Operations at four major gas guzzling fertiliser factories have been closed down to make room for generating more electricity at gas-based power plants as more than 80pc of the country's power plants are based on gas. Compressed natural gas (CNG) filling stations have been ordered to close down for six hours daily to ensure smooth gas supplies to power plants. Holiday staggering in industries is continuing and there is a halt to new connections both for natural gas and electricity. The country's hectic economic activities have sky-rocketed energy demands over the past two years. The government has targeted to produce additional 10,000MW electricity by 2014.
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Alfred Oehlers, IRROL, 22/08/07. [excerpt] http://www.irrawaddy.org/article.php?art_id=8318

Burma is essentially a diesel-powered economy. We see this in the buses, trains and trucks that rumble around the country. We also see this in the dilapidated power plants that sometimes generate electricity. Most of all, we see this in the ubiquitous portable generators that exist in nearly every home, factory and shop that can afford one. For a long time now, diesel prices have been kept artificially low through subsidies. But as demand for diesel has continued to grow in tandem with an expanding economy, the amount spent on these subsidies has similarly expanded, posing an ever increasing strain on the regime’s finances. The only solution has been to import diesel, since Burma’s ageing refineries simply cannot refine crude volumes sufficient to meet demand. And as this is usually done at spot market prices, it is an extremely costly solution.

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AGREEMENT SIGNED ON NGAWCHANHKA HYDROPOWER PROJECT

NLM, 25/07/10. Edited and revised. http://www.burmalibrary.org/docs09/NLM2010-07-25.pdf

The Hydropower Planning Department has signed a Memorandum of Agreement on implementing a hydropower project on the Ngawchanhka river in Kachin state. The project will be undertaken by Yunnan’s International Energy Cooperation & Development Co Ltd (YEDC) and Mynamar’s International Group of Entrepreneurs Co Ltd (IGE). YEDC is a subsidiary of the Yunnan Power Investment Company (YPIC).
The agreement, which was inked in the Ministry’s Yeywa Hall in Nay Pyi Taw on 23/07/10, was signed by

D-G Kyee Soe of the Hydropower Planning Dept, by Duan Wenquan, president of YEDC, and by Chairman U Nay Aung of IGE.

Also present for the signing ceremony were Myanmar government ministers and officials as well as Chairman Bao Minghu of the Yunnan Provincial Investment Holding Group Co (YIHG). Earlier in the day EPM-1 Zaw Min held discussions with Chairman Bao on the Ngawchanhka project.
The Ngawchanhka Hydropower Project, which is estimated to generate 1055 MW, will be implemented in five phases on Ngawchanhka River in Kachin State.
Website references
The Yunnan [Provincial] Investment Group (YIHG) is described as a state-owned company engaged in investments in power generation and resource-based industries, typically through issuing project-related bonds. For instance, among the ventures funded by YPIC in 2009 was an international mining industry trade center in Kunming, reportedly aimed at promoting co-operation with the mining sectors of Laos, Vietnam and Myanmar. Speaking at the opening of the centre Bao Minghu, board chairman of YPIC, said it was imperative to build an international institution focusing on consulting, information release and trading services for mineral products in the region. The lack of such a centre for mineral product trading and a related fund-raising platform was a real bottleneck for the further development of the Yunnan mining industry. See, for example, the following references:

http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&NewsID=18314

http://www.chinadaily.com.cn/bizchina/2009-09/07/content_8663394.htm

http://jiakr.com/article?u=asia-39-s-biggest-solar-power-station-settled-in-yunnan-map&v=3
Stretching to the north of the Hpimaw [Pianma] area where the Ngawchanhka rises, the Gaoligongshan mountains on both sides of the Yunnan – Kachin border are reported to “exceptionally rich in a wide variety of minerals”. “In Pianma discoveries of molybdenum have attracted the interest of mining companies that built processing facilities in the town. The 2% quality of the ore is reportedly higher than anywhere else in China and it is expected that Pianma will become a major source of the mineral for China.” On 05/05/10, the Kachin News Group, citing local sources, reported that 16 Chinese miners had been killed and 20 injured as a result of a landslide triggered by explosives at one of the moly mines on the Kachin side of the border. The news agency said there were hundred of miners from the Chinese side working at mines in the area. Lead, graphite, gold and zinc are also found there. See the following references:

http://www.globalwitness.org/media_library_detail.php/113/en/a_conflict_of_interest_english, p 104.

http://www.kachinnews.com/news/1550-sixteen-chinese-miners-killed-in-molybdenum-mine-collapse-in-northern-burma.html
Topographical map references

China 1:250,000: Series L 500, NG 47-10: T’eng Ch’ung

http://www.lib.utexas.edu/maps/ams/china/txu-oclc-10552568-ng47-10.jpg

China 1:250,000: Series L 500, NG 47-06: Fu Kung

http://www.lib.utexas.edu/maps/ams/china/txu-oclc-10552568-ng47-6.jpg

The Ngaw Chang Hka is a major tributary of the N’maihka. It rises in the height of land (3800 m) along the Yunnan – Kachin border near Hpimaw (26°01' N, 98°37' E) and flows down rapidly ESE, then circles around and flows in a northerly direction entering the N’maihka near Hpyikrang (26°18' N, 98° 18' E). Existing east – west and north – south logging roads along the valley of Ngaw Chang Hka should make it accessible for hydropower development.

