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Foreign Investors Look To Gain A Foothold In Myanmar

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Foreign Investors Look To Gain A Foothold In Myanmar

Asia

Foreign Investors Look To Gain A Foothold In Myanmar

Foreign Investors Look To Gain A Foothold In Myanmar

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Myanmar, which used to be run by a military dictatorship, is a hot market for foreign investors. A division of a U.S. company is facing hurdles as it tries to set up a plant in Myanmar.

RENEE MONTAGNE, HOST:

And the complicated electoral process in Myanmar continued to unfold today. Its parliament announced the timeline for choosing a president, which still hasn't been done since last year's elections. That former military dictatorship has been opening up since 2011. Investors, like Coca-Cola, are eager to reach an untouched market of more than 50 million people. Naomi Gingold has the story of an American can and tin manufacturing company, by the name of Ball, in Myanmar.

NAOMI GINGOLD, BYLINE: On the outskirts of Yangon sits an enormous squat factory.

MIN THA LA NYUN: That one. The white building. So that is Ball plant. Our site.

GINGOLD: It's still being built. The country manager, Min Tha La Nyun, is showing me around.

NYUN: We are the first can manufacturing plant in Myanmar.

GINGOLD: And one of the largest can manufacturers in the world. In 2012, the military dictatorship started taking tentative steps towards democracy. The U.S. eased sanctions. And for the first time in years, American companies got the green light to do business here. Coke decided to go in and asked Ball, a longtime partner, if they'd join. Ball said yes, but it hasn't been easy. Challenge number one - the rules. For years, Myanmar's economy was dominated by the military and their cronies. In 2012, even after the government passed a new law in foreign investment...

GIHAN ATAPATTU: We were kind of going through the dark and feeling our way out. But then, when you really come down to trying to figure it out, there was no rule.

GINGOLD: That's Gihan Atapattu, the president of Ball Asia. He spearheaded the company's move into Myanmar in 2012.

ATAPATTU: Parliament was meeting all the time to try to establish new regulations. Does that mean we need to wait for those? So we were continuously in this flux.

GINGOLD: The lack of clear rules also made their next challenge harder - finding land. For example, in one case, they asked one potential seller where they could put treated wastewater, and...

ATAPATTU: He pointed to a lovely river that children were playing in and people were fishing and said, there you go, don't worry. And we said, no, we can't do that, you know? We absolutely cannot do that.

GINGOLD: Or they found land but often without basic infrastructure, like power or water. Atapattu says the breakthrough was finding this new special economic zone.

ATAPATTU: There was a one-stop shop, and it said, here's the rules. And that just made it a lot easier.

GINGOLD: Ball signed the lease. It's where the factory is being built. But they didn't realize they had stumbled onto another legacy of the military dictatorship - land grabs. Displaced farmers where claiming that they hadn't been properly compensated or had been forced to sign over land. Ball took the lead in bringing people together to find solutions and now even employ some farmers on their construction site. And that brings us to challenge number three - manpower. Myanmar's military junta gutted the education system, so finding qualified people was hard. Ball recruited heavily among Burmese working abroad and ran a lot of trainings on everything from how to run machinery to basic things like wearing a hard hat in a construction zone. And then...

ATAPATTU: There was huge sensitivity around the sanctions. What does that really mean to an American company? So we had to do a lot of due diligence and understanding what was out of bounds and what we were allowed to do.

GINGOLD: Atapattu spent time shuttling to D.C., talking to the government. Ball investigated every single person that they might do business with, also looking down the line to every person that person did business with.

CHRIS TUN: The cost of doing business is still expensive. And the ease of doing business is also not that easy.

GINGOLD: Chris Tun heads the Myanmar office of the consulting firm Deloitte. He says Ball's experiences are pretty common, but things are improving. In 2014, Myanmar ranked last in the world in terms of ease of doing business. In 2015, the country shot up 20 places in the World Bank Index. Then, last November, Aung San Suu Kyi’s democracy party won elections in a landslide. If the transition continues to go smoothly, it could lead to the lifting of all sanctions. That'd be a big deal for business. Tun says if you're a big company that can take some risk, Myanmar is a hot market. But there are big hurdles. There is still no modern banking system. Getting decent broadband Internet is really expensive. Come spring, though, people here...

(SOUNDBITE OF CAN OPENING)

GINGOLD: ...Should be able to enjoy a drink from a locally produced American can. And maybe someday Myanmar products will show up on American shores. For NPR News, I am Naomi Gingold in Yangon.

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