CHAPTER III

BACKGROUND INFORMATION OF GLASS FACTORIES UNDER

NO. (2) HEAVY INDUSTRIAL ENTERPRISE AND
IMPLEMENTATION OF PPP.

3.1 Background of Ministry of Industry and No. (2) Heavy Industrial Enterprise

The Ministry of Industry is a ministry in the Government of Myanmar that produces

consumer products such as pharmaceuticals and foodstuffs, textiles, ceramics, paper and
chemical products, home utilities and construction materials, assorted types of vehicles, earth-
moving equipment, diesel engines, automotive parts, turbines and generators, CNC machines,
transformers, agricultural machines, rubber and tires, etc. With the aim to strengthen the
organizations and effective managements of the Ministry of Industry No. (1) and Ministry of
Industry No. (2), the Ministry of Industry was reorganized with the combination of those
Ministries since 2 December 2011.

The policies of The Ministry of Industry are:

 Establishment of an industrialized state based on modernized agriculture, with
wide development of value-added agricultural products and agro-based industries.
Emphasis is also to be given to development of small and medium enterprise
leading to establishment of heavy industries.
 Production of import substitution products and export products promotion shall be
attempted by development of small and medium enterprise leading to setting up of
heavy industries.
 Promotion of private sector and development of public-private partnership are
prioritized and invitation for co-operation in technology transfer, production
methods and investment promotion for development of industrial sector.
 Efficient utilization of available natural resources and promotion of value-added
products based on locally available natural resources.
 The Ministry of Industry is organized with two directorates, six enterprises and one
central research and development Centre as follows:
(1) Union Ministerial Office
(2) Directorate of Industrial Collaboration (DIC)
(3) Directorate of Industrial Supervision and Inspection (DISI)
(4) No. (1) Heavy Industries Enterprise (HIE-1)
(5) No. (2) Heavy Industries Enterprise (HIE-2)
(6) No. (3) Heavy Industries Enterprise (HIE-3)
(7) Myanma Pharmaceutical Industrial Enterprise (MPI)
(8) Central Research and Development Centre

3.1.1 Directorate of Industrial Collaboration

The Directorate of Industry coordinates the activities of the enterprises under the ministry
in accordance with the directions and guidelines of the ministry. It also negotiates with foreign
and local organizations for new projects, acts as representative of ministry in the activities
related to ASEAN and international organizations. Besides, it undertakes the drafting and
compilation of projects, policy and plans, financial and budget requirements, legal and personnel
matters and other affairs concerning the enterprises.

The Directorate of Industrial Collaboration is headed by the Director General and

organized with seven departments as mentioned below:
(1) Planning Department
(2) Law Department
(3) International Relation Department
(4) Finance Department
(5) Supervision Department
(6) Human Resource Department
(7) Administrative Department

There are six industrial training centres under the supervision of the Directorate of
Industrial Collaboration. They are:
 (1) No. (1) Industrial Training Centre (Sinde)
(2) No. (2) Industrial Training Centre (Mandalay)
(3) No. (3) Industrial Training Centre (Thagaya)
(4) No. (4) Industrial Training Centre (Pakokku)
(5) No. (5) Industrial Training Centre (Magway)
(6) No. (6) Industrial Training Centre (Myingyan)

3.1.2 No. (1) Heavy Industries Enterprise

No. (1) Heavy Industries Enterprise had produced various kinds of light and heavy motor
vehicles, passenger cars, truck, automotive parts, multipurpose and heavy diesel engines, earth
moving equipment, construction equipment, steel billets and pig irons. On 25 January 2011,
Myanmar Automobile and Diesel Engine Industries (MADI) and Myanmar Agricultural and
Manufacturing Industries (MAMI) were reorganized as No. (1) General Heavy Industries
Enterprise. On 4 April 2012, the name was changed to No. (1) Heavy Industries Enterprise.

