South Korean Firms Zeroing In On Asia's Last Frontier

South Korean Firms Zeroing In On Asia's Last Frontier
South Korean President Moon Jae-in, first lady Kim Jung-sook along with Myanmar government officials pose for a photo during their visit to Shwedagon Pagoda in Yangon,Myanmar, September 4, 2019. (Photo: REUTERS/Myat Thu Kyaw)

South Korean President Moon Jae-in is touring Southeast Asia, followed by South Korean business leaders and even ranking officials who exclusively visit the reclusive country of Myanmar.

The country finally opened up to foreign investors less than a decade ago.

With Myanmar's economic potential and geographical attractiveness, South Korean businesses inked deals and partnerships.

Foreign countries find Myanmar's almost consistent annual economic growth rate of around 7 percent in recent years a good sign. 

Posco International, one of the earliest South Korean companies that went ahead with its milling processing plant since Myanmar opened, had completed a rice processing complex connecting Myanmar's main rice-producing Ayeyarwady region and Yangon Port.

This rice processing complex's annual production will be around 86,000 tons.

Together with a previous rice complex investment in a separate part of the country that turns out 15,000 tons annually, around 100,00 tons of rice will get produced and distributed by the two plants.

Posco International will export this rice to China, the Middle East, and Europe.

Posco International said Myanmar's "several uncultivated lands" and minimal use of fertilizers result in higher rice productions.

Likewise, Posco International likes its growth potential in Myanmar because the country's government is carrying out economic policies centered around its agricultural sector.

Even South Korea's major commercial banks signed several deals with Myanmar.

One of these banks is Woori Financial Group, one of the largest banks in South Korea.

It signed a memorandum of understanding with the Union of Myanmar Federation of Chambers of Commerce and Industry to help businesses in both countries wanting to penetrate each other's markets.

Both the Woori Financial Group and Myanmar Federation of Chambers of Commerce and Industry will help these businesses with the application process, financial business and investment.

Shinhan Bank, on the other hand, a commercial lender, wants to support Myanmar importers of South Korean products.

Shinhan bank is the only bank operating in Myanmar. Other lenders have offices instead.

Such a conservative arrangement still speaks of Myanmar's stage in its economy opening up to foreign investments.

The Korea Trade Insurance Corporation (KTIC) based in Myanmar, in helping the Myanmar importers, will issue export insurance through the Shinhan Bank.

Meanwhile, other heads of South Korean banks are also visiting Myanmar to look into the possibility of business expansion in the country.

The state-run Export-Import Bank of Korea also signed an agreement with Myanmar.

This $160 million deal is to help Myanmar's Finance Ministry on an Economic Development Cooperation Fund for an electronic data center and improvement in infrastructure.

Lenders' interest in Myanmar isn't surprising with the country launching its own Yangon Stock Exchange in 2015, a further sign of Asia's last frontier finally opening up.

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