A businessman holds out cash in the local currency, the kyat, access to which is expected to be easier following a recent CBM move to permit loans without collateral. The Myanmar Times.
Local banks are now permitted to extend loans without the need for collaterals, U Set Aung, Deputy Minister at the Ministry of Planning and Finance, told The Myanmar Times at the 5th Asia SME Conference in Naypyitaw on October 14.
“The Central Bank of Myanmar (CBM) has allowed local banks to provide loans without movable and resalable assets as collaterals provided the banks set the suitable risk management policies in place. The loan process will become complete when the banks can implement proper risk management,” U Set Aung said.
The development should serve as a welcome reprieve for many cash-strapped SMEs. In Myanmar, access to funds is the main barrier in the way of growth and development of small and medium enterprises (SMEs). This is because loans issued to businesses are approved based on collateral –typically property or land - and are mostly over periods of just one year.
As such, relaxing the loan collateral system is necessary to help more SMEs qualify for loans.
Fund limitations
It is like buying a car without fuel and it is impossible to drive without fuel.” U Ngwe Tun, chair of Aung Nay Lin Tun Company which produces Nyan Gyi Shin coffee, told The Myanmar Times.
“Without capital, one small business cannot develop and expand. Today’s world famous Apple Co. started as a small business. But they had the financial support which we don’t have,” said U Kyaw Win, president of Sinma, a furniture export firm.
Credit is also notoriously steep in a country that for years had been plagued by high inflation. Interest rates for local banks are fixed by the CBM at 8.5 percent to 13 percent.
Be self reliant
But businesses should not expect to be handheld by the government and should learn to stand on their own feet, U Set Aung said, adding that with lower inflation and a stable exchange rate, the government has created “a friendly and attractive environment to facilitate investments and address the multinational issues faced by SMEs.”
“But there are also many things SMEs can do to help themselves,” he said during his speech at the conference in Naypyitaw.
One way is by using mobile technology to create new ways of doing business or facilitating existing operations. For example in Myanmar, mobile phone penetration has grown to over 100pc in 2017 compared to just 4pc four years ago. Leveraging on this, SMEs can create new business models in areas like mobile financial services, such as devising better solutions for cross-border payments.
There are many ways for to bypass the challenges of cross-border transactions such as exploring the use of bitcoins and other cryptocurrencies, U Set Aung suggested. “We are talking to the Monetary Authority of Singapore and the Bank of Thailand to enable cross-border mobile payments to take place on a real-time basis,” he said, adding that the process is not easy and that SMEs should work together to find solutions and expand.
Currently, there are over 20,000 registered SMEs in Myanmar. The SME Development Department has already recommended about 4,000 SME for loans and about 1,000 of them have successfully obtained access to credit for further expansion, The Myanmar Times understands.
Announcement for requesting approval of the Central Bank of Myanmar for offshore loan!
1. In accordance with paragraph 48 of the Foreign Exchange Management Regulation, resident shall not take foreign loans from abroad or conduct other types of borrowing abroad or documents that are likely to be loans without the prior approval of the Central Bank, and shall comply with the provisions of the Central Bank.
2. As per para1, resident, who wants to seek an offshore loan, to get the approval of the Central Bank of Myanmar may apply directly or through Myanmar Investment Commission to the Central Bank of Myanmar by the following documents:
(a) An application which is addressed to "the Central Bank of Myanmar, Office No(55), Nay Pyi Taw".
(b) Relevant documents with regard to the company's profile such as Company Registration Certificate, Form VI, Form XXVI, Memorandum of Association, Memorandum of Articles, etc.
(c) If the company has been already established, financial statements for the current year and previous year as approved by an external certified auditor, who should be a Certified Public Accountant.
(d) Loan Agreement (Draft) including repayment schedule for the proposed loan and other relevant data.
(e) Bank Credit advices evidence of equity transferred to the company (borrower).
(f) Other documentary evidence.
3. Based on the submitted documents, the Central Bank of Myanmar will review and scrutinize the following facts, and approve or reject the proposal:
(a) Whether the amount of equity capital of the applicant exceeds USD 500,000.
(b) Whether the applicant (borrower) has an access to a matching foreign exchange income or not.
(c) Whether the borrower is able to repay the loan from the income generated from domestic business, and has plans to mitigate the exchange risk even if he or she does not have a foreign exchange income.
(d) Whether the borrower has already transferred 80% of equity committed in MIC permit or not.
(e) Whether Debt to Equity Ratio is within a maximum of 3:1 and 4:1 or not
(f) Whether there are completion and correctness of terms and conditions mentioned in loan agreement and documents or not.
(g) Whether the loan tenure is medium-term or long-term, and loan repayment schedule is consistent with loan agreement or not.
The government has recommended over 1,000 domestic small and medium-sized enterprises (SMEs) to receive loans from banks, according to the Central Department of Small and Medium Enterprises Development (CDSMED).
More than 1,000 SME among an estimated 9,000 in Myanmar have been recommended by the CDSMED to receive loans, an official from the department told The Myanmar Times.
There are 46,794 industries officially registered at the Ministry of Industry in Myanmar.
The department issues membership cards to local SMEs and its membership numbers at approximately 9,000.
The CDSMED has made recommendations to financial institutions on providing loans for over 1,000 enterprises. The banks will offer loans after making an assessment on the recommended SMEs.
“First of all, SMEs which want to borrow have to apply for membership for the Central Department of Small and Medium Enterprise Development.
“The department provides recommendations for any member who wants to take a loan. Financial institutions will offer loans after assessments have been made for the SMEs that we recommended in accordance with their procedures.
“The department is supposed to give a recommendation to banks or financial institutions about which SMEs are members of the department. Now we are working to provide SME loans by cooperating with local banks,” he said.
Number still small However, given the estimated overall number of businesses and enterprises, the number of SMEs recommended by the CDSMED is still small. And, relatively few local enterprises have received loans.
“Despite the large number of SMEs which were granted membership cards, most haven’t applied for loans. We just give recommendations,” the CDSMED official said.
Currently, the Japan International Cooperation Agency (JICA) has offered SME loans through local banks. Local SMEs which want to take SME loans with an 8.5 percent interest rate can apply at the department. At present, KBZ and CB banks have been providing SME loans under this program.
“The Japan International Corporation Agency linked up with local banks to pay small and medium-sized enterprises loans.
“When businesses submit their applications and documents to us, the banks, we also send the information submitted to JICA.
“After JICA has green-lighted the application, we pay the loans,” U Zaw Man Oo, assistant general manager of KBZ bank, small and medium banking enterprise department told The Myanmar Times.
“Loans for SMEs will be easier to acquire.”
“Borrowers can discuss with banks, depending on the amount of loans, and whether they are capable of providing collateral. However, the projects must be systematic,” U Saw De Nol Khuu, leader of the project from CB Bank told The Myanmar Times.
Challenging conditions Loans are being extended to SMEs by the Small and Medium Industry Development Bank (SMIDB), KBZ Bank, Yoma Bank and other domestic banks. But the loans require collateral and a minimum of two-year operating experience. These present difficulties for new businesses to have access to those financial resources.
“I am doing business in the field of selling international flight tickets.
“I would like to expand my business but it requires a two-year minimum operating experience. So it is difficult to secure the loans and expand the business for now,” a young entrepreneur said.
It is not only the SMEs who find it difficult to receive loans. Moderately established businessmen also have difficulties to secure loans in Myanmar, according to businessman U Nay Lin Zin, who is involved in import and export trade.
Central Bank of Myanmar Strengthens Grip over Foreign Loans
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Reuters.
With a new circular letter addressed to Myanmar banks dated 3 July 2014 (the CBM Letter), the Central Bank of Myanmar has reasserted control over foreign loans that are provided to domestic and foreign owned borrowers in Myanmar. The CBM has clarified approval requirements and increased the accountability of Myanmar banks for foreign loans that are brought into the country. The CBM Letter covers situations where the borrower has obtained a permit from the Myanmar Investment Commission (MIC), as well as all other borrowers.
Ever since the adoption of the Foreign Exchange Management Act (FEMA) and the Foreign Investment Law (FIL) of 2012, the fate of foreign loans has always remained somewhat confusing. Although there is no doubt that loans from overseas are possible as a principle under both instruments, in practice clients often received conflicting information from bankers and advisors with respect to the approvals and process concerned. Unfortunately, this confusion that was not really cleared up with the CBM Directive of 2012 which implemented FEMA (Foreign Exchange Directive).
Why the confusion?
Part of the problem is FEMA itself. In the text of the law, the crucial distinction that is made to allow foreign exchange remittances is that of “current account” versus “capital account”, concepts that are of course adopted from international financial law. In the Myanmar system, any payment that is a current account payment will not be restricted by the CBM. Certain capital payments can be restricted by the CBM. So, it is crucial to know for any payment which category applies. First of all, the definitions are not ideally drafted in FEMA since there is only a very brief description of what comprises the “current account”, and “capital account” is basically defined as anything which is not in the “current account”.