On 1 April 2014, No. (1) Heavy Industries Enterprise was newly reorganized with six
heavy industries. The following industries are under the supervision of No. (1) Heavy Industries
Enterprise:
(1) No. (14) Heavy Industry (Thagaya)
(2) No. (15) Heavy Industry (Thagaya)
(3) No. (16) Heavy Industry (Sinde)
(4) No. (17) Heavy Industry (Malun)
(5) No. (1) Steel Mill (Myingyan)
(6) No. (2) Steel Mill (Pangpet)
3.1.3 No. (2) Heavy Industries Enterprise

No. (2) Heavy Industries Enterprise is responsible for producing household electrical and
electric goods, machine tools with CNC control such as lathe machines, milling machines,
grinding machines and drilling machines, PVC wire, power cables, lead acid batteries,
transformers, turbines and generators, low-power LEDs, high-power LEDs, solar, maintenance-
free batteries, different kinds of tires for transportation vehicles, passenger cars, agricultural
tractors and power tillers. In January 2011, Myanmar Machine Tools and Electrical Industries
and Myanmar Tyre and Rubber Industries were reorganised as No. (2) General Heavy Industries
Enterprise and the name was changed to No. (2) Heavy Industries Enterprise on 4 April 2012. In
April 2015, No. (2) Heavy Industries Enterprise and No. (3) Heavy Industries Enterprise were
reorganized as No. (2) Heavy Industrial Enterprise, comprising 26 factories.

The following industries are under the supervision of No. (2) Heavy Industries
Enterprise:
(1) No. (21) Heavy Industry (Thaton)
(2) No. (22) Heavy Industry (Belin)
(3) No. (23) Heavy Industry ( Nyaung Chay Htauk)
(4) No. (24) Heavy Industry (Dagon) (Solar Factory)
(5) No. (26) Heavy Industry (Thargaya)
(6) No. (31) Heavy Industry (Thayet)
(7) No. (32) Heavy Industry (Kyangin)
(8) No. (33) Heavy Industry (Kyaukse)
(9) No. (34) Heavy Industry (Thayarwaddy)
(10) No. (35) Heavy Industry (Chauk)
(11) No. (36) Heavy Industry (Kyaukse)
(12) Plastic Factory (Kyaukse)
(13) Rubber Product Factory (Thingangyun Street)
(14) Rubber Product Factory Branch (Shwe Hintha Street)
(15) Electronic Products and Electric Motor Factory (Hlaing)
(16) Dry Cell Factory (South Dagon)
(17) Oxygen Gas & Acetylene Gas Factory (South Dagon)
 (18) LED Factory (Mindama)
(19) Crumb Rubber Factory (Thanbyuzayat)
(20) Asbestos Cement Factory (Hmawbi)
(21) Marble Factory (Sakyin/Mandalay)
(22) Fire Brick (Refractory Brick) Factory( Kyaukse)
(23) Brick Factory (Danyingone)
(24) High Grade Fire Brick (Refractory Brick) Factory(Danyingone)
(25) Ceramic Product Factory (Mawlamyaing)
(26) Sheet Glass Factory(Pathein)

3.1.4 No. (3) Heavy Industries Enterprise

No. (3) Heavy Industries Enterprise was one of the leading manufacturers of ordinary
Portland cement, refractory brick, ceramic wares, high tension ceramic insulator, float glass,
agricultural machinery and equipment in Myanmar. In 1964, it was founded as the
Administration of Ceramic Corporation. The name of the corporation was changed to Ceramic
Industries Corporation in 1972 and Myanma Ceramic Industries in 1988. On 4 April 2012, the
name was changed to No. (3) Heavy Industries Enterprise.

Textile Industries (TI) has been in continuous operation since 1972, when it was
established as Textile Industries Corporation. It was renamed Myanma Textile Industries (MTI)
in 1989. The current name, Textile Industries, was adopted on 4 April 2012. Today, it is called
Textile Industries (TI) and is operated as a manufacturer of textile products by eleven main
textile factories and seven branch textile factories. TI is a leading manufacturer of textile,
clothing and apparel solely for the domestic market. Paper and Home Utilities Industries is
producing high grade pulp (paper) (BKP), high grade paper (cultural paper, coated paper),
writing and printing paper, kraft paper, cardboard paper, chemithermomechanical pulp (CTMP),
news-print paper and hydrogen peroxide, footwear products, plastic products, household
stainless steel wares, household enamel wares, hospital used steel furniture and hospital used
stainless steel wares. On 4 April 2012, Myanma Paper and Chemical Industries and Myanma
Home Utility Industries were reorganized as Paper and Home Utilities Industries.
 In April 2015, No. (2) Heavy Industries Enterprise and No. (3) Heavy Industries
Enterprise were reorganized as No. (2) Heavy Industrial Enterprise and the Textile Industries and
Paper and Home Utilities Industries were merged as No. (3) Heavy Industries Enterprise,
comprising 58 factories.

