Thilawa builds $65m bulk terminal to diversify port services


30 March 2018  - A bulk terminal is in the pipeline near Thilawa Special Economic Zone in southern Yangon. The US$65 million project is partly funded by the International Finance Corporation and will be among the first providers of bulk cargo handling for the country.

Lluvia, a domestic agri-processing company, and Japan-based Kamigumi jointly established the International Bulk Terminal (Thilawa) Co, which will develop and operate a greenfield bulk terminal located at Thilawa. The estimated project cost is $65 million, while the IFC said on March 27 that it is providing long-term financing of $15 million to the venture.

The bulk terminal will be one of the first bulk terminals for the country, with a capacity of more than one million metric tonnes. It will lower transport and logistics costs and improve the competitiveness of Myanmar's supply chains by making it cheaper and more efficient to transport goods. In the near future, the port will be able to facilitate trade flows of wheat, animal feed and rice as well as other non-agricultural commodities.

The current lack of specialised and efficient bulk facilities forces producers and traders to containerize bulk commodities, which involves high handling costs, the IFC argued.

Tomoyasu Shimizu, MJTD president, told The Myanmar Times that the facility will expand the range of port services available in Myanmar and raise its game in the regional logistics industry.

"The addition of the new bulk terminal is a testament to investor confidence in Thilawa's growth and impact on Myanmar's economy and business environment," he said, adding that the logistics sector is a potential "big driver" for the country's trade, industrialisation and economy.

U Ko Gyi, managing director of Lluvia, said that the IFC's long-term debt financing is a necessity for infrastructure projects to succeed in this country.

Myanmar's geographic location means that a port expansion program could help the country to develop into a regional trans-shipment and logistics hub. This is in line with other reforms implemented recently, which has attracted big names to enter the market.

Thilawa SEZ is positioning itself as the manufacturing and logistics hub. Last month, SEZ-based Daizen Myanmar started offering bonded warehouse services to both domestic companies and international suppliers. Daizen is the first bonded warehouse operator and the first SEZ warehouse operator in Myanmar. The logistics liberalisation is set to accelerate integration of the regional supply chain.

Beyond ocean freight, Thilawa's geographical location is well-placed to capitalise on the untapped potential of Mae Sot-Myawaddy border trade. Last August, a pilot project using semi-trailer swapping with bonded cargo halved the time needed to reach the SEZ from Thailand, compared to conventional road freight. The project was carried out by Myanmar International Freight Forwarders Association (MIFFA), Daizen and Malaysia-based Overland Total Logistic Services (OTL).

Meanwhile, Japan's largest door-to-door delivery business, Yamato Group, will very soon start offering warehousing, cross-border transport and freight forwarding services in the country, in a bid to tap into the increasingly integrated regional supply chain.

Vikram Kumar from the IFC said that the new terminal is in line with Nay Pyi Taw's priority to scale up private sector participation in port and logistics industries in order to fuel economic growth.

Thilawa SEZ in southern Yangon is currently the only SEZ operating in Myanmar. The other two -- Kyaukphyu SEZ in Rakhine and Dawei SEZ in Tanintharyi -- are still at the planning stage.

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