The National Food Institute (NFI) is advising businesses to take advantage of the Asean Economic Community (AEC) to invest in Myanmar and use the neighboring country as a gateway to the Middle East, Europe and Africa.
NFI president Petch Chinabutr said Myanmar will soon pass policies to promote the agriculture industry including an expansion of growing areas, irrigation systems and foreign investment.
Although Myanmar has factories that produce processed food, the quality is not good as their technology is old and they lack basic infrastructure.
"The Myanmar government wants investors to develop this sector," he said.
Myanmar's agricultural industry is its largest source of revenue, totaling 59.1 percent of the country's GDP and employing 67.1 percent of the population.
Main imports include: palm oil, ready-made food, vegetable oil, non-alcoholic drinks and rice.
During 2002-2009, imports on average grew 9.4 percent per year, while exports increased 10.4 percent per year. Dried nuts were the main exports, followed by sesame seeds, chick peas, corn and rice.
Myanmar is in the process of revising measures to promote overseas investment, such as drafting a new investment act that waives corporate income tax for a period of eight years, up from the existing three years, and lowering by 50 percent the tax on profit made from exports.
Business opportunities exist in the food service sectors, processed food, restaurants and selling tea.
Mr. Petch predicts the food sector will greatly benefit once the deep-sea port and industrial estates are built in Dawei, providing a gateway to the Indian Ocean, the Middle East, Europe and Africa.
Thai businesses should sell cheap consumer goods, technology and agricultural machinery to Myanmar, he said.
Consignment and word of mouth is one way to introduce products along the Thai-Myanmar border, as Myanmar people stick to the products they know.
He added Myanmar is a good source of unskilled labor for the food industry.
Last year Thailand imported 2.45 billion baht worth of food from Myanmar, down from 3.12 billion in 2010. Thailand is the fourth-largest exporter to Myanmar.
Mr. Petch said despite the benefits Thailand will receive from Myanmar investment, such as the generalized system of preferences (GSP), businesses also need to consider raw materials, machinery, packaging and logistics costs.
Source: Bangkok Post, Thailand