The following industries are under the supervision of No. (3) Heavy Industries
Enterprise:
(1) No. (1) Textile Factory (Shwetaung)
(2) No. (1) Textile Factory (Mayangone)
(3) No. (1) Textile Factory Branch (Mayangone)
(4) No. (2) Textile Factory (Palake)
(5) No. (3) Textile Factory (Sagaing)
(6) No. (3) Textile Factory Branch (Sagaing)
(7) No. (4) Textile Factory (Pwintphyu)
(8) No. (5) Textile Factory (Pakokku)
(9) No. (6) Textile Factory (Sarlingyi)
(10) No. (6) Textile Factory Branch (Monywa)
(11) No. (7) Textile Factory (Myitthar)
(12) No. (7) Textile Factory Branch (Wundwin)
(13) No. (8) Textile Factory (Pyawbwe)
(14) No. (8) Textile Factory Branch (Yamathin)
(15) No. (9) Textile Factory (Kyaukse)
(16) No. (9) Textile Factory (Innsein)
(17) No. (9) Textile Factory Branch (Innsein)
(18) No. (10) Textile Factory (Thaungtha)
(19) No. (10) Textile Factory Branch (Myingyan)
(20) No. (11) Textile Factory (Pakokku)
(21) No. (17) Garment Factory
(22) No. (18) Garment Factory
(23) No. (19) Garment Factory
(24) High-grade Paper Mills (Thapaung)
(25) Newsprint Paper Mill (Thapaung)
 (26) Paper Mill (Yae Ni)
(27) Paper Mill Branch (Palauk)
(28) Bicycle Factory (Kyaukse)
(29) Bicycle Factory Branch (Yangon)
(30) Packaging Factory (Amayapuya)
(31) Packaging Factory (Thanlyin)
(32) Umbrella Factory (Hlaing)
(33) Detergent Factory (Yangon)
(34) Enameled Ware Product Factory (Mayangone)
(35) Enameled Ware Product Factory Branch (Hlaing)
(36) Plastic Factory (Thanlyin)
(37) Iron Enterprise (Kyikewine)
(38) Shoe Factory (Kyaukse)
(39) Shoe Factory Branch (Phakan)
(40) Sewing Machine Factory (Kyaukse)
(41) Home Utilities Factory (Min Su)
(42) Hydrogen Peroxide Factory (Chauk)
(43) Cotton Ginning Factories (16) Nos.

3.1.5 Myanma Pharmaceutical Industrial Enterprise

Myanmar Pharmaceutical Industries and Myanmar Foodstuff Industries were combined

as the Pharmaceutical and Foodstuff Industries (PFI) on 1 August 2010. Then it was changed the
name as Myanma Pharmaceutical Industrial Enterprise, comprising 23 factories.

The factories under the supervision of Myanma Pharmaceutical Industrial Enterprise are
as follows:
(1) No. (1) Pharmaceutical Factory (Innsein/Yangon)
(2) No. (2) Pharmaceutical Factory (Innyaung)
(3) No. (3) Pharmaceutical Factory (Sagaing)
(4) Pharmaceutical Factory Branch (Hepatitis 'B' Vaccine Factory) (Ywa Tha Gyi)
 (5) No. (1) Plastic Factory (Yangon)
(6) Plastic Factory Branch (Mayangone)
(7) Plastic Factory Branch (Mhawbi)
(8) Pharmaceutical Raw Material Factory Branch (Mhawbi)
(9) Thitseint Oil Factory (Seikphyu)
(10) Horse and Sheep Breeding Farm (Heho)
(11) Zayawaddy Sugar Mill
(12) Belin Sugar Mill
(13) Diamond Beverages and Ice Mill Branch
(14) Dagon Beverages and Ice Mill
(15) Magway Beverages and Ice Mill
(16) Dauk-U Cellulose Powder Factory
(17) Soap Factory (Mandalay)
(18) Soap Factory (Yamethin)
(19) Soap Factory (Magway)
(20) Purified Drinking Water Factory Branch (Kyaukse)
(21) No. (4) Distillery (Mawlamyine)
(22) Maize Product Factory Branch (Yanpal)
(23) Industrial Used Spirit Factory (Belin)

