There has been a lot of discussion about the opportunities that Myanmar’s growth and development provides to the local and regional food industry.
Earlier this month, the FIA Secretariat had the opportunity to speak to Wai Phyo, Vice President of the Myanmar Food Processors and Exporters Association (MFPEA) and the AFBA Chairman for Myanmar about the opportunities and challenges facing the food industry in Myanmar.
During the conversation, Wai Phyo provided an overview of the Myanmar food industry, MFPEA’s objectives as well as his insights into what the organisation seeks to achieve out of its membership with AFBA.
FIA: Why does the food industry in Myanmar have so much potential?
Wai Phyo: Firstly, Myanmar is blessed with abundant natural resources such as fertile land and water resources which provide the right environment for agribusiness development and domestic food production. It is also geopolitically well positioned between China and India, two of the largest food and beverage consuming nations in the world, and accessible to the rest of South East Asia. This means the potential for local food production and trade is significant, which is crucial to Myanmar’s overall economic development, given agriculture accounts for almost 50 per cent of GDP and 75 per cent of Myanmar’s workforce.
Secondly, political and economic reforms have opened up the country to outside investment and opened our borders to bilateral trade. The Myanmar Government is proactively looking to increase Foreign Direct Investment (FDI) - McKinsey forecasts that FDI may reach US$100billion by 2030. With this investment comes an increasingly more affluent population, who are looking for higher quality food and more food choices. This presents a huge opportunity for both local food producers as well as multi-national food companies already operating in the region.
FIA: We are delighted that MFPEA has joined the AFBA network. Tell us more about your association and its objectives.
Wai Phyo: MFPEA was founded in 2006 to support the development and growth of the local food industry in Myanmar and we have four key objectives.
Firstly, we want to support the export activities of the local agro-based food processors. Currently, the industry has an almost 99 per cent reliance on the local market and MFPEA recognises that in order to build a vibrant food industry, we cannot only depend on the local market to sell our products and source our raw materials.
We are therefore focused on unlocking opportunities within the region, and further afield. The development of the ASEAN Economic Community (AEC) will play a big role in growing our access to regional export markets, and will also increase our ability to source raw materials from our ASEAN neighbours. However, we need to make sure our local manufacturers are ready to take advantage of these opportunities – particularly the small to medium enterprises (SMEs) – who are currently producing basic food products for local consumption.
To support their development, our organisation is also focused on continuing to educate processors and consumers about what constitutes good food. We want to help our processors understand what it takes to make nutritious, safe and high quality food and build capacity in this area. Our members have access to fully functioning laboratories to test their products and ensure they are microbiologically safe. We also push for voluntary standards, including food labelling guidelines. We support our members with a broad range of capacity building programmes including food safety training seminars.
Making high quality food is not possible without the right technology. Therefore MFPEA’s third objective is to make the latest food processing technology available to local food processors. Understanding and utilising this technology is vital for Myanmar-based processors to be able to move away from producing basic food products, and start adding value to their portfolio. Utilising current technology is also critical for us to be able to strengthen the safety of the food that we produce in Myanmar, and align with international standards.
The MFPEA also seeks to bridge the gap between the public and private sectors, and encourage further collaboration on key food industry issues such as producing safe, high quality food, accessing export markets and sourcing raw materials from countries outside Myanmar. We believe that such collaboration can create value for small, medium and large enterprises and consumers, by building capacity and helping to drive a harmonised approach to Myanmar’s food standards.
To support these efforts, we are currently looking at how we can expand our membership base. Today, our membership consists of only local food processors as, when MFPEA was established, MNCs did not have a strong presence in Myanmar.
However, as Myanmar has continued to open its doors to foreign investment, we are rapidly seeing multi-national food and beverage companies investing on the ground. As a result, we’re in the process of adapting MFPEA’s Charter to allow foreign companies to become part of our membership and would welcome discussions with any multinationals who are interested in joining the Association.
FIA: What are the immediate opportunities and challenges for the food industry in Myanmar?
Wai Phyo: The food industry in Myanmar is facing an exciting growth opportunity which we can unlock by building food safety and quality capability among local manufacturers and by gaining a strong foothold in international markets.
Growing foreign investment in Myanmar provides a good opportunity for local manufacturers to acquire technological expertise from international companies who have been exporting high quality products for decades. Value addition in Myanmar’s food industry is currently relatively low with the vast majority of the industry focusing on more traditional manufacturing methods and products. Knowledge transfer from international companies will allow us to produce higher value products, driving the overall value of the local food industry.
Building capacity in this area will also allow local companies to develop products that will appeal to regional and international consumers, helping to drive significant industry growth and increase Myanmar’s export revenue.
Today, not many of our local companies have the capabilities to export to overseas markets. With Myanmar opening its doors to foreign investment, and the establishment of the ASEAN Economic Community (AEC) in 2015, there is an opportunity for the food industry in Myanmar to once again become a major contributor to intra-and-extra regional trade.
FIA: As Myanmar begins a crucial year at the helm of ASEAN, it is vital that Myanmar food companies are well represented at a regional level. What does MFPEA hope to achieve from membership of AFBA?
Wai Phyo: MFPEA is pleased to be part of the AFBA family. We were first introduced to AFBA at a council meeting in Brunei and through that introduction, we found that MFPEA’s objectives, particularly those involving food safety and the harmonisation of standards, are aligned to AFBA’s.
Through our membership with AFBA, we hope to gain useful information about what is happening in the regional food industry. AFBA has strong networks with organisations and committees such as the ASEAN Prepared Foodstuff Product Working Group (PFPWG). Through AFBA, we hope to leverage these networks and benefit from the technological and educational programmes offered by the Alliance and the other members.
This will go a long way in helping the MFPEA grow as an association and create further growth opportunities for the food industry in Myanmar, particularly as we head towards the development of the AEC. At the same time, we hope to share our expertise and understanding of how to engage with government leaders in Myanmar so together, we can shape a positive agenda for the food and beverage industry in the country, and across ASEAN, for the next 12 months and beyond.