Some of the confusion that has plagued foreign investors stems from the fact that payments on loans are mentioned in both categories, and without any clearly prescribed differences. In s.2 (l), a short-term loan can resort under “current account”, (without specifying the term of such a short-term loan). However, in s.30 reimbursement of loans in general is also mentioned in connection with the “capital account”. In other words, loans are straddling the two different main categories without clearly spelling out which characteristics would end up a loan in the one or in the other category.
But there is more. The Foreign Exchange Directive of 2012, loans are included under the “current account”, but it is unclear if only short-term loans are meant. Plus, the Directive only refers explicitly to loans approved by the MIC in its overview table and leaves upon the question what would happen with borrowers which are non-MIC.
Finally, s.17 of the Foreign Exchange Directive of 2012 specifies that Myanmar banks need to review the “purpose of transfers” to assess whether the transfer was really a current account payment. If it is not, the remittance may not be made.
To sum it up, the Myanmar regulation of the loans are caught in seemingly overlapping local interpretation under FEMA which goes well beyond the classic “current account” and “capital account” bifurcation as a change of ownership in domestic assets, akin to what is found in international financial law. Moreover, Myanmar banks may have their own interpretation of the “purpose” of a transfer.
New CBM Letter on foreign loans
The CBM Letter clears up a few things, but also creates a set of new challenges. The CBM Letter introduces a list of elements that Myanmar banks need to take into account when evaluating foreign loans, including:
· Size of loan and tenure, and loan contract
· Whether the interest rate is a market-based interest rate
· Whether the business plan of the resident borrower is appropriate
· Type of the collateral and whether it is capable of being performed in law
· Whether the repayment schedule is appropriate; and
· Other elements detailed in the CBM Letter.
The CBM Letter provides that “licensed banks trading foreign exchange shall review the points contained [above] on the basis of the local business situation, the situation of the project to be executed with foreign loan and its expected income, capability to repay loan and profitability to the country and its people”.
The CBM Letter envisages a new reporting and approval system, where Myanmar banks will need to collect certain data, make an assessment about certain criteria, report information to the CBM, and receive an approval. It seems to us that the Myanmar bank would have to go through this new process for each loan, even loans that were already approved by the MIC. For a Myanmar bank not to go through the process and receive CBM approval, which is theoretically possible as there is no physical restraint on release of funds by a Myanmar bank, might engage its liability.
What will happen in practice?
Obviously, the rather wide scope of this criterion may pose some problems for Myanmar banks to interpret and apply. There is little to gain for a Myanmar bank by venturing out ahead of CBM approval, so the effect will often be that inward funds will not be released until the CBM has so approved based on a review of the information that must be collected under the CBM Letter.
That means for inward remittances that a transfer should be well prepared in advance. The required documents should be collected in advance, and an assessment should be made whether the documents show any lacuna which might hold up the release of the funds. Clients should take the matter up with their Myanmar banker, and if necessary retain professional advice. Inward remittances might cause real problems in a number of cases, such as when an operating license for a business has not yet been secured, when the contract is not enforceable on its face, or when there are legal impediments with respect to the assets connected with the loan. Of course, in a more general sense one might encounter problems with the paperwork or with communication.
Problem scenarios for repatriation
It is essential for repatriation purposes that the person who has brought in the funds has properly documented its involvement. Only this person can extract the same funds again, as a rule. In general, this means that clients should document the process well. In some exceptional cases, there may be difficulties with this. For example, in some cases funds are brought in as an advance to a local partner in a joint venture before the actual JVCo is setup in Myanmar. For example, the local partner might have to pay a deposit on a lease contract to secure a property before the formalities of company establishment have been completed. So, the capital account of the JVCo will not show the person who brought in the funds. If such issues are not fixed in terms of paperwork, there is a risk that the re-extraction of the funds might be disallowed at a later stage.
Edwin Vanderbruggen is Partner at Yangon-based law and tax advisory firm VDB Loi.
SMEs Development MEB, six private banks to lease K30 billion to SMEs
Myanma Economic Bank, teaming up with six private banks will give K30 billion loans to small and medium enterprises (SMEs), according to Ministry of Industry.
The country’s SMEs can acquire loans from the Myanma Oriental Bank, Ayeyawady Bank, from Co-Operative Bank (CB), commonly known as CB Bank, the Myanmar Citizens Bank, the Kanbawza Bank and the Small and Medium Industrial Development Bank under the Credit Guarantee Insurance (CGI) system, Daw Aye Aye Win, the head of the industrial inspection and administration department of the Ministry of Industry, said yesterday at a forum on prospects for SMEs held in Yangon.
The move is aimed at developing SMEs in Myanmar, she added.
“To get the loans, SMEs should provide enough collateral or strong business, and they can apply for loans at the banks by September” said Daw Aye Aye Win. The businesses can get at least K15 million to K500 million with the interest rate of 8.5 per cent, and if they can not provide collateral, they need to pay another 2.5 percent. The duration of the loan is set for five years.
The CGI system is jointly implemented by Myanma Insurance, Sumitomo Mitsui Banking Corporation and CB Bank.
Small and Medium Industrial Development Bank (SMIDB) announced last month that 300 Small and Medium-sized Enterprises (SMEs) have outstanding repayments for the 2015-16 fiscal year.
K5bn have been issued to 11 SMEs this fiscal year, and K20 billion issued to SMEs in the 2015- 2016 FY by the SMIDB.
At the moment, 90 per cent of Myanmar Businesses are SMEs.
Small and medium enterprises (SMEs), the backbone of Myanmar’s economy, say they are still struggling to source financing for start-ups and business expansion with insufficient funding made available by banks.
President U Thein Sein’s government has recognised the importance of SMEs, the pillar of the private sector which accounts for 90 percent of economic output, and has established an SME Development Center under the Ministry of Industry. Part of its mandate is to provide training to SMEs on understanding banking regulations and processes required to obtain bank loans.
Despite such efforts, a survey of some 2500 SMEs by the German Institute for Development Evaluation, published last August, found that only about 20pc of SMEs have an outstanding loan.
“Customers and relatives or friends are clearly the most common source of finance. Key factors are trust and longstanding relationships. Larger firms also regularly apply for loans from commercial banks. Land and buildings are usually used to satisfy collateral requirements. Most SMEs have considerable additional funding needs and plan to apply for loans for business expansion,” the report said.
Ma Kim Chaw Su, managing director of the International Banking division at KBZ Bank, said SME owners and managers lacked understanding of financial accounting in applying for loans.
“We need to sure the business is strong and we also look at cash flow, products and business projects. Foreign banks also look at these points with my bank,” she said, referring to loans made available by newly opened foreign banks in Myanmar for SMEs through local banks.
Loring Harkness, founder of Ngwe Su, a community finance platform, says owners of micro businesses often do not have access to financial services and, when they do, those financial services are not always affordable. Access to savings, investments and insurance should be expanded, he said.
“Some micro businesses don’t need financing if someone already has the money. You can start a micro business with little or no money at all. Myanmar banking should catch up soon but right now it’s very behind. Loans are only available for the rich,” said Ryan Russell, senior consultant at Myanmar Business Answers.
“There is a huge gap between them, with micro-finance that starts at $30 and goes as high as US$5000 and $1 million which is where the banks are at right now. A lot of micro businesses need $2000 to $20,000 to get started. And many could use a lot more if they are going to start with several staff on salary,” he said. According to U Aung Min of the Union of Myanmar Federation of Chambers of Commerce and Industry, banks extended loans totaling K30 billion ($23 million) to 344 businesses in the first nine months of last year.
U Zaw Min Win, chair of the Myanmar Industries Association, said interest rates of 8.5pc were too high for many businesses.
Kee Shin, president of Malaysia’s Small and Medium Industries Association, told a recent meeting of the ASEAN Economic Community that governments needed to give consistent and stable support to SMEs. Some 90pc of small businesses were worried about the challenges of financing and most countries in the economic region were witnessing a slowdown in SME growth, he said, stressing also the need for foreign direct investment and intervention by NGOs.
Image may be NSFW. Clik here to view.KBZ offers Myanmar citizens loans and overdrafts, in order to promote development, increase business growth and to develop working capital within the country.
Applying for a loan
A typical termcvttt of loan and overdraft is one (1) year It is thereafter renewable on a yearly basis.Cards at our ATMs.
Interest
13% annual
Interest
Loan interest is paid on the total amount approved and overdraft interest is paid on the amount used.
Payment Period
1 Year
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Required Documents
Business Information
• Business license form • Company registration form • Receipts of revenue tax for the last 3 years • Financial statements for the last 3 years
Company
• Company registration form and if an export/import business the company must possess export/import license with valid dates • Organizational records, Form 6, Form 26 and Form E • A written approval from board of directors • The paid up capital amount from an updated audited balance sheet and the paid up capital from Form E must be the same amount
Collateral
• Documents concerning the ownership of properties • Grant, map and history of property
Under the Central Bank of Myanmar regulations, the following collateral are accepted
• Immovable properties • Government bonds and securities • Machinery • Fixed deposits or Savings deposits • Goods • Gold • Company Shares
Personal Documents
• Copy of National ID • Household Registration • Letter of Recommendation clearly stating that you are living in shared quarters • Guarantee that you are single if you are single • Divorce papers and papers proving you aren’t marrying any time soon
according to the information from the Credit Guarantee Insurance and SME loan product introduction of the CB Bank on 6 May. The CB Bank disbursed loans to the SMEs with credit guarantee insurances as of March.