3.1.6 Central Research and Development Centre

The Central Research and Development Centre is involved in research and development
of foods and drugs, raw materials, machinery and component parts for use by local industries.
The following divisions are under the supervision of the Central Research and Development
Centre:
(1) Foods and Drugs Research Division (Yangon)
(2) Engineering Research Division (Thagaya)
3.2 Overview of Factories under No. (2) Heavy Enterprise

In January 2011, Myanma Machine Tools and Electrical Industries and Myanma Tyre
and Rubber Industries were reorganized as General Heavy Industries Enterprise and the
name was changed to No. (2) Heavy Industries Enterprise in April, 2012. In April 2015, No.2
Heavy Industries Enterprise and No. (3) Heavy Industries Enterprise were reorganized as No.2
Heavy Industrial Enterprise. No. (2) Heavy Industrial Enterprise is manufacturing the required
tyres for various types of transportation vehicles, passenger cars, agricultural tractors and power
tillers and also manufacturing the machines and machine tools, electric and electronic products,
Hydropower turbines, Generators, Boilers, Solar-powered products, LEDs, Cement, Brick,
Ceramic, High Voltage Insulator, Low Voltage Insulator and Clear Glass .

(1) No. (21) Heavy Industry (Thaton) SOE

(2) No. (22) Heavy Industry (Belin) PPP
(3) No. (23) Heavy Industry ( Nyaung Chay Htauk) SOE
(4) No. (24) Heavy Industry (Dagon) (Solar Factory) SOE
(5) No. (26) Heavy Industry (Thargaya) SOE
(6) No. (31) Heavy Industry (Thayet) SOE
(7) No. (32) Heavy Industry (Kyangin) SOE
(8) No. (33) Heavy Industry (Kyaukse) PPP
(9) No. (34) Heavy Industry (Thayarwaddy) PPP
(10) No. (35) Heavy Industry (Chauk) PPP
(11) No. (36) Heavy Industry (Kyaukse) PPP
(12) Plastic Factory (Kyaukse) SOE
(13) Rubber Product Factory (Thingangyun Street) SOE
(14) Rubber Product Factory Branch (Shwe Hintha Street) PPP
(15) Electronic Products and Electric Motor Factory (Hlaing) PPP
(16) Dry Cell Factory (South Dagon) PPP
(17) Oxygen Gas & Acetylene Gas Factory (South Dagon) PPP
(18) LED Factory (Mindama) SOE
(19) Crumb Rubber Factory (Thanbyuzayat) PPP
 (20) Asbestos Cement Factory (Hmawbi) SOE
(21) Marble Factory (Sakyin/Mandalay) PPP
(22) Fire Brick (Refractory Brick) Factory( Kyaukse) PPP
(23) Brick Factory (Danyingone) PPP
(24) High Grade Fire Brick (Refractory Brick) Factory(Danyingone) PPP
(25) Ceramic Product Factory (Mawlamyaing) PPP
(26) Sheet Glass Factory(Pathein) SOE

3.3 Public Private Partnership (PPP) of State Owned Enterprises under the Ministry of
Industry

Ministry of Industry has been privatizing in terms of short term and long term lease and
Joint Venture practices so as to improve the private sector participation, decrease the public
sector involvement and reduce the government burden.

Table (3.1) Public Private Partnership (PPP) of State Owned Enterprises under the Ministry of
Industry
Sr. No. Description Factories
1. (1) Product Sharing 1
(2) Joint Venture 2
(3) Long Term Leasing 54
PPP Total 57
2. SOEs 56
Total 113
Source: Ministry of Industry (2020).

Among 113 industries of the Ministry of Industry, 57 are running as public private
partnership (PPP).