Additional references
Data summary: Ngaw Chang
NLM, 24/09/10. http://www.burmalibrary.org/docs09/NLM2010-09-24.pdf

EPM-1 Zaw Min meets with V-P Zhang Xiaolu and Chief Engineer Xia Zhong of China Power Investment Corp (CPI) and GM Li Guanghua and party of CPI Yunnan International Power Investment Co Ltd (YPIC) of the PRC. They focus on joint implementation of hydropower projects.

NLM, 21/07/10. http://www.burmalibrary.org/docs09/NLM2010-07-21.pdf

The five projects along the Ngawchankha were named in a list of hydropower projects in Myanmar. They are as follows: Kulant (100 MW), Wukyonkye (60 MW), Kankan (140 MW), Htonshin Creek (320 MW) and Laungdin (435 MW). [The easiest to identify from this list are Htonshin Creek (Htawmshing: 26° 02' N, 98° 27' E), Laungdin (Lawngte: 26° 06' N, 98° 20' E) and Kankan (Hkamkawn: 26° 02' N, 98° 25' E). Wukyonkye could be either Wakyang: (25° 56' N, 98° 22' E) or Wachutaing: (25° 59' N, 98° 24' E). Kulant is not listed among the villages of either Tsawlaw or Chipwi townships and is not visible on the U.S Army topo maps.]

Economic and Commercial Counsellor's Office of the Chinese Embassy in Myanmar, 27/02/09.

http://mm.mofcom.gov.cn/aarticle/todayheader/200903/20090306072591.html

On February 26, 2009, Yunnan Power Investment Corporation's (YPIC) International Energy Cooperation and Development Co and Myanmar’s EPM-1’s Dept of Hydropower Implementation (DHIP) signed an MoU for the joint development of Ngaw Chang Hka hydropower project. President Xia Yuan-Ming of YPIC and Director Win Kyi of DHIP signed on behalf of either side. Among those attending the signing were the

Tang Hai, Economic and Commercial Counsellor of the PRC in Myanmar and colleagues, representatives of

of the Yunnan Provincial Dept of Commerce, the Yunnan Provincial Investment Holding Group Co Ltd, the Yunnan Power Investment Corp and officials of Myanmar’s EPM-1 and EPM-2 and the Ministry of Justice. A four-cascade hydropower development is planned, with a total installed capacity of 1,050 MW

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BORDER TOWNS UNHAPPY WITH POWER SUPPLY FROM SHWELI-1

Sai Zom Hseng, IRROL, 22/07/10. Edited and revised. http://www.irrawaddy.org/article.php?art_id=19032

Since the border towns of Muse, Nam Kham and Pang Sang in Shan State north were switched to receiving electricity from the Shweli hydro-power project, service has become increasingly unreliable. Previously electric power for the three towns was provided from across the border in China. Service from China had been available for twenty years up until April of this year. “Electrical power is essential for our work,” said a Muse businessman, who asked for anonymity. “If we can't depend on the electricity, it's really frustrating for both employers and workers. We can't work in a productive way.”
The electricity supplied from China, was also much cheaper. The owner of a manufacturing plant said: “We didn't have to pay a power meter box maintenance fee when we used electricity from China, but now have to pay many different fees for the Shweli electricity, and we receive irregular service. We use it because we are forced to.” In the beginning, locals had to pay electricity fees in Chinese currency, but they will begin paying in kyat this month. Residents in Muse, Nam Kham and Pang Sang have been charged two yuan (US $0.29) for a unit [per kWh] of electricity from the Shweli project. The fee for a unit of electricity from China was 1.2 yuan.
Locals in Lashio said electricity transmission lines are under construction between Lashio and Mandalay. They said people in many parts of Lashio use Shweli electricity, but they do so by choice. According to one Lashio resident, people there can pay electricity fees with Burmese currency. "The regime's Myanma Electric Power Enterprise (MEPE) controls electricity from both China and Shweli. Edible oil factories here continue using the Chinese electricity because the Shweli electricity is more expensive.”
Additional references
See below: ‘Shweli-1 hydropower plant officially inaugurated’ (NLM: 17/05/09)

'Shweli transmission line contract Signed’ (People/s Daily Online: 10/10/03)