With regard to the rules, the SME which wishes to borrow loans through CGI must turn at least three years and it must be owned by Myanmar citizens. The applications must be attached to certificates of SME and financial statements. The interest rate is similar between the loans with or without mortgages. After taking the loans for one year, the SME must pay back interest to the bank monthly. The SME must put SGI at the Myanmar Insurance.
Cooperative Bank (CB) has introduced a Credit Guarantee Insurance (CGI) system for small and medium enterprises (SME) to help develop small businesses in Myanmar.
The bank launched its first disbursement loan in cooperation with Myanma Insurance Enterprise (MIE) and the SME Development Centre under and Ministry of Industry.
“We especially focus on developing the SME sector in Myanmar. We want SMEs to develop responsible businesses and pay taxes. These loans will help SMEs build their businesses,” U Kyaw Lwin, CEO of CB, said.
To acquire the loan, applicants must to be responsible for providing a certificate from the SME Development Centre, at least three years of financial statements, proposals including detailed information and a loan insurance certificate from Myanma Insurance Enterprise.
The loan process can be finished within a month depending on the required information, CB claimed.
“Myanma Insurance will check their finances, whether the business is family-owned or a joint venture with foreign firms including other stakeholders’ involvement. If an application matches with our criteria, we will recommend them for CGI loan,” Deputy General Manager of MIE Daw Hla Hla Mon said.
The maximum available loan amount is K20 million with a 13 percent interest rate. Based upon the situation of individual SMEs, the loan period is for one or more years. The borrowers must make monthly payments on the loan during the allowed period.
MIE will pay 60 percent of the total loan to the bank as insurance and if a natural disaster hits the business, the remaining 40 percent will not have to be paid back by the borrowers, U Kyaw Lwin said.
Loan applications are received by all CB Bank branches across the country, but processing time will be the quickest in Yangon, the bank said.
YOMA BANK SME Banking!
Image may be NSFW. Clik here to view.Yoma Bank is committed to supporting SME development in Myanmar. We believe that small business is the backbone of Myanmar’s economy providing better services and products as we emerge from decades of isolation. We also believe the SME are viable, commercial enterprises that deserve the respect and high level of service that a larger, corporate, client may demand. Our goal is to support the development of SME into larger, sustainable businesses that can expand nationally and across the ASEAN region.
Servicing SME requires significant investment in technology and outreach that will allow Yoma Bank to target these businesses in a sustainable manner. Our challenge is to deliver competitive, quality products to our SME customers as well as manage risk for the Bank. Currently Yoma Bank is identifying and investing in these technologies with the goal of expanding its SME offering in the years to come.
In the meantime Yoma Bank is actively targeting SME in its loan portfolio - over 70% of our loans have been made to SME with an average loan size of 175,000,000 kyat or USD175,000. We are particularly pleased that many of these loans have been made outside of the more developed commercial centres of Yangon and Mandalay supporting broad based growth across Myanmar.
Yoma Bank presents a rich heritage and, just as importantly, a bright future. Investing and growing a business in today’s Myanmar fast-forward market is complex yet delicate. Our corporate banking team comprises experienced bankers with in-depth knowledge and hands-on experience, delivering you international best practices and solutions tailored to your needs. Our responsible corporate bankers understand business, and can assist you to grow your business domestically and globally. We provide a package of financial products and services that offers convenience, value and flexibility for you and your business.
Exclusive: Tussle over Myanmar bank reform puts spotlight on debt pile
NOVEMBER 23, 2017 ~ Reporting By Yimou Lee and Thu Thu Aung;
NAYPYITAW (Reuters) - Myanmar’s central bank has backed off from a demand that the country’s private banks clear most of their loan books by January, averting a cliff-edge scenario that some bankers warned could have destabilized the financial system.
Myanmar’s central bank deputy governor, Soe Thein, told Reuters that three years - instead of the original deadline of six months - would be given to lenders to recover the mostly open-ended “overdraft loans” that make up the bulk of their lending.
The compromise ends a lengthy tussle over regulations introduced in July to bring the country’s banks closer to international standards. Reforming the banking sector is a key goal in leader Aung San Suu Kyi’s plan to complete Myanmar’s democratic transition after decades of isolation under military rule. “They need reasonable time for the transitional period...Sometimes international practice can’t work domestically. We are very aware of and careful about the situation,” said Soe Thein in an interview. “The economy is not in a strong position, so we want the financial sector to be in a stable position. We have to establish an understanding between the banks and the central bank.”
The new regulations also include stricter guidelines for bad loans - also known as “non-performing loans” (NPLs) - and an increase in the amount of capital banks are required to set aside to cover losses. The central bank says it fears that the amount of bad debt on private lenders’ books is greater than has so far been declared to the authorities. But officials are also concerned that pushing too quickly on reform could trigger volatility in the financial system. “It’s not easy, we agree, but we have to try,” said Soe Thein, declining to provide an estimate of the scale of the problem because he said it was “dangerous” to try to estimate how much money the banks had lent in loans that are unlikely to be repaid.
OVERDRAFT LOANS
Officials and bankers say around 70 percent of Myanmar’s more than $9 billion lending pool is in the form of so-called overdraft or evergreen loans - typically made on preferential terms to lure customers and rolled-over indefinitely. The central bank moved in July to end such practices with the new regulations drafted with the help of the International Monetary Fund. The curbs would force the banks to end indefinite roll-overs of the loans, asking them to get the loans repaid for a period of two full weeks on an annual basis. Banks complained they were being given only six months to fix years of junta-era mismanagement and to recover most of their loans amid a sluggish economy.
“They (central bank) know what’s going on in our books, but what they are asking for is almost impossible... All the local banks are in a difficult position,” said Pyi Soe Htin, executive director of international banking for Yangon-based Asia Green Development Bank. After at least three rounds of talks since July, Soe Thein told Reuters the central bank would “in the next few days” issue “follow-up instructions”, allowing the overdraft loans to be converted into regular, three-year loans - a compromise that offers breathing space to Myanmar’s 24 private banks.
“The payment terms and conditions will be a bit relaxed, so the customers can be a little relaxed on the payment as well as the banks can get more collection from their customers,” said Soe Thein. He did not give details of the terms of those new loans.
Some in the fledgling financial sector said that attempting to get so much debt repaid by January could trigger a run on the banks, which are deeply entwined both with one another and with the conglomerates run by businessmen close to the former ruling elite that dominate key sectors from real estate to aviation.
“This would create panic and we would have bank runs because our general public is very cautious,” said Kim Chawsu, managing partner at Katalysts Investment Group and former chief financial officer of the parent company of Myanmar’s largest lender, Kanbawza Group. “If one of the banks fails, there will be a domino effect...you need to be careful on how strict you are.”
The compromise by the central bank underlines the daunting challenge facing Suu Kyi, whose promise of a modern, reformist government that would end Western sanctions and attract investment is under threat.
The Rohingya crisis in the northeast means some aid to Myanmar is being withheld, investors have turned wary and the country faces reinstatement of some of sanctions, making reforms more difficult.
NON-PERFORMING LOANS
Despite having one of the least developed financial sectors in the region, Myanmar’s banking assets have jumped to 55 percent of its GDP in 2016 from 15 percent in 2011, when the junta handed power to a semi-civilian government, according to German state development agency GIZ.
But even after widespread political and economic reforms began in 2011, bankers say the banks have continued to lend largely on preferential terms to a small group of well-connected customers.
“These cronies, who have a lot of money, set up banks without experience or any knowledge on banking,” said Sein Maung, chairman of Yangon-based First Private Bank, adding banks often lend money to “people in their networks”.
The new rules introduced in July, which also included stricter curbs on banks’ exposure to individual borrowers, were an attempt to change lending practices and force lenders to deal with riskier loans in a banking system that has remained poorly regulated.
Deputy governor Soe Thein said the central bank still needed to evaluate the real state of the banks and “know the magnitude of the non-performing loans”. He said that, while major banks regularly report a healthy NPL ratio at 5-6 percent of total loans, “that is lower than the real situation”.
He did not elaborate. Than Lwin, former deputy central bank governor and senior adviser at Kanbawza Bank, said lenders and the central bank hold a “different definition” of what constitutes an NPL. He said banks evaluate loans based on the borrower’s background and potential ability to repay, whereas the central bank - in line with international practice - judges them on number of days in arrears.
As part of Myanmar’s lending reforms, Soe Thein said the central bank was set to raise the maximum lending rate to 16 percent from 13 percent so that banks could generate capital by offering higher risk loans. The central bank was also considering allowing non-collateral loans, Soe Thein said, ending a long-standing restriction that limits loan guarantees mainly to land and buildings.
He did not elaborate on the timeframe. With home prices in the commercial hub of Yangon dropping some 20 percent over the past three years, according to property consultancy Colliers, the move could help ease concerns about lenders’ over-exposure to higher-risk property.
Soe Thein said the central bank’s forthcoming follow-up directive would allow banks to convert overdraft facilities to loans with terms of three years from July this year, with the exception of those loans already declared by the banks as NPLs.