3.4 Procedures in Implementing PPP of Glass Factories under No. (2) Heavy Enterprise

Myanmar Investment Commission (MIC) approved US$ 23.192 million on foreign

investment and US$ 28.860 on local investment in manufacturing of glasses. According to MIC,
there is five foreign enterprise and two local enterprise registered and permitted to operate
business related to glass and several of glass’s products.

Table (3.2) Foreign Investment existing enterprises (Manufacturing of Glass)

Investment
Permitted Company Amount
No Country Type of Business Location
date Name (US$
million)
Manufacturing and
marketing of colour
Plot No. 2, 3,
coated steel, rool
Main Road,
Myanmar formed color sheet,
Pyin Ma Pin
1. 28-8-2013 Posco C & Korea (EPS panel, 13.987
Industrial Zone
C Co., Ltd. urethane panel,
Mingalardon,
glass wool panel
Tsp, Yangon
and any other
similar products
Manufacturing and
Plot No.14 and
sales of various
15, Block No.
Qingjian kinds of furniture
21, Mya Sein
(Myanmar) and construction
2. 20-8-2015 Singapore Yaung 5.105
Enterprise products made of
Industrial Zone,
Co., Ltd aluminum, glass,
Hlaing Thar Yar
metal, steel and
Tsp. Yangon
woods
Plot G-3, No. 20
Myanmar
Fabrication, process Anawyahtar
11-11- Safety Glass
3. Singapore and sale of variety Industrial Zone, 2.000
2015 Company
of glass Hlaing Thar Yar
Limited
Tsp. Yangon
Plot 4, Myay
Manufacturing, Taing Block No.
fabricating, 18, Shwe Pauk
13-11- WM Quan
4. Vietnam installation and Kan Industrial 0.600
2016 Dat Co., Ltd
sales of aluminium Zone, North
glass and façade Okkalarba Tsp.
Yangon
Plot 15, Block
City-Glass
Fabrication, No. 4, Industrial
Technology
5. 10-8-2017 China processing and sale Zone, Hlaing 1.500
Company
of variety of glass Thar Yar Tsp.
Limited
Yangon
Source: Myanmar Investment Commission (MIC) (2020).
Table (3.3) Myanmar Citizen Investment: Existing Enterprises (Manufacturing of Glass)

Investment
Permitted Name of Type of
No. Location Amount (US$
date Company Business
million)
Plot No. 30,
Mandalay
Manufacturing Industrial
Glass
1. 20-5-2000 of all kinds of Zone 2, Hlaing 1.45
Company
Glass Thar Yar Tsp.
Limited
Yangon
Manufacturing
Kyaukse
of all kinds of
International Township,
2. 27-3-2018 glass and glass 27.410
Glass Co., Ltd Mandalay
related
Region
products
Source: Myanmar Investment Commission (MIC) (2020).

Eurowindow, Vietnam’s leading supplier of doors and façades, signed its first contract in
Myanmar on 16 March 2018 with THE Integrated (Myanmar) Ltd. to supply glass walls for the
Super Hotel project in Thilawa Special Economic Zone. Eurowindow plans to invest up to $120
million in setting up two factories in Myanmar to supplement both local and regional demand.
The company generated revenues of $142 million in 2017 and aims to be the leading supplier of
doors, windows and construction products in the Southeast Asian region. The first factory, which
will have an investment of 15 - 20 million USD, is expected to start in 2019. In the meantime,
AGC Asahi Glass recently announced that it has opened a branch of AGC Asia Pacific Pte. Ltd.,
in Yangon city, Myanmar to fulfill demand.

Myanmar’s glass and glassware industry is expected to grow together with Myanmar’s
extensive development in building and infrastructure. According to the United Nations
COMTRADE, Myanmar’s imports of glass and glassware was US$ 68.3 million in 2015, US$
130.4 million in 2016, and US$ 85.8 million in 2017. China was the top glass and glassware
exporter to Myanmar in 2017, which accounted for 61 percent of total glass and glassware
imports in Myanmar. The second was Thailand, accounting for 15 percent of glass imports,
followed by Malaysia at 13 percent. The value of Myanmar’s construction sector is projected to
reach US$ 13.5 billion in 2020. Therefore, many upcoming modern construction projects are
expected to raise the demand for glass in Myanmar.

