Gunkul optimistic on changing Burma

Zeya Thura Mon, managing director of Zaya & AssociatioCo –Gunkul’s sales representative office in Burma – said the Burmese government is expected to spend massively on the country's development, especially on electricity, oil, and gas as well as telecom business. This is expected to lead to significant economic growth each year.
Gunkul Dhumrongpiyawut, executive chairman of Gunkul Engineering, said he expected economic changes in Burma in the next three to five years as the country is now welcoming more investment in the power sector.
Power consumption in Burma has been low. In Rangoon, which has a population of 8 million, the consumption is less than 1,000 megawatts.
Last week, Gunkul announced that it might launch a joint venture with the Electricity Generating Authority of Thailand (Egat), the Provincial Electricity Authority (PEA), and foreign investors to develop its wind-power project in Burma worth Bt60 billion. The company last month signed a memorandum of understanding with Burma’s government for the project with a capacity of 1,000MW for export to Thailand.
The company will conduct a feasibility study for six months after the signing of the MoU and take another six months to install the wind turbines to measure the wind currents. The statistics will be collected for one year before beginning plant construction. The project is expected to produce electricity within three years.
The company will set up a joint venture to carry out the project, in which it intends to own between 10 and 20 per cent, while Burma’s government will own 10 per cent. It will woo possible partners to hold the rest of the shares.
Gunkul said that Burma’s permit to his company to invest in the wind-power project reflects one aspect of the country’s development. He believes that Burma would also promote investment and business expansion in many more fronts, which will provide more business opportunities for Gunkul.
He added that Gunkul has had trading relations with Burma for 15 years, which has won it the trust of the government and that is why it was selected to develop this wind power project in the country.
The company’s business in Burma faced difficulties during the first five years before it started to break even in the 10th year.
One of the contributors to this success is its partnership with Zaya & AssociatioCo, which provides power systems, oil and gas products and service provisions, Fresh air-conditioning systems, renewable energy and trading in Burma.
Gunkul has three sales representative offices in Burma. Its revenue from Burma accounts for 50 per cent of its total revenue.
The revenue contribution from Burma is expected to reach between Bt1.25 billion to Bt1.30 billion this year, of which Bt1.125 billion were achieved during the first nine months. The company has also projected 25-per-cent revenue growth in Burma next year.
However, Burma’s gradual opening of the country has also led to greater competition as more companies are coming in. More investors from Europe and China have marched in. But Zeya said he is confident that as the local company and with experienced staff, it could compete with the foreign competitors.
Gunkul added that though Burma provides huge business opportunities, new investors might take time to grow without good long-term business relations in Burma.
Meanwhile, Gunkul will fully focus on the alternative energy business in 2013, switching from the trading business.