After that, he said, the central bank would request full disclosures on all loans from banks and enter into further, if necessary one-on-one, negotiations on how to clean up their balance sheets, starting with loans above 5 billion kyat ($3.67 million).
Some in the industry, however, have warned that if the central bank rows back on its hard line when negotiating with the banks it may jeopardize much-needed reforms.
“They can’t afford to delay the implementation because if they do that, they lose full leverage,” said a financial professional involved in lending to local businesses, who declined to be named due to the sensitivity of the matter. ($1 = 1,364.0000 kyat)
SAN FRANCISCO — Thirteen years ago, Debbie Aung Din and Jim Taylor moved to Myanmar with their two children to launch Proximity Designs. The nonprofit aims to make rural families more prosperous by designing, creating, and selling products that boost the productivity and incomes of farmers. The 555,000 households they have reached typically earn an additional $250 a year, which they invest in feeding their families, improving their farms, and sending their kids to school.
“We treat people as customers,” she said in a talk at the We the Future event organized by the Skoll Foundation and the United Nations Foundation during Global Goals Week in September. “They’re not charity recipients or aid beneficiaries. It’s a relationship of mutual exchange and power. You see, if you give something away free you never know whether it’s used or valued.”
World Bank withholds Myanmar funding, but some call for sanctions The World Bank announced Thursday it will delay the release of $200 million in financing to the government of Myanmar, in response to "the violence, destruction and forced displacement of the Rohingya."
Aung Din began her talk by referencing the “dark and difficult times” that Myanmar is facing, in reference to the Rohingya crisis. She discussed the power of “proximate leadership,” which means living with and truly understanding people before trying to help them, and spoke with Devex onstage about how the global development community might get closer to the people they aim to serve. Her talk focused primarily on the farmers who she said inspire her team to keep going “in this difficult task of building a nation that can someday be democratic, fair, prosperous, and inclusive for all.”
Social entrepreneurs are looking to donors and NGOs as partners in achieving health and development outcomes in Myanmar.
As donors and NGOs focus on the humanitarian crisis in the Southeast Asian nation formerly known as Burma, social entrepreneurs are continuing their work on other health and development challenges facing the country. A few years ago, Myanmar was second only to North Korea in terms of low connectivity and isolation, but since five decades of military rule ended in 2011, mobile phone usage has grown to 90 percent of the population, with 80 percent on smartphones. Since the country opened its doors to foreign investors, there has been growing interest, from bilateral and multilateral donors to venture philanthropists and impact investors, in a rising number of social enterprises.
“The lack of legacy infrastructure creates room for ‘leapfrog’ technologies to scale in Myanmar,” said Julian Rowlands, Asia director at Alter Global, which describes its work as “scaling frontier ventures with Silicon Valley resources,” and recently organized a meetup in San Francisco on ways to support entrepreneurship and development in Myanmar.
Myanmar's high rates of smartphone usage, compared to other developing countries, is partially due to the fact that the country never went through the feature phone phase when it was closed off from the outside world, he said. Similarly, the lack of internet fiber cable infrastructure presents room for other more sophisticated technologies, such as Wi-Fi mesh, he added. The country presents a blank slate for more recent technologies, especially in information communication technology or infrastructure, to scale rapidly, he said.
“Social entrepreneurship in Myanmar is exciting because it is a wide open field in terms of the problems to solve,” Matt Wallace, executive director of Opportunities NOW, a Myanmar-based social enterprise focused on financial literacy and education, told Devex via email.
But he added that a challenge is the staying power of social entrepreneurs, due in part to the fact that so many of these social enterprises are focused on niche markets. In order to have lasting impact, they will need to transform to mass markets or replicate their models.
“The sheer number and size of societal issues which require creative solutions and alternative business models necessitates that a successful social entrepreneur has a long runway to achieve success at scale,” he said.
An evolving sector
Myanmar has an unusually strong presence of social enterprises, explained Henrich Dahm, an independent private sector development expert based in Yangon, in a column published Monday in The Myanmar Times.
“In an environment like Myanmar, social enterprises can achieve social impact more efficiently than the government, more sustainably and creatively than not-for-profits, and more generously than business,” he said.
More systematic and long-term support, as well as increased cooperation between government, development partners, and enterprises, will be needed to support the rise of the social entrepreneurship sector beyond its nascent stage, he said.
Experts told Devex the global development community is well positioned to support a more favorable business environment, with the resources and networks startups need to scale, in order to unleash the potential of entrepreneurship to achieve health and development outcomes in Myanmar.
Raymond Guthrie, senior partner at the Global Innovation Fund, a nonprofit organization that invests in solutions for the poor in countries including Myanmar, told Devex he is bullish on the country. He recently returned to London from Myanmar, where he met with a number of “repats,” expatriates who are returning to their home country. He explained that because many of them have to focus on laying the foundations — addressing problems such as logistics, transportation, and infrastructure — the startup scene will not yet look anything like Kenya in two or three years’ time.
But the sector will continue to grow and develop even in the midst of crisis, he said.
“The needs aren’t going to stop,” he said. “The best entrepreneurs are still seeing those needs and figuring out ways to solve those problems.”
Barriers to scale
Q&A: Richard Geeves on the challenges and possibilities for education in Myanmar Education was neglected during years of turmoil in Myanmar. Now, challenges abound as the government aims to get back on track in the next five years. Devex spoke with Richard Geeves, senior education adviser for ChildFund Australia, which recently conducted research on the obstacles ahead.
In Myanmar, challenges present opportunities for social entrepreneurs. For example, education is one of the sectors that suffered most from decades of military rule. Transportation to and in rural areas is problematic, especially during the rainy season, which floods roads five months of the year. And the country is a cash- and paper-based economy. Entrepreneurs are capitalizing on the rapidly rising usage of ICT to bring new models to each of these sectors, but they face a number of barriers to scale.
“We believe that entrepreneurs here can contribute immensely to the country's development by scaling their businesses and benefiting large numbers of people. The challenge is helping the ventures grow into robust companies from the early stages of operations. This requires a good amount of hands-on guidance,” said Bradley Kopsick, an investor at Insitor Impact Fund, which focuses on the Mekong region and Indian subcontinent.
There have been a number of acceleration and mentoring programs launched to provide entrepreneurs with training to learn the intricacies of running a business. One example is Phandeeyar, a for-profit accelerator which the Silicon Valley-based philanthropic investment firm Omidyar Network supported with a $2 million grant towards a nonprofit social impact accelerator. Stories of social enterprises receiving investment and scaling up are likely to attract more entrepreneurs interested in running a social business, said Kopsick, adding he hopes to see more grant funding and small-scale investment so companies can conduct pilots and sharpen their business models.
An example of that is Koe Koe Tech, a Yangon-based IT social enterprise that is behind the “May May” application, the most popular maternal and child health app in the country.
In an interview with Devex at the Social Capital Markets conference in San Francisco this October, Lwin talked about the importance of grant capital for social entrepreneurs such as himself. He also said the presence of the international aid community in Myanmar, from donors to NGOs to social enterprises, could act as leverage on the country’s leadership to improve the situation in Rakhine state and elsewhere. Myanmar presents a great opportunity for agencies like Australia’s Department of Foreign Affairs and Trade, a major donor to Myanmar and Southeast Asia, to be “useful and innovative presences,” and now is a critical time for their support, he said.
“You’re already getting actors acting on individual incentives and not thinking what the big picture is,” he said. “But it looks like those of us trying to fight the good fight are making headway.”
Michael Lwin, co-founder of Koe Koe Tech, discusses the importance of grants through aid organizations when a more typical investment model does not function efficiently in the business's country
Funding limitations
The Koe Koe Tech team works closely with Population Services International, which has operated in Myanmar since 1995, and is one of the largest NGOs in the country. PSI explains that the health sector in Myanmar, where one quarter of the estimated population of 52 million people lives on less than $2 a day, has yet to catch up to the quickly growing economy. Part of the NGO’s strategy is to work with social enterprises, including Koe Koe Tech and Living Goods, which adapted its model of door-to-door entrepreneurs to create the Win-Win network of community health workers.
The challenge of working with donors and NGOs, though, is that funding is still predominantly short-term and project-focused, which demands regular reporting of impact metrics, and limits the flexibility and time that social entrepreneurs need to test ideas and build a business, said Liz Jarman, community health strengthening director at Living Goods.
“The premise of funding needs to shift so that social entrepreneurs are given the space to fail, innovate, and grow,” she said. “This means that donors need to think more like investors, and fund overheads and running costs rather than specific programs.”
Debbie Aung Din, co-founder of Proximity Designs, discusses how dignity and design unleashes prosperity for farmers.
How can dignity and design unleash prosperity for farmers in Myanmar? Debbie Aung Din is Co-founder of Proximity Designs, a non-profit social enterprise operating in Myanmar since 2004. Proximity designs, makes and sells products and services that provide a path out of poverty for rural families. These include small farm technologies and irrigation devices, rural financial services, and farm advisory services. Proximity operates a full-scale design lab in Yangon. Products are designed for extreme affordability and typically boost productivity and incomes by over $250, so families can afford basic necessities. Proximity has customers using products and services in over 9,000 villages in 175 townships across Myanmar.
