Formerly known as Burma, Myanmar is the poorest nation in South East Asia with 56 million consumers. The country was ruled by a military dictatorship for several decades, but since 2011 there has been a transition to democracy under a civilian led reformist government. For the first time in more than thirty years the country is starting to open up to foreign inward direct investment.
However, three years on from the start of this transition, the country remains a very challenging environment for business, with most promised reforms yet to see the light of day. Even though the situation is improving, complicated investment rules and a difficult business environment remain among the main drawbacks. Undeveloped transport infrastructure and constraints in electricity supply are also common problems.
Despite these issues, there is growing foreign investment in processing and packaging equipment by local food processors and this is modernising the industry and driving demand for flexible packaging. PCI believes that demand has been growing by 6% per annum in recent years with most of the US$40 million used in 2014 being supplied by around 30 domestic flexible packaging converters. However, only six are understood to be of any significance and these account for at least 85% of domestic output.
From the analysis in our latest report, “OPPORTUNITIES IN EMERGING FLEXIBLE PACKAGING MARKETS TO 2019“, PCI experts believe the rate of growth in flexible packaging consumption in Myanmar is going to accelerate more rapidly over the next five years, increasing by an average of 22% per annum, albeit from a very small base. A large proportion (over half) of the increased demand for flexible packaging will have to be met by imports, but growing investment by domestic flexible packaging converters will put local producers on a more competitive footing.
Myanmar’s potential as a flexible packaging market can be best illustrated by the fact that per capita consumption in the country is now at a level that Vietnam was a decade ago (<US$1 per person) and Vietnam now uses US$9 of flexible packaging per head of population, compared to less than US$5 in India and US$13 in Indonesia.