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MyanmarBuildingBridge ICR April 2012

MyanmarBuildingBridge ICR April 2012

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Published by U Thaung Myint
History of cement industry in Myanmar
History of cement industry in Myanmar

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Published by: U Thaung Myint on Sep 05, 2012
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05/15/2013

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INTERNATIONAL REPORT
I
Myanmar: building bridges
by Thaung Myint,Dragon Cement Co Ltd,Myanmar, & ICR Research
Mandalay is the economic hubof northern Myanmar and thesecond-largest city after Yangon
INTERNATIONAL CEMENT REVIEW
APRIL 2012
 Myanmar is in political and economic transition. The changes areopening opportunities and it is an important time for cement producers ascompetition will increase as cement demand rises. However, the need for industrial development is occurring when personal freedoms, the right to protest and environmental matters have also come to the fore.
 
INTERNATIONAL REPORT
APRIL 2012
INTERNATIONAL CEMENT REVIEW
M
yanmar is making significantstrides towards a moredemocratic society under thedirection of President Thein Sein. “Thefuture of Myanmar lies in peace andstability, while economic development isa secondary priority for the country,” saidThein Sein in January.“We are already on the chosen path todemocracy and we will continue. We arenurturing the system to have a flourishingdemocracy in the country.”Having been ruled by a military juntafor decades, the task of bringing peaceand democracy to the country is huge.The Union of Myanmar is made up of 135ethnicities of which the main groups arethe Kachin, Kayah, Kayin, Chin, Bamar,Mon, Rakhine and Shan.The total land area is 677,000km
2
andMyanmar stretches for 936km from eastto west, and 2051km north to south. Itis bordered on the north and northeastby China, on the east and southeast byLaos and Thailand, while to the souththere is the Andaman Sea and the Bayof Bengal, and to the west is Bangladeshand India (see Figure 1). China and Indiashare a border of more than 3600kmwith the country, which has an estimatedpopulation of around 54m.
The international stage
The government is seeking Singapore’sexpertise in financial management andmonetary policy to help transform itinto an international trading hub for Southeast Asia. Mr Thein Sein is lookingto encourage the US and Europe to liftfinancial and economic sanctions bywinning support from Asian nations as thenew, nominally civilian government triesto set the country on a course towardsreconciliation and democracy. In short,Myanmar is building bridges with other nations. The Philippines has already agreedto establish a trade investment promotionpanel with the first meeting in Juneand India is set to sign a trade umbrellaagreement in May.Diplomatic ties are also being forgedwith Malawi and Bhutan, while USSecretary of State Hillary Clinton wasreceived in the new capital of Naypyidawby Myanmar’s president last December inwhat has been seen as a prelude to the USlifting economic sanctions.“We welcome every foreign companythat visits Myanmar,” Mr Hla MaungShwe, vice president of the Myanmar Chamber of Commerce and Industry, saidin January. The end of sanctions would“have a huge impact on our economy,”he added.According to the International MonetaryFund (IMF), Myanmar’s GDP is estimatedto increase to 5.5 per cent in FY2011-12and six per cent in FY2012-13. The WorldBank is planning to review the country’seconomy and financial institutions. Itreports that Myanmar owes US$11.02bnin external debts, but has foreign reservesof around US$7bn.
Construction projects
One of Myanmar’s largest constructionprojects is the US$56bn Dawei deep-seaport backed by Italian-Thai DevelopmentPcl. As Myanmar’s first Special EconomicZone, it will form Southeast Asia’s largestindustrial complex, including super 
Silos at Myodaw Cement plantYCDC’s 500tpd Myodaw plant is situated inThazi townshipMandalay Cement Industries Co
 
