Myanmar feeds Asia trade with $8.6 billion port as U.S. ties thaw

By Daniel Ten Kate

Myanmar is developing an $8.6 billion port and industrial complex in the nation’s south intended to feed Asian demand as the U.S. and Europe lay out a path to ease sanctions in place for more than 20 years.

Italian-Thai Development Co. (ITD), the largest construction company in Thailand, completed an access road last year from the Thai border to Dawei, about 250 kilometers (155 miles) west of Bangkok. The company plans to complete financing this year for the harbor, which with the industrial zone will cover an area 16 times bigger than Thailand’s largest manufacturing park.

“What makes Dawei interesting is Myanmar itself,” said Thanet Sorat, who heads a trade facilitation body at the Federation of Thai Industries, the country’s biggest industry group. “It was closed for so long and now the government is more open. Thai companies see many opportunities there due to cheap labor costs and many natural resources.”

The Dawei initiative highlights Myanmar’s efforts to connect one of Asia’s poorest nations to a region driving global growth. Myanmar has freed political prisoners and signed a peace agreement with rebels, seeking to prompt the U.S. and the European Union to lift economic sanctions.

Italian-Thai shares, which fell 22 percent last year, are poised to recover as the Dawei project advances, Athaporn Arayasantiparb, an analyst with UOB-Kay Hian Securities (Thailand) Pcl, wrote in a report yesterday. PTT Pcl (PTT), PTT Exploration & Production Pcl, Hemaraj Land & Development Pcl and Ratchaburi Electricity Generating Holding Pcl (RATCH) are among other listed Thai companies set to benefit, he said.

‘Opening Up’

Siam Cement Pcl (SCC), Thailand’s fifth-biggest company by market value, also probably will gain assuming the project proceeds as planned, said Adithep Vanabriksha, who oversees about $4.5 billion of Thai assets for Aberdeen AssPW Human Race NMD