Boosting a Business Presence in Myanmar

With a new direct service between China and Myanmar established by MCC Transport and Maersk Line, as well as the country’s first state-of-the-art storage facility by Damco, the Group’s presence in this emerging market is boosted.

Myanmar Boosting

After 50 years of isolation, Myanmar, with its population of 52 million, is finally experiencing political reforms, and is now regarded as the last frontier market and a strategic geographical location in Asia.

Maersk Line Myanmar gained its licence to operate in the country last year, in tandem with sister company MCC Transport, which specialises in intra-Asia trade. “Myanmar has a substantial potential for growth in terms of international trade,” said Bo Wegener, Maersk Line Thailand Managing Director (overseeing Thailand, Myanmar and Laos).

“We recognised this potential early on and this led to us opening up our own agency office in Myanmar in May 2014.”

“Current trade is mainly to other Asian countries such as China, Vietnam and Thailand, we see future potential for Myanmar’s exports to other markets such as the United States and Europe.”

Connecting Myanmar to the region
At a recently launched customer and media event in Yangon, attended by over 300 guests including government officials and the Danish ambassador, MCC Transport announced the launching of a new direct service between China and Myanmar— Intra Asia 5 (IA5). The new service will provide a direct trade link between the two countries as China is Myanmar’s biggest trading partner, accounting for an estimated 45% of all imports from Asia to Myanmar.

MCC Transport’s Chief Executive Officer Tim Wickmann says:

“Growth in imports and increased investments in the last few years have facilitated further trade between Myanmar and other Asian economies, and we expect trade volumes in Myanmar to grow significantly”.

Group Myanmar
From left: Bo Wegener, Tim Wickmann, MCC Chief Commercial Officer Naresh Potty and Maersk Line Myanmar Country Manager Dawid Sold with Maung Maung Oo, Director General of the Department of Marine Administration, Ministry of Transport. They were at a recent customer and media event in Yangon announcing the IA5 service.

What the new service means

  • Within the last two years, Maersk Line and MCC have already started establishing their presence in Myanmar through substantial investments in service expansion into the Port of Yangon. They have grown from purchasing space from other shipping lines to now operating their own dedicated two weekly and one biweekly services.
  • Myanmar businesses can use MCC’s services to reach markets within Asia, and other markets such as Europe and United States on Maersk Line’s services via the transhipment ports in Singapore and Malaysia.
  • The new IA5 service will considerably reduce the transit time from ports in China to Yangon, and also eliminates any need for transshipment of the cargo in South-East Asia. This is already in addition to two other separate services from Singapore and Malaysia to Yangon.
  • MCC Transport will deploy eight 1,100 TEU vessels on this service, which covers ports including Shanghai (China), Singapore, Port Klang (Malaysia), Sihanoukville (Cambodia), Busan (South Korea) and Ho Chi Minh City (Vietnam).

Maersk Line also presented its East-West Network to the guests, to show how it can help connect Myanmar shippers to other markets beyond MCC’s scope of intra-Asia.

Maersk Line Myanmar represents both Maersk Line and MCC Transport in the market, and the event is seen as an opportunity for both shipping lines to show how they co-operate and offer their extensive networks to facilitate growth in trade for Myanmar.

Through this and investing in strong coverage, human capital and a new office, Maersk Line and MCC Transport are intent to make a long-term commitment to Myanmar. They are among the few carriers that operate from their own office and not through a third party agent.

First spot in Myanmar logistics
Further adding to the Group’s presence in this emerging market is Damco’s new office and a freshly-minted 4,000 square metre Container Freight Station, established last year. With the facility, Damco has sealed its pioneer position in the logistics market.

Kiattichai Pitpreecha, Managing Director of the Thailand and Myanmar cluster for Damco, explains the significance:

“Over the years, Damco has assisted our customers in establishing their presence and sourcing activities in different emerging markets such as Vietnam, Cambodia, China, India, and Bangladesh. We are confident that we will be able to do the same for Myanmar.”

Types of goods stored range from garments and shoes to electronic equipment and kitchen ware, ready to be shipped to Europe and Asia, in 50 containers per week.

The state-of-the-art warehouse handles export cargo of major clients such as H&M, Adidas, Tesco, VF International and El Corte Inglés. It is the only facility in Myanmar with a loading bay and proper security systems. Apart from that, Damco also provides airfreight, ocean freight to customers in and out of Myanmar.

Tackling challenges for long-term growth
Looking to long-term growth is the key, and Damco has its sights on sustainability. According to Kiattichai, Damco has an active participation in public forums on human rights, as integrating aspects of human rights into business processes is a necessity when operating in Myanmar, with its nearly 5 decades of military rule.

Furthermore, the Group’s business units have a zero tolerance of corruption and all customers and business partners are screened in Yangon. The Myanmar office, like the rest of the Maersk Line and MCC offices worldwide, work within an anti-corruption programme which includes compulsory training and regular audits.

By increasing their business presence in Myanmar, Maersk Line, MCC Transport and Damco hope to tap into more opportunities in working with customers, suppliers and the local authorities to develop the country’s transport industry and supply chain, as well as increasing the country’s competitiveness in the international market.

Damco
Damco’s freshly-minted 4,000 square metre Container Freight Station, established last year, cements its pioneer position in the Myanmar logistics market.