This focus on program-based funding holds social enterprises back from becoming financially sustainable businesses, and distracts from what it takes to bring about systemic change in public health, Jarman added. She noted the difference between the metrics that donors and NGOs tend to focus on, such as the number of people trained or the number of children immunized, versus the metrics that represent systemic change, such as increased government ownership of health services.
“While there are a number of examples of donor support for mid to late stage social ventures, there are almost no donors willing to back social enterprises in early ideation stages,” Wallace of Opportunities NOW added. “Given the need for a long time horizon to prove concept and achieve sustainability, this limits the extent to which social enterprises can test and fail quickly as they search for their core business model. Donors just don't have much stomach for failure in the nascent Myanmar market.”
Prior to launching Proximity Designs, Aung Din did evaluations for the U.N. and assessments for the World Bank. When that work took her to Myanmar, she noticed a distorted power dynamic.
“The whole village came out and had a dog and pony show and it was very scripted,” she said. “And also I saw that when you give things away free in a village of 100 households and you can only provide for 30 or 40 households, the other households are trying to figure out how to get this free item.”
A culture of patronage has been developed in Myanmar, Aung Din said, but the younger generation is changing this dynamic of deference to the donor.
“Because Myanmar is coming out of isolation, I think there’s a real thirst and hunger for different ways of doing aid,” she said.
The 22 kt gold alloy is an English standard traditionally referred to as “crown gold”. Crown gold alloys had not been used in U.S. coins since 1834, with the gold content having dropped since 1837 to a standard of 0.900 fine for U.S. gold coins. For American gold eagles the gold fraction was increased again to .9167 or (22 karat). It is authorized by the United States Congress and is backed by the United States Mint for weight and content. The obverse design features a rendition of Augustus Saint-Gaudens’ full length figure of Lady Liberty with flowing hair, holding a torch in her right hand and an olive branch in her left, with the Capitol building in the left background. The design is taken from the $20 Saint-Gaudens gold coin which was commissioned by Theodore Roosevelt to create coins like the ancient Greek and Roman coins. The reverse design, by sculptor Miley Busiek, features a male eagle carrying an olive branch flying above a nest containing a female eagle and her hatchlings.
Even international news here! Therefore, FDI is not coming soon?
Foresee ideas unusual Homeland economic status? Than under the previous government, corruption and illegal want to laudry money with a cronies mosquito groups and foreigner chinese group after the political project edible played to real estate bubble is going to explode by soon market high risk market run out would be seen that warring arlam talking about by Mrs Serge Pun tycoon (FMI company's).
YANGON, Dec 5 (Reuters) - Private banks have welcomed a move by Myanmar’s central bank to allow them more time to clear most of their loan books, giving breathing space to lenders who had warned of a cliff-edge scenario that could have destabilised the financial system.
Myanmar’s central bank announced in late November that a maximum of three years - instead of the original deadline of six months - would be given to lenders to recover the mostly open-ended “overdraft loans” that make up the bulk of their lending. The move ends a tussle over regulations introduced in July to bring the country’s banks closer to international standards.
The decision came days after Reuters reported the authorities would back off from a demand that private banks clear most of their loans by January and that it would allow overdraft loans to be converted into three-year loans.
The central bank said the new rules allow banks to “collect their credit facilities smoothly” and “increase repayment capacity of their borrower”. Banks had complained they were given only six months to fix years of junta-era mismanagement and to recover most of their loans amid a sluggish economy.
“It’s good to move step-by-step towards Myanmar’s banking reform,” said Than Lwin, former deputy central bank governor and senior adviser at Myanmar’s largest lender Kanbawza Bank. “This gives some breathing space for banks.”
Myanmar’s leader Aung San Suu Kyi has made banking reform a priority for her administration, which faces sky-high expectations after sweeping to power in a 2015 election to end decades of isolation under military rule.
About 70 percent of Myanmar’s more than $9 billion lending pool is in the form of overdraft loans - typically made on preferential terms to lure customers and rolled over indefinitely. To end such practices, the authorities had previously asked banks to get all those loans repaid by January.
The follow-up instruction from November gives lenders more time to gradually reduce the proportion of overdraft loans on their books. It allows banks to keep such debt at 50 percent of their loan portfolio by July next year, and 20 percent by mid-2020.
But some banks said the new deadline remained challenging and they were seeking further discussions with the central bank over its impact on their businesses.
“It’s still a bit difficult to fulfil, but we are all trying to meet the deadline,” said Pyi Soe Htin, executive director of international banking for Yangon-based Asia Green Development Bank.
Myanmar’s central bank did not immediately respond to requests for comment.
“A LONG WAY TO GO”
Central bank officials had told Reuters they were concerned that pushing too quickly on reform could trigger volatility in the fledgling financial system. Myanmar’s banks are deeply entwined with one another and with a small group of well-connected businessmen close to the former ruling elite that dominate key sectors of the economy, from real estate to aviation.
Myanmar’s central bank deputy governor Soe Thein had said he feared the amount of bad debt on private lenders’ books was greater than has so far been reported to the authorities.
The new rules are an attempt to force lenders to deal with riskier loans in a banking sector that has remained poorly regulated.
Kim Chawsu, managing partner at Katalysts Investment Group and former chief financial officer of the parent company of lender Kanbawza Group, welcomed the compromise by the authorities, but said Myanmar still has “a long way to go” to tackle its debt pile.
“Sooner or later you do have to do the surgery anyway. You are just postponing the inevitable,” she said.
Myanmar banks have continued to lend largely on preferential terms to well-connected customers despite widespread political and economic reforms that began in 2011.
“We should speed up the reform process,” said a financial professional who has worked as a consultant to the central bank, who declined to be named due to the sensitivity of the matter. “The central bank should not make more concessions after this.”
(Reporting By Yimou Lee and Thu Thu Aung; Editing by Alex Richardson)
SIA unveils 'bedroom' suites, new economy class seats for A380s
SINGAPORE: "Bedroom” cabin suites and new seats that leverage on technology were among the changes unveiled on Thursday (Nov 2) by Singapore Airlines (SIA) for its revamped Airbus 380s.
The US$850 million (S$1.16 billion) cabin overhaul comes as SIA marked a decade of flying the superjumbos and as the national carrier carries out a review of its business amid stiffening competition.
The changes include a revamp to its first-class suites, which were reduced from 12 to six and moved from the lower to upper deck.
Apart from being “significantly more spacious”, each suite also offers more privacy with its sliding doors and electronically adjustable roller-blinds, said SIA’s chief executive officer Goh Choon Phong at the product launch.
SIA's new "bedroom" suite includes a Poltrona Frau leather chair. (Photo: Singapore Airlines)
The suites are also equipped with a 21-inch wide leather chair upholstered by Italian furniture maker Poltrona Frau, alongside a standalone full-flat bed with plush bedding and duvet designed by French luxury label Lalique.
Designed to feel like a “bedroom”, the revamped first-class suites will give passengers the options of both a bed and a seat, SIA's divisional vice-president for customer experience Betty Wong told Channel NewsAsia in an earlier interview ahead of the launch. Currently, the seat in the suite needs to be folded in for the bed to be made. Apart from “demand-supply considerations”, the changes to the suites will allow more efficient use of space in the aircraft, Mr Goh said.
After four years of research and development, the facelift includes an update of the first-class suites, as well as new seats and other cabin products across all classes.
Other updates include a change in the number of business class seats. The new A380s will have 78 business class seats on the upper deck, compared to previous configurations of 60 and 86. Tapping on new technology, the business class seats have a carbon fibre composite shell structure, compared to conventional aircraft seats which use metal as the primary support structure.
This creates a thinner base structure which allows for better optimisation of the seat and creates more under-seat storage space to accommodate a standard-size trolley bag, which Mr Goh said is a "first in the world". The seats can also recline directly into a full-flat bed of 78 inches, and the center divider can be lowered to form double beds.
SIA's new A380 business class seats. (Photo: Tang See Kit)
Meanwhile, the premium economy class will get its own exclusive cabin zone. With 44 seats, the premium economy section on board the new A380 will be SIA's biggest thus far.
Premium economy class seats on the new A380 will be housed in their own cabin. (Photo: Singapore Airlines)
In the economy class, seats will offer more legroom and back support, with a six-way adjustable headrest with foldable wings. The seats will also come with an 11.1-inch touchscreen monitor, personal storage space for small items, a coat hook, in-seat power supply and a footrest with adjustable positions. The new-look cabins also come decked with the latest in-flight entertainment system myKrisWorld, which includes features that are new in the industry. These include content recommendations based on customer preferences and viewing history, and KrisFlyer members being able to bookmark and resume content, as well as customise and save preferences on myKrisWorld for subsequent flights. “We are pushing the boundaries (with) new design concepts, new materials and new technologies but still focusing on how those innovation can bring greater comfort and convenience to our customers,” said Mr Goh.
More legroom and back support for economy class passengers on the revamped Singapore Airlines A380. (Photo: Singapore Airlines)
The research and development of the A380 cabin upgrades first began in 2013 and involved extensive customer feedback. The overhaul was a necessary move given rising expectations from travellers, according to Ms Wong. "Ten to 20 years ago, people may expect that when you get on board, you can get a bit less but somehow the expectations have changed. The gap between what you do on the ground and in the air has narrowed. That's difficult because your aircraft is a finite space so you get a lot more challenges in managing space and inventory,” she said.