With regard to local production, the Ministry of Industry handed over a glass factory
(Than Hlyin) to the Myanmar Economic Cooperation (MEC) for commercial operations on 17
January 2011. The factory is located on the Yangon-Thilawa Terminal road, Phayagone village,
Than Hlyin Township, Yangon region. The main plant is producing glass bottles, and the daily
production is 20,000 pieces per day. The factory produces glass bottles (350 ml, 650 ml, 680 ml,
700 ml, and 24 ounces). Annual production is 7,500,000 bottles. Raw material is white sand
glass used for production of glass at the glass factory (Thanlyin), which is mainly from Ahile-
Man Island on the Tanintharyi coast.

In addition, there is also the Kyaukse Glass Factory in Kyaukse Township, Mandalay
region. Kyaukse Glass Factory was constructed by the China Construction & Agricultural
Machinery Company (CAMC), and inaugurated on 11 January 2013. The factory has a capacity
of more than 42700 tons per year, which makes it the top glass factory in Myanmar. The project
was assisted with a 30 million USD concessional loan by China EXIM Bank.

Kyaukse Glass Factory mainly produces tinted glass, clear glass, and mirrors. According
to the Ministry of Industry’s report on its one year performance in April 2017, the factory
produces glass tables incorporating Myanma lacquerware, drawings and traditional carvings, as
mass production. The aim is to retain market space for Myanma traditional arts while also using
high quality glass. Within six months of production, 20 tables were sold with prices ranging from
Ks 1 Lakh to Ks 2 Lakh depending on the designs. Further production will be carried out
according to market demand.

There are many local glass producers which play an important role in the glass and
glassware industry of Myanmar. For example, Sein Nagar Glass Factory is a family business that
has been in operation for more than 15 years. The founder saw great potential in using discarded
glass bottles bought from garbage collectors in Yangon. The melting of bottles and glass blowing
has been handed down in the company. Although the quality can be matched by mass-produced
glassware, each piece has its own unique quality.
3.5 Profile of Glass Factory (Kyaukse).

3.5.1 Brief History

According the instruction of the Head of State of that time, there had searched and found
the sample sand for the production of glass to build the Float Glass Factory in Upper Myanmar.
It had found the metamorphic crystal at Yinswae Hill near Kyaukse Factories Zone which can
use as raw material in the production of glass. Thus, there were experiments with eight drills and
there was found the deposit of 4.8 million tons according to the geological calculation (Tha-4
Grade).The Glass Factory had implemented on 5 December, 2007 by the agreement contract
with the CAMCE Co.,Ltd. The agreement had worth of 30 million dollars which had loan from
the China EXIM Bank. These included the material cost 27.657 million dollars and the technical
cost 2.343 million dollars. Located at Kyaukse in central Myanmar, this project includes the
construction of a float glass production line with a daily melting capacity of 150 tons and the
provision of three supporting deep processing lines-tempering glass, laminated glass and
silvering plate glass.

3.5.2 Objectives

The main objectives for the establishment of Kyaukse Glass Factory were:
(a) to produce high-class grade glass by utilizing domestic resources and raw
materials efficiently;
(b) to develop the production technology of modern glass;
(c) to upgrade the living standard by producing and using modern high-class grade
glass;
(d) to reduce imports and to save foreign exchange by producing high-class grade
glass in the country;
(e) to get employment opportunities for the local people with the development of the
country.
3.5.3 Location and Area

The factory located at the east of Kyaukse Town, faring 5 miles, near the Yinsew Hill,
Kyaukse Industrial Zone, Mandalay Region. It has the area of 157.01 acres.

3.5.4 Establishment Facts

The Kyaukse Glass Factory was established and operated as follows:

(a) Date of starting the project - 21.5.2009
(b) Date of Completion - 31.12.2011
(c) Date of Factory Opening - 10.1.2014
(d) Construction Company - China CAMC Engineering Co.,Ltd.
(e) PPE Rental Company - International Glass Co.,Ltd.
(f) PPE Agreement on Discussion - 16.8.2016
(g) Establishment Cost - 55822.904 million kyats