INTERNATIONAL REPORT
INTERNATIONAL CEMENT REVIEW
APRIL 2012
highways, steel mills, power plants,shipyards, refineries, pulp and paper millsand a petrochemical factory as well as twogolf courses and a holiday resort. By theend of 2012, the developers hope to havesecured US$8.5bn to finance infrastructureand utilities up to 2014, in the first stageof the build.The Dawei port will form part of a‘super corridor’ of high-speed transportstretching to Vietnam, Cambodia andThailand. Its shipping facilities will provideaccess to the Andaman Sea and IndianOcean. Italian-Thai Development hasalready completed an access road from theThai border to Dawei, about 250km westof Bangkok.Meanwhile, the recent governmentcancellation of the Thai power coal-firedpower plant for the Dawei complex willalarm prospective international investors.“The will of the people” was given asthe official reason for the government’sdecision, but it was also said to beconcerned about the plant’s environmentalimpact. It is worth noting that, with52 per cent of the country covered byforests, Myanmar is known as the ‘ForestKingdom’.Myanmar wassimilarly set to build theMyitstone dam acrossthe Irrawaddy River in Kachin state withChinese investmentcovering most of theUS$3.6bn cost, butunder pressure fromenvironmental groupsit was cancelled by thegovernment. The damwould have been partof a network of sevento provide power toindustry in southernChina.A spectacular projectthat is likely to happenis the elevated andunderground trainsystems for Yangon.International companiesare being sought outfor the constructionof these rail projects.The city is already therecipient of a newUS$100m internationalairport built by ChinaHarbour Engineering Co Ltd.China has been keen to invest inMyanmar, but in many ways is viewedlocally as a nation more concerned withprofiteering than development. By June2010, 300km of the China-Myanmar oiland gas pipeline, running from MadayIsland in southwest Myanmar to Ruili Cityin Yunnan province in China, had been laidand by 2013 it will be completed.Even if some of these mega-projectsare facing problems, urbanisationis still expected to be encouraged.The population is mainly rural andagriculture contributes about 40 per cent of Myanmar’s GDP. In January, Mr Khin Maung Myint, union minister ofconstruction, opened the first UrbanResearch and Development Institute toassist urban planning and development.
Cement consumption
Domestic cement consumption isapproximately 5.35Mta. The Ministryof Industry has the capacity to providesome 0.65Mta and the private and semi-government sector output is around2.99Mta (see Table 1), leaving a shortfallof around 1.7Mta, which is made up byimports.
Cement production
The history of Myanmar’s cement industrycan be broken down into three phases,beginning with the establishment of thefirst plants, followed by the first major expansion of the industry and entry ofprivate investors in the second phase.Finally, there is the current situation wherefurther new entrants have established newwet- and dry-process plants and manymore projects have been outlined.
Phase 1: initial factories
At the time of British rule in then-Burma,the Indo-Burma Petroleum Co (IBPCo) found the natural gas resources atPya-ye, which is about 10km south ofThayet Myo. The same company hadalready discovered a significant limestonedeposit between Pya-ye and Thayet MyoMagwe division, so it was decided to buildMyanmar’s first cement plant to use bothnatural resources.The Burma Cement Company (BCC)was therefore founded and FLSmidth Coimplemented the project. The GBP100,000investment was situated on the west bankof Irrawaddy (Ayeyawady) River, about3km south of Thayet Myo.Work started in 1935 and the plantwas commissioned on 14 August 1937with a capacity of just 200tpd. The brandname was Horse Head, which is stillused by state plants today. After gainingindependence from Britain, Myanmar’sgovernment nationalised the plant in1954. Today, state-owned Myanmar Ceramic Industries (MCI) operates thefacility under the Ministry of Industry.Due to increasing cement demand, thegovernment decided to raise Thayet’scapacity. In 1958, the 400tpd wet-processNo 2 line was supplied and commissionedby DIA Invest Export Co from EastGermany. The plant was further expandedby a new 400tpd wet-process line supplied
Mr Thein Sein, Myanmar’s president, inspectsraw material and cement samples at theNaypyidaw plant
IndiaLaosChinaThailand
Andaman SeaBay of Bengal
MalaysiaPakistanBangladeshIndonesia
ImportsCement plant
• Mandalay• Kyaukse• Pinlaung• Naypyidaw• Thayet • Kyangin• Hpa An• DaweiYangon •
Multiple plants
622
Figure 1: location of cement plants in Myanmar and import trade from surrounding countries

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