New economy class seats feature an 11-inch touchscreen monitor. (Photo: Singapore Airlines)
The new cabin products will be fitted on the five new A380s that SIA has on order with Airbus, with the rest of the fleet scheduled to be retrofitted from now until 2020. Mr Goh said the airline’s “significant investment” on new cabin products demonstrates its commitment to continued investment in products and services, as well as a long-term approach to ensure SIA retains its leadership position and “confidence in the future of premium full-service air travel”. The first revamped A380, flight SQ221, will depart Singapore at 8.40pm on Dec 18 and arrive at 7.40am in Sydney the next day. Additional destinations will be announced in the coming months. Since entering into service with SIA in October 2007, the superjumbos have flown to airports including Beijing, Frankfurt, Hong Kong, London, Melbourne, Mumbai, New York and Paris.
Crude oil pipeline: 770.5km, gas pipeline: 793km (Myanmar section) and 1,727km (China section)
Output
22 million tonnes of oil and up to 13 billion cubic metres of gas per year
Expand
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The Myanmar-China Pipelines project comprises of the construction of two separate, parallel pipelines for transporting crude oil and natural gas from Daewoo International’s offshore blocks A-1 and A-3 in Myanmar, to China.
The project was first proposed in 2004 and took a leap when China National Petroleum Corporation (CNPC) signed a 30-year hydrocarbons purchase and sale agreement with Daewoo International in December 2008.
"The gas pipeline enables CNPC to import natural gas to China, while also helping Myanmar to supply gas locally."
The pipelines will enable CNPC to import natural gas to China, while also helping Myanmar to supply gas locally.
CNPC’s subsidiary, Southeast Asia Crude Pipeline Company, was assigned with the task of designing, constructing, operating and maintaining the crude and gas pipelines in 2009.
Construction on the Myanmar section of the pipelines began in June 2010, while that on the Chinese section started about three months later.
The gas pipeline was completed by May 2013, while the crude pipeline was 94% complete at that time.
The gas pipeline became fully operational in October 2013. The crude pipeline is expected to be completed by the end of 2013.
The estimated investment on the project is $2.54bn, including $1.5bn for the oil pipeline and $1.04bn for the gas pipeline.
Myanmar-China pipelines development
CNPC (50.9%) and Myanmar Oil and Gas Enterprise (MOGE, 49.1%) are investing in the crude oil pipeline, where as CNPC, MOGE, Daewoo International, KOGAS, Indian Oil and GAIL invested in the natural gas pipeline.
The pipelines will reduce China’s energy import costs and diversify its import routes.
CNPC currently ships crude oil to China through the Strait of Malacca, which is controlled by the US.
The Myanmar-China crude pipeline will reduce the reliance on the conventional shipping route and thus secure China’s energy security.
Route for the crude oil and natural gas pipelines
The gas pipeline is 2,520km long including the 793km Myanmar section and the 1,727km China section.
"The estimated investment on the project is $2.54bn, including $1.5bn for the oil pipeline and $1.04bn for the gas pipeline."
The pipelines start at Kyaukryu, on the west coast of Myanmar, where an oil terminal was constructed. The crude oil pipeline begins at Maday Island, whereas the gas pipeline begins at Ramree Island in Kyaukryu.
The pipelines run through the state of Rakhine, Magway, Mandalay and state of Shan, before entering the Ruli region in the Yunnan province of China.
The gas pipeline runs through Guizhou, Chongqing and Guangxi. The pipelines end at Kunming, the capital city of Yunnan province.
The crude pipeline will carry the crude oil that CNPC imports from Africa and the Middle East into China, via Myanmar.
The natural gas pipeline has a capacity to transport up to 13 billion cubic metres of gas per year. It reduces the coal consumption by 30.72 million tonnes and CO2 emissions by 52.83 million tonnes.
Myanmar-China pipelines design
The crude oil pipeline is designed to carry approximately 22 million tonnes of oil per annum.
The design capacity of the natural gas pipeline is 13 billion cubic metres. It is expected to deliver 12 billion m³ of gas to China every year, while reserving one billion m³ of gas for Myanmar’s domestic use.
Offshore source and pipeline infrastructure
The gas pipeline from Myanmar to China carries the gas extracted from Shwe gas project located offshore of the Bay of Bengal. The Shwe gas project is owned by a joint venture between Daewoo International, ONGC Videsh, MOGE, GAIL and Korea Gas Corp.
The associated infrastructure built for the Myanmar-China pipelines includes a 300,000t crude oil wharf in Beijing and a 650,000m³ reservoir at Maday Island for storage of water. The reservoir is the main source of water for the pipeline operation.
Contractors involved with the Myanmar-China pipelines project
China Petroleum ZhongZhou Engineering Project Management, a subsidiary of RH Energy, was awarded the pipeline inspection contract in September 2011.
The scope of the contract includes provision of engineering inspection to the Guangxi section of the pipeline.
Schneider Electric was awarded a contract in May 2013 to provide an engineering station control system for monitoring and managing the pipeline operations.
As part of the contract Schneider Electric will supply its OASyS enterprise control and monitoring system.
Shengli Oil & Gas Pipe Holdings is the supplier of pipes for the pipeline.
Talks between China and Myanmar on the feasibility of the project began in 2004. In December 2005, PetroChina signed a deal with Myanmar's Government to purchase natural gas over a 30-year period.[1] Based on this agreement, the parent company of PetroChina, China National Petroleum Corporation (CNPC), signed on 25 December 2008 a contract with the Daewoo International-led consortium to purchase natural gas from the Shwe gas field in A-1 offshore block.[2] The plan to build the oil and gas pipelines was approved by China's National Development and Reform Commission in April 2007.[3] In November 2008, China and Myanmar agreed to build a US$1.5 billion oil pipeline and US$1.04 billion natural gas pipeline. In March 2009, China and Myanmar signed an agreement to build a natural gas pipeline, and in June 2009 an agreement to build a crude oil pipeline.[4] The inauguration ceremony marking the start of construction was held on 31 October 2009 on Maday Island.[5][6] The Myanmar section of the gas pipeline was completed on 12 June 2013 and gas started to flow to China on 21 October 2013.[7][8][9] The oil pipeline was completed in Aug, 2014.[10]
Route
The oil and natural gas pipelines run in parallel and start near Kyaukphyu, run through Mandalay, Lashio, and Muse in Myanmar before entering China at the border city of Ruili in Yunnan province.[11][12] The oil pipeline, which eventually terminates in Kunming, capital of Yunnan province, is 771 kilometres (479 mi) long.[6] The natural gas pipeline will extend further from Kunming to Guizhou and Guangxi in China, running a total of 2,806 kilometres (1,700 mi).[12]
Description
The oil pipeline will have a capacity of 12 million tonnes of crude oil per year.[13] It would diversify China's crude oil imports routes from the Middle East and Africa, and avoid traffic through the Strait of Malacca.[12][14] Oil storage tanks will be built on an island near the port of Kyaukphyu.[15] For oil processing China will build refineries in Chongqing, Sichuan, and in Yunnan.[16] The gas pipeline will allow delivery of natural gas from Burma's offshore fields to China with an expected annual capacity of up to 12 bcm of natural gas.[12][17] The pipeline will be supplied from the A-1 and A-3 Shwe oil field.[18] China would start receiving natural gas from Burma's Shwe project through the pipeline in April 2013.[19] The Shwe, Shwe-Phyu, and Mya areas in the A-1 and A-3 blocks, estimated to hold 127–218 bcm of natural gas in total, are operated by a group led by Daewoo International Corp.[19] The operators group also includes Myanma Oil and Gas Enterprise, GAIL, and Korea Gas Corporation. The total project of pipelines is expected to cost US$2.5 billion.[15] In July 2014 CNPC celebrated the first anniversary of the launch of the Myanmar-China natural gas pipeline by announcing that nearly two billion cubic metres of gas has been piped from Indian Ocean plays onto the Asian continent.[20] A railway that will connect Muse and Lashio is part of the project. The railway will be 80 miles long and will include 41 bridges, 36 underground tunnels and 7 stations.[21]
Controversy
A number of protests in Burma and abroad took place against the construction of the pipeline.[22] The pipelines have sparked protests over environmental and safety concerns, and inadequate compensation arrangements for local residents. Critics have also said the contract, which was signed under the military regime, should be revisited and that Burma should not be exporting gas when three-quarters of the population lack electricity.[9]
Operating company
The project will be implemented jointly by China National Petroleum Corporation (CNPC) and Myanma Oil and Gas Enterprise (MOGE). CNPC will hold a 50.9% stake and manage the project, and MOGE will own the rest.[15]
KFC, until 1991 known as Kentucky Fried Chicken,[4] is an American fast food restaurant chain that specializes in fried chicken. Headquartered in Louisville, Kentucky, it is the world's second-largest restaurant chain (as measured by sales) after McDonald's, with almost 20,000 locations globally in 123 countries and territories as of December 2015. The chain is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains. KFC was founded by Colonel Harland Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky during the Great Depression. Sanders identified the potential of the restaurant franchising concept, and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC popularized chicken in the fast food industry, diversifying the market by challenging the established dominance of the hamburger. By branding himself as "Colonel Sanders", Harland became a prominent figure of American cultural history, and his image remains widely used in KFC advertising. However, the company's rapid expansion overwhelmed the aging Sanders and he sold it to a group of investors led by John Y. Brown Jr. and Jack C. Massey in 1964. KFC was one of the first American fast food chains to expand internationally, opening outlets in Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, it experienced mixed fortunes domestically, as it went through a series of changes in corporate ownership with little or no experience in the restaurant business. In the early 1970s, KFC was sold to the spirits distributor Heublein, which was taken over by the R.J. Reynolds food and tobacco conglomerate; that company sold the chain to PepsiCo. The chain continued to expand overseas, however, and in 1987, it became the first Western restaurant chain to open in China. It has since expanded rapidly in China, which is now the company's single largest market. PepsiCo spun off its restaurants division as Tricon Global Restaurants, which later changed its name to Yum! Brands. KFC's original product is pressure fried chicken pieces, seasoned with Sanders' recipe of 11 herbs and spices. The constituents of the recipe represent a notable trade secret. Larger portions of fried chicken are served in a cardboard "bucket", which has become a well known feature of the chain since it was first introduced by franchisee Pete Harman in 1957. Since the early 1990s, KFC has expanded its menu to offer other chicken products such as chicken fillet burgers and wraps, as well as salads and side dishes, such as French fries and coleslaw, desserts, and soft drinks, the latter often supplied by PepsiCo. KFC is known for its slogans "Finger Lickin' Good", "Nobody does chicken like KFC" and "So good".
Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana (near Louisville, Kentucky).[5] When Sanders was five years old, his father died, forcing his mother to work at a canning plant.[6] This left Sanders, as the eldest son, to care for his two younger siblings.[6] After he reached seven years of age, his mother taught him how to cook.[5] After leaving the family home at the age of 13, Sanders passed through several professions, with mixed success.[7] In 1930, he took over a Shellfilling station on US Route 25 just outside North Corbin, Kentucky, a small town on the edge of the Appalachian Mountains.[8] It was here that he first served to travelers the recipes that he had learned as a child: fried chicken and other dishes such as steaks and country ham.[8] After four years of serving from his own dining room table, Sanders purchased the larger filling station on the other side of the road and expanded to six tables.[9] By 1936, this had proven successful enough for Sanders to be given the honorary title of Kentucky colonel by GovernorRuby Laffoon.[10] In 1937 he expanded his restaurant to 142 seats, and added a motel he purchased across the street, naming it Sanders Court & Café.[11]
Sanders was unhappy with the 35 minutes it took to prepare his chicken in an iron frying pan, but he refused to deep fry the chicken, which he believed lowered the quality of the product.[12] If he pre-cooked the chicken in advance of orders, there was sometimes wastage at day's end.[5] In 1939, the first commercial pressure cookers were released onto the market, mostly designed for steaming vegetables.[13] Sanders bought one, and modified it into a pressure fryer, which he then used to fry chicken.[14] The new method reduced production time to be comparable with deep frying, while, in the opinion of Sanders, retaining the quality of pan-fried chicken.[12]
In July 1940, Sanders finalised what came to be known as his "Original Recipe" of 11 herbs and spices.[15] Although he never publicly revealed the recipe, he admitted to the use of salt and pepper, and claimed that the ingredients "stand on everybody's shelf".[16] After being recommissioned as a Kentucky colonel in 1950 by Governor Lawrence Wetherby, Sanders began to dress the part, growing a goatee and wearing a black frock coat (later switched to a white suit), a string tie, and referring to himself as "Colonel".[16] His associates went along with the title change, "jokingly at first and then in earnest", according to biographer Josh Ozersky.[17]
The Sanders Court & Café generally served travelers, so when the route planned in 1955 for Interstate 75 bypassed Corbin, Sanders sold his properties and traveled the US to franchise his chicken recipe to restaurant owners.[18] Independent restaurants would pay four (later five) cents on each chicken as a franchise fee, in exchange for Sanders' "secret blend of herbs and spices" and the right to feature his recipe on their menus and use his name and likeness for promotional purposes.[19] In 1952 he had already successfully franchised his recipe to his friend Pete Harman of South Salt Lake, Utah, the operator of one of the city's largest restaurants.[20]
Don Anderson, a sign painter hired by Harman, coined the name "Kentucky Fried Chicken".[21] For Harman, the addition of KFC was a way of differentiating his restaurant from competitors; a product from Kentucky was exotic, and evoked imagery of Southern hospitality.[21] Harman trademarked the phrase "It's finger lickin' good", which eventually became the company-wide slogan.[19] He also introduced the "bucket meal" in 1957 (14 pieces of chicken, five bread rolls and a pint of gravy in a cardboard bucket).[22] Serving their signature meal in a paper bucket was to become an iconic feature of the company.[22]
By 1963 there were 600 KFC restaurants, making the company the largest fast food operation in the United States.[18] KFC popularized chicken in the fast food industry, diversifying the market by challenging the established dominance of the hamburger.[23]
In 1964, Sanders sold the company to a group of investors led by John Y. Brown Jr. and Jack C. Massey for US$2 million (around US$15 million in 2013).[10] The contract included a lifetime salary for Sanders and the agreement that he would be the company's quality controller and trademark.[24] The chain had reached 3,000 outlets in 48 different countries by 1970.[25] In July 1971, Brown sold the company to the Connecticut-based Heublein, a packaged food and drinks corporation, for US$285 million (around US$1.6 billion in 2013).[26] Sanders died in 1980, his promotional work making him a prominent figure in American cultural history.[23] By the time of his death, there were an estimated 6,000 KFC outlets in 48 different countries worldwide, with $2 billion of sales annually.[27]
In 1982, Heublein was acquired by R. J. Reynolds, the tobacco giant.[22] In July 1986, Reynolds sold KFC to PepsiCo for $850 million (around US$1.8 billion in 2013).[28] PepsiCo made the chain a part of its restaurants division alongside Pizza Hut and Taco Bell.[29] The Chinese market was entered in November 1987, with an outlet in Beijing.[22]
In 1991, the KFC name was officially adopted, although it was already widely known by that initialism.[30] Kyle Craig, president of KFC US, admitted the change was an attempt to distance the chain from the unhealthy connotations of "fried".[31] The early 1990s saw a number of successful major products launched throughout the chain, including spicy "Hot Wings" (launched in 1990), popcorn chicken (1992), and internationally, the "Zinger", a spicy chicken fillet burger (1993).[32] By 1994, KFC had 5,149 outlets in the US, and 9,407 overall, with over 100,000 employees.[33] In August 1997, PepsiCo spun off its restaurants division as a public company valued at US$4.5 billion (around US$6.5 billion in 2013).[34] The new company was named Tricon Global Restaurants, and at the time had 30,000 outlets and annual sales of US$10 billion (around US$14 billion in 2013), making it second in the world only to McDonald's.[35] Tricon was renamed Yum! Brands in May 2002.[36]
By 2015, the company was struggling, having lost business to other retailers and being surpassed by Chick-fil-A as the leading chicken retailer three years previously. To combat this, the company launched a new initiative with a plan to revamp its packaging, decor and uniforms, as well as expanding its menu. Additionally, beginning in May 2015, a new series of advertisements was launched featuring Darrell Hammond as Colonel Sanders.[37] Subsequently, in a planned rotation of actors, Norm Macdonald, Jim Gaffigan, George Hamilton and Rob Riggle portrayed Sanders in similar ads through the fall of 2016.[38][39][40][41][42]
KFC world operations as of December 2014 Countries with KFC restaurants Countries planned to have KFC restaurants Countries that formerly had KFC restaurants
By December 2013, there were 18,875 KFC outlets in 118 countries and territories around the world.[1] There are 4,563 outlets in China, 4,491 in the United States, and 9,821 across the rest of the world.[1] Outlets are owned by franchisees or directly by the company.[47] Eleven percent of outlets are company owned, with the rest operated by franchise holders.[48] Although capital intensive, company ownership allows for faster expansion of the chain.[49]
Most restaurants are furnished with images of the company founder, Colonel Harland Sanders.[45] As well as dine-in and take-out, many stand-alone KFC outlets offer a drive-through option.[50] KFC offers a limited delivery service in a small number of markets.[50] Units include express concessions and kiosks which feature a limited menu and operated in non-traditional locations such as filling stations, convenience stores, stadia, theme parks and colleges, where a full scale outlet would not be practical.[50] Average annual sales per unit was $1.2 million in 2013.[51] Worldwide, the daily average number of food orders at an outlet is 250, with most occurring within a two-hour peak-period.[52]
As chairman and CEO of Yum!, David C. Novak ultimately has foremost responsibility for KFC operations.[2] Sam Su is chairman and CEO of Yum!'s Chinese operations, and Muktesh Pant is the CEO of KFC.[2] Richard T. Carucci is president of Yum!, and Roger Eaton is the COO of Yum! and the president of KFC.[2]
The company hopes to expand its African operations, where it is already the regional leader among US fast food chains.[53][54] The company is slowly expanding across the African continent, opening 70 outlets, but progress has been hampered by sourcing issues, such as a lack of quality suppliers.[49]
Asia
KFC continues to grow in Asia.