Phyu Nu, Eleven Media, Translation and editing by Win Htut, Undated (probably second week of September 2011). Edited and abridged. http://eversion.news-eleven.com/index.php?option=com_content&view=article&id=1478:myanmar-borders-purchasing-electricity-from-china-and-thailand&catid=43:biweekly-eleven-eversion&Itemid=110

Residents in some border areas of Myanmar are buying and using electricity from China and Thailand. Among the towns buying power from China are Lweje in Kachin state and Chinshwehaw, Mongkoe, Manhiroe, Hopang, Nantphatka, Khomone, Mongyulay, Kunlon, Laukkai, Muse, Namhkham and Kyukok in Shan State North. Towns buying power from Thailand are Tachilek in Shan State East and Myawady and Phayathonesu [Three Pagoda] in Kayin State. The power that is bought from neighboring countries has to be supplied to the border areas by 12 power supply committees, it was learnt. “One unit power costs K 120. The power is generated from the Shweli Hydropower Project on the Shweli River”, said a local from Muse.

Shweli Hydropower Plant is the joint venture plant built by the state and foreign investment. It is purchased through Chinese yuan and being supplied to Muse, Nanhkham and Kyukok, it was learnt.
High and Dry: The cross-boundary impacts of China’s Longjiang dam (Shan Women’s Action Network, Shan Sapawa Environmental Organisation, December 2010, 24pp)

http://www.shanwomen.org/pdf/high&dry_Eng.pdf

This report prepared by two grass roots community organizations analyzes the impact of the sudden surges in the level of the Mao (Shweli) river which resulted from the construction of the Longjiang dam on the upper reaches of the river in Yunnan. Many villagers along the Mao valley between Muse and Namkham depend on the local longboat trade between the countries for their livelihood and this was severely affected as the reservoir behind the Longjiang dam was filled in 2009 and the first half of 2010. The report briefly mentions the Shweli-1 dam and power station, also located on the Mao (Shweli) river about 30 km below the Mao valley but there is no mention of how surges in the Mao may have affected the level of the reservoir at Shweli-1 and the generation of electricity at the power plant there. Also omitted from consideration in High and Dry is any mention of the drought in southern Yunnan in the latter part of 2009 and the early months of 2010. The best of part of this report is the picture it paints of rural life in the valley of the Mao and the fine set of photographs that illustrate the text.

Shan Herald, 14/07/10. Edited and condensed.

http://www.shanland.org/index.php?option=com_content&view=article&id=3101:border-people-paying-high-for-homegrown-electricity&catid=90:environment&Itemid=287

People in Muse and Namkham townships complain that they are still being asked to pay the same charges as when they were using electricity from across the border in China even though they are now receiving it from the Shweli hydropower plant inside Burma. The changeover to the Shweli plant took place in April. They are being charged between Yuan 1.4 - 1.6 per unit ($ 0.21 - 0.23 per kWh). Moreover, they say the power supply is quite irregular and some days they don't get any electricity at all. The problem may be in the meter boxes which are unable to read the unit measurement, said a source. “The people are unaware of how much the charges really are. So, they have to pay what the authorities say,” he added.

Ta’ang Students and Youth Organization, 25/05/10. Edited. See note below.

http://www.palaungland.org/2010/05/25/authorities-putting-security-in-place-around-ruili-electric-power-a-cause-of-community-discontent/

When the people of Namkham township used to get electricity from China the power connection was good. But since the power has been supplied from Myanmar Ruili, there have been frequent power shortages. Nevertheless, the people still have to pay for the electricity and they are not definitely not happy about the situation. "Since we changed the electric meter box, we do not get the electricity regularly. Even if we don't get power, we have to pay one thousand [kyat?] for meter box maintenance, so people in the community people are really unhappy about the change in the supply of electricity. During the Myanmar water festival, we did not have any electricity and the Kaung Tak villagers went and argued with electrical office. So, they put everybody at the Ruili dam on security alert because they were afraid that local people would cause damage at the Ruili dam,” said a woman who lives in Namkham township. “Some villages told the township power office they wanted a refund of their meter box fee and some did get one third of their money back, but others didn't, so they are discontented,” she said. A guard at the Ruili power station said that there had been a lot of explosions during the water festival in the third week of April and that authorities at the power station were worried that people who were unhappy might take advantage of the situation to detonate something at the Ruili dam. [Compiler's note: This story has been drastically edited and revised. The original is available at the website cited above. The references to ‘Ruili’ have been retained but they are almost certainly wrong. Ruili is a city across the border from Muse in China. The journalist who reported this story probably misheard what the source was saying. The 'Ruili dam' should be read as referring to to the 'Shweli dam' that is now supplying electric power, however irregularly, to Namkham and Muse.]

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