Myanmar’s near 7% growth lures Philippines’ conglomerate
Ayala, Yoma see opportunity in Myanmar infrastructure
Myanmar can lure businesses amid U.S.-China trade war: Yoma
By Claire Jiao, Ditas B Lopez, and Faris Mokhtar
The oldest family-owned conglomerate in the Philippines is furthering its expansion in Myanmar. Ayala says it will acquire a 20-percent stake in property developer Yoma and its affiliate First Myanmar Investment for almost 240-million dollars. The heads of Ayala and Yoma discussed the deal exclusively with Bloomberg. Source: Bloomberg
The heads of Ayala and Yoma discussed the deal exclusively with Bloomberg
Ayala Corp., the Philippines’ oldest conglomerate, is placing a $237.5 million bet on Myanmar as it seeks to double the share of profit from its overseas business in the next three to five years.
“Here is a country that’s going through a tremendous transition opening itself up,” Ayala Corp. Chairman and CEO Jaime Augusto Zobel told Bloomberg Television’s Haslinda Amin in Singapore. On Thursday, his company announced it will acquire a 20% stake in Yoma Strategic Holdings Ltd. and affiliate First Myanmar Investment Public Co.
Myanmar offers an alternative destination for manufacturers relocating from China to avoid U.S. tariffs, helped by a young working population, Yoma Chairman Serge Pun said in the interview. Myanmar, like the Philippines, has a “thirst for infrastructure” and a growing consumer market that both conglomerates want to serve, Zobel said.
Ayala wants 10%-15% of profit to come from overseas in the medium term and an “overweight” investment in Myanmar is part of its regional strategy, Zobel said. The partnership could lead to more ventures in Asia, the Ayala and Yoma executives said.
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Economic growth can accelerate above 7% once it completes infrastructure projects along the China-Myanmar economic corridor, Pun said.
Myanmar’s government must do more to attract foreign investment as it faces competition from Vietnam, Cambodia, Laos and Bangladesh in luring Chinese manufacturers, Pun said.
While ASEAN will continue to build on its relations with the U.S., “all of us have to engage with China economically,” Zobel said.
Myanmar and the Philippines are both nations that are benefiting from the U.S.-China trade war, the men said
The trade war has prompted manufacturers to turn to Myanmar because it has a larger labor pool, Pun said. The Philippines, meanwhile, has benefited from the reformatting of supply chains, Zobel said
“We’re getting manufacturers coming into the country that in the past have not considered the Philippines,” Zobel said. He added that while the Philippines has strong ties to the U.S., it can’t ignore China’s economic influence
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World Bank expects Myanmar’s economic expansion to climb to 6.8% by 2021 from a forecast of 6.6% this year. Still, about a third of the population lives in poverty and the investment opportunity tends to be overshadowed by the Rohingya humanitarian crisis.
- With assistance by Anand Menon, and Adrian Wong