Yoma diversifies in booming Myanmar market

SINGAPORE — Singapore-listed conglomerate Yoma Strategic Holdings is planning to expand into education, agriculture and logistics in a bid to capture emerging business trends and diversify its income stream in Myanmar, a booming frontier market.

The conglomerate, which has a portfolio that currently focuses primarily on real estate, yesterday announced plans to develop several educational facilities, including an international school and a local school, in two of its major real estate projects in Myanmar.

The expectation is that establishing premium schools in housing developments will add value to the properties on offer, said Group Chief Executive Andrew Rickards during a press conference in Singapore.

“From a property development’s point of view, it’s clear what happens to your (property) project when you announce a school nearby,” he added. “In Singapore, there’s a 20 to 30 per cent increase in the value of residential development and about 15 per cent in Vietnam … So, 15 to 30 per cent might be the increase just by having schools there.”

Yoma will partner two British education groups — Dulwich College International and Harrow International Management Services — to establish the schools, which will give the company exposure to an industry that offers significant growth potential after the Myanmar government decided to open up the education sector to more private operators in late 2012.

The private-school market could be worth more than US$100 million (S$127 million) in 2024, research by Thura Swiss shows and, as Myanmar currently has only about five international schools, the pent-up demand for world-class education presents a great business opportunity, said Executive Chairman Serge Pun.

The expansion into new sectors also marks Yoma’s strategy to diversify its source of income, he added.

“Ideally, I hope Yoma, as a conglomerate, would have a balanced income stream. Real estate will always be a pillar and, at this moment, contributes to slightly more than 90 per cent (of income),” he said. “I’d like to see at least 50 per cent of our income stream coming from non-real estate businesses.”

One of these initiatives is a coming joint venture with global commodity specialist ED&F Man Holdings to plant and produce coffee in Myanmar. The joint venture, of which 85 per cent is owned by Yoma, aims to invest US$20 million and plant 1,497ha of coffee in four years, in anticipation of Myanmar’s emergence as a major producer in South-east Asia.

Separately, Yoma is forming a joint venture to supply dairy products to the country’s growing consumer market. It is also partnering Japan’s Kokubuto offer cold storage and logistics services to Myanmar’s agriculture sector.

Yoma’s active expansion in the country comes at a time when Myanmar continues to attract foreign companies in search of growth in Asia’s latest frontier market.

Many Singapore firms across all industries are joining the rush to exploit opportunities in the country: Earlier this week, Great Eastern Life opened its Myanmar representative office, becoming the first South-east Asian life insurer to get official approval to set up an office there.

However, as more firms flock to Myanmar, competition intensifies, conceded Mr Pun, as Yoma’s failure in its bid for a telecommunications licence in the country last year showed.

“But we are fully prepared for that … Our edge lies in our human resources. I do not think there’s any company there that has prepared itself as well as we have, in terms of recruiting expertise and personnel,” he said.