Market Trends of Myanmar Packaging Industry
This section covers the major market trends shaping the Myanmar Packaging Market according to our research experts:
Growing Demand in Food and Beverage Industry
- Due to the improvement in foreign investment climate is the new Companies Law 2017 and growing middle-class Myanmar is increasingly becoming an attractive destination for foreign food brands this includes brands like KFC, Gloria Jeans Coffee, Café Amazon, Coffee Bean & Tea Leaf, Swensens, Burger King and Dominos. This is expected to boost the demand for paper cups, bowls and bags packaging used in restaurants.
- GDP per capita in Myanmar witnessed rapid increases between 2014 and 2019, boosting growth in food and beverage sales. The number of bars and restaurants is increasing, particularly in large cities like Mandalay and Yangon, where Myanmar citizens and most business expatriates frequently enjoy a bustling nightlife. Rising disposable income and optimistic consumer sentiment will be key drivers for growth in Food and Beverage sales and in turn the packaging industry
- In the food processing industry, until June 2019, there were 29,118 food and beverage companies registered, which is 57% of the total manufacturing companies. The food-processing sector consists mainly of instant noodles, coffee, tea, ready-to-eat traditional foods and bakery products.
- Domestic production of beverages including beer,spirits and soft drinks is growing fast, primarily due infusion of foreign direct investment.
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Increasing Investment in Manufacturing through FDI
- The region witnessed a continues increase in investment through FDI particularly in manufacturing, transport and communication sectors, The manufacturing sector witnessing increasing opportunities due to the significant growth in the domestic market of Myanmar as well as direct access to the strategic markets of southeast Asian countries as well as to India and China Myanmar also has comparatively low labor costs, abundant natural resource, and a diverse agricultural base for value-added production to encourage the growth of the manufacturing sector. This has boosted demand for corrugated and heavy-duty packaging in the region.
- Due to growing real GDP, increasing consumption, and untapped market opportunities, many Packaging firms are investing in Myanmar through direct investment or Joint venture. For Instance, in 2016 Daibochi Plastic and Packaging Industry Bhd announced to invest RM29 million for a 60% stake in the joint venture company with Myanmar Smart Pack Industrial Company Ltd (MSP) to establish a production facility in Yangon, Myanmar to manufacture, sell and distribute flexible packaging products within the country, as well as to export and invested about RM23.6 million for capital expenditure over a three year period to enhance the facility’s production capacity, quality and efficiency.
- Further increasing demand for construction chemicals and pesticides in the agriculture industry is driving Chemical industry investments in the region. For Instance, in 2018, BASF opens its first manufacturing plant in Myanmar, producing chemicals for local market Evonik, a Germany based chemical company is also considering an investment in Myanmar. These investments will further boost the chemical industry packaging demand in the region.
