YANGON — A Japan-backed special economic zone in Myanmar is expanding as an alternative production hub for China and Viet Nam, attracting growing numbers of Japanese and other foreign firms to the outskirts of Yangon.
More than half of the total developed area of 5.83 million square meters in the Thilawa Special Economic Zone is already occupied, said Tomoyasu Shimizu, president of Myanmar Japan Thilawa Development Ltd., or MJTD, the operator of the economic zone.
Since its opening in 2015, 105 companies have moved into the zone or signed tenancy contracts through last month, with 90 firms under full foreign ownership and 13 foreign-Myanmar joint ventures.
There are 54 Japanese companies in the boundaries of the zone, 15 from Thailand, eight from South Korea and six from Taiwan, according to the MJTD, a Japan-Myanmar joint public-private sector venture. The tenants are companies from a wide variety of sectors including apparel, building materials, packaging and food and beverage.
Rising labor costs and tighter environmental regulations are driving foreign companies out of China to other Asian countries such as Viet Nam and Myanmar, Shimizu said.
In fact, the Thilawa SEZ has emerged as an alternative even for Viet Nam, which is also experiencing soaring labor costs, prompting Chinese and Taiwanese exporters to the United States to “increasingly visit for on-site inspections,” he added.
The MJTD has developed Zone A of 4.05 million sq. meters and the first to third phases of Zone B with a combined land area of 2.24 million sq. meters, documents show.
Shimizu said the Thilawa SEZ is set to further expand as it is preparing to break ground on the fourth phase of Zone B with an area space of 490,000 sq. meters in 2020.