Thai businesses pulling out of Myanmar amid sluggish economy

BANGKOK: Thai business operators have been gradually moving their investments out of Myanmar as the sluggish economy in Thailand’s western neighbour, which has continued for almost four years, shows no sign of improving.

Myanmar’s economy has been on the downward trend since the Covid-19 outbreak, and was worsened by the military coup in 2021 as well as ongoing conflicts between the junta government and ethnic groups.

Thammasak Sethaudom, executive vice president of Siam Cement Group (SCG), said the company had suspended the operations of two factories in Myanmar, as well as any expansion plans in the past two years due to the political instability.

He added that SCG invested over 8 billion baht in those factories, from which some of the machines have already been stolen, as the conflict continues to rage.

“There is no hope of resuming the operation anytime soon,” he said.

“Myanmar has another cement factory in the north, owned by a Chinese company and guarded by the Chinese military. SCG could not do that and we would not risk our employees’ lives.”

Meanwhile, beverage giant Osotspa Plc (OSP) recently announced it was selling its investment in Myanmar Golden Eagle and Myanmar Golden Glass, worth 136 million baht.

OSP’s chief financial officer Ratiporn Ratcharoen said the selling of investment capital in the two Myanmar-based subsidiaries was part of the company’s strategy of strengthening its core business and selling non-core businesses. She added that the sell-off would not affect its beverage business in Myanmar.

Analysts however believed that OSP stands to lose some 800 million baht of revenue brought in by the two companies, which manufacture and sell glass bottles in Myanmar.

TPBI Public Company Limited, manufacturer of plastic and packaging products, notified the Stock Exchange of Thailand (SET) in July that its board had resolved to terminate the accounts related to TPBI & Myanmar Star Company Limited, a subsidiary which had halted operations due to economic uncertainty in Myanmar.

Event organiser Grand Prix International Plc also notified SET in November last year of the termination of GPI Myanmar Company Limited, which handled exhibition and trade fairs.

Kriangkrai Kanjanapokin, founder and CEO of Index Creative Village, said the company decided to stop its event management business in Myanmar in 2023 after nearly four years of operating in the country.

“We have no current plan to re-enter the Myanmar market. We would do so only after the situation returns to 100% normal,” he said.

Not all Thai companies are pulling out of Myanmar. Thai Beverage Plc recently reported growing revenue in its liquor business in Myanmar in the past nine months. The company bought 75% shares in Grand Royal Group, Myanmar’s largest whisky manufacturer in 2017. Thai Bev also invested over 500 million baht in a beer manufacturing factory in Myanmar.

Thai President Foods, manufacturer of ‘Mama’ instant noodles, is also staying put, reporting that its factory in Mandalay, which hires about 100 workers, is still operating. - The Nation/ANN