In Malaysia, the first KFC restaurant was opened in 1973 on Jalan Tunku Abdul Rahman.[55] There are 609 outlets as of June 2016.[56][57] In 1995, Projek Penyayang KFC was founded in an effort to provide food to more than 150 orphanages every quarter.[55]
In Sri Lanka, KFC was launched in 1995 at Majestic City. There were 25 KFC restaurants in Sri Lanka as of December 2014.[58]
In Singapore, the first KFC franchise was opened in 1977 along Somerset Road. In 1993, KFC Singapore was the first KFC in Asia to develop and launch the Zinger burger. KFC restaurants in Singapore are currently owned and operated by KFC (Malaysia) Holdings Bhd.[59]
In Bangladesh, the first KFC outlet was opened at Gulshan in 2006. As of June 2016, the country is home to 19 KFC outlets.[60][61]
In Taiwan, KFC entered the market in 1984 and opened its first store in 1985 in Taipei City. The 100th store in Taiwan opened in 1999. It was the second largest fast food chain restaurant in Taiwan until Mos Burger exceeded the number of branches of KFC in 2008. Now KFC is the third largest fast food chain restaurant with 137 stores as of 2017.[65]
KFC is the largest restaurant chain in China, with 5,003 outlets as of 2015.[66] They are operated by the Yum! China division. KFC became the first Western fast food company in China after its first outlet opened in Qianmen, Beijing, in November 1987.[67]
Local food items include rice congee and tree fungus salad, with an average of 50 different menu items per store.[67][68]
In December 2012, the chain faced allegations that some of its suppliers injected antiviral drugs and growth hormones into poultry in ways that violated food safety regulations.[69] This resulted in the chain severing its relationship with 100 suppliers, and agreeing to "actively co-operate" with a government investigation into its use of antibiotics.[67] KFC China sales in January 2013 were down 41 percent against the previous year.[70] To counter sluggish sales, the menu was revamped in 2014.[71]
In July 2014, Chinese authorities closed down the Shanghai operations of the OSI Group, amidst allegations that it had supplied KFC with expired meat.[72] Yum! immediately terminated its contract with the supplier, and stated that the revelation had led to a "significant [and] negative" decline in sales.[73]
KFC opens its first outlet in Tibet in March 2016.[74]
There are 350 KFC outlets in India.[66] The company has adapted the standard KFC offerings to Indian tastes[75] and the menu options in India include the Hot & Crispy Chicken and Fiery Grilled bucket options, Chicken Zinger Burger, Rice Bowlz, the more recently launched 5-in-1 Meal Box and a range of shakes called Krushers.[76] The business was refranchised in October 2015 after Yum concluded a year-and-a-half-long exercise to reorganize its business under larger, well-capitalized franchisees. In this regard, about a third of its outlets, operated by several of its franchisees, have been sold to a newly formed entity—Sapphire Foods India Pvt. Ltd. The new entity is owned by a consortium of four private equity funds, led by Samara Capital. The other investors are CX Partners, Goldman Sachs Group Inc. and a fourth fund, said a top executive at the local arm of the American food company.[77]
The first Indian KFC was a two-storey outlet on the fashionable Brigade Road in Bangalore in June 1995.[78] According to journalist Michael White, the company could not have chosen a "more difficult venue for its maiden entrée into the country".[79] Bangalore housed the headquarters of the Karnataka Rajya Raitha Sangha, one of the most influential, vocal and anti-foreign investment farmers' associations in the country.[79] The first outlet suffered protests from left wing, anti-globalisation and environmental campaigners, as well as local farmers, who objected to the chain bypassing local producers.[80] Many[quantify] Indians were concerned about the onslaught of consumerism, the loss of national self-sufficiency, and the disruption of indigenous traditions.[81] The protests came to a head in August 1995, when the Bangalore outlet was repeatedly ransacked.[78] The KFC outlet in Bangalore demanded, and received, a police van permanently parked outside for a year.[80] The outlet was closed on September 13, 1995 by local authorities, who claimed the company used illegally high amounts of monosodium glutamate (MSG) in its food.[82] The outlet re-opened a few hours later as the result of an appeal by KFC to the Karnataka High Court. The company stated the recipe was no different than that used in any other KFC store.[83] Rural activist M. D. Nanjundaswamy claimed KFC would adversely affect the health of the impoverished, by diverting grain from poor people to make the more profitable animal feed.[84] Environmentalist Maneka Gandhi joined the anti-KFC movement.[84] A second outlet opened in Delhi, but was closed by the authorities throughout November, purportedly for health reasons, but more likely to avoid a repetition of the Bangalore incident.[85] The Delhi outlet soon closed permanently.[86]
KFC began to expand outside of Bangalore in 2004,[87] with a localized menu that was the most extensive meat-free menu across the chain's worldwide operations. It introduced a vegetarian menu that included rice meals, wraps and side dishes and, like McDonald's, served eggless mayonnaise and sauces. Unnat Varma, marketing director of KFC India, states "The vegetarian offerings have made the brand more relevant to a larger section of consumers and that is necessary for KFC's growth." KFC also began using Indian spices and cooking techniques to localize its chicken dishes. By 2008–09, KFC operated 34 outlets in India.[88] In 2014, KFC launched the "So Veg, So Good" menu as part of an India-specific promotional strategy focused on enhancing their vegetarian range. The company has been up to a lot of innovation over the past few months with the launch of the first-ever no crust, all chicken KFC Chizza in December 2016.[89] More recently, KFC got Mumbai's dabbawalas to deliver its newly launched 5-in-1 Meal Boxes. The city's dabbawalas, famed for their efficient delivery of office lunches, took on the role of KFC delivery men as part of an innovative marketing campaign. They supplied specially created 5-in-1 meal boxes to some office-goers instead of their regular dabbas.[90] The innovation efforts have continued with the launch of the Watt a Box, a practical new take on the 5-in-1 Meal Box, which can also charge phones.[91]
In Indonesia KFC is the largest Western restaurant chain, with 466 outlets as of December 2013.[1][92] The chain has grown to hold an estimated 32 percent market share, and menu items include spaghetti, wraps and chicken porridge.[93] The master franchisee is PT Fastfood Indonesia.[94]
The first outlet opened in Jakarta in 1979.[94]Salim Group, Indonesia's largest conglomerate, became a major shareholder in 1990, which provided the company with funds for major expansion.[94] Its master franchisee, PT Fastfood Indonesia, was publicly listed on the Indonesian Stock Exchange in 1993.[94]
KFC Japan was formed in 1970 as a joint venture between the American parent and the Japanese Mitsubishi Corporation.[95] In December 1974, KFC Japan began to promote fried chicken as a Christmas meal.[96] Eating KFC as a Christmas time meal has since become a widely practiced custom in Japan.[97] As of 2013, Japan is the third-largest market for KFC after China and the United States with 1,200 outlets.[98]
In December 2007, Mitsubishi assumed majority control of KFC Japan in a JP¥ 14.83 billion transaction.[99]
Pakistan
KFC has a presence in eighteen major cities of Pakistan (Karachi, Lahore, Islamabad, Rawalpindi, Gujranwala, Sukkur, Muree etc.) with more than 65 outlets nationwide. Its first outlet was in Gulshan-e-Iqbal, Karachi. KFC Pakistan menu consists of burgers, fried chicken, nuggets, fries, rice dishes and drinks.[100]
As of December 2013, there were 784 KFC outlets in the United Kingdom.[1] British turnover was around £684.5 million in 2013, according to Technomic.[101] About 70 percent of outlets are run by franchisees, with the remainder company owned.[102] The company employs 24,000 people.[102] Around 400 sites are drive-through outlets.[102] Average outlet turnover is between £1 and £1.5 million.[102]
Annual sales amount to 60,000 metric tonnes of chicken, 60 percent of which is purchased from the four largest suppliers in the UK, including Faccenda Group[103] and 2 Sisters Food Group,[104][105] and delivered fresh to outlets at least three times a week.[106] The remaining 40 percent is sourced from companies in Europe, Thailand (including Charoen Pokphand Foods) and Brazil.[107] All of the Original Recipe chicken is sourced within the UK.[107]
England had the first overseas branch of KFC which opened in Preston, Lancashire in May 1965, and was the first American fast food restaurant chain in the country, pre-dating the arrival of McDonald's, Burger King and Pizza Hut by almost a decade.[108] Ray Allen, an experienced Lancashire caterer, was the first franchisee.[109] The first London branch opened in North Finchley in November 1968.[110] In 1971 there were 31 outlets; by 1975 the chain had grown to 250 outlets.[111] In the late 1970s and throughout the 1980s, KFCs began to introduce seating. KFC opened its first drive through restaurant in the UK in 1984.[112] By 1987 the company had almost 400 outlets.[113]
In May 1997, the "Tower Burger", a fried chicken fillet burger with the addition of a hash brown, was first launched in the United Kingdom.[114] In 2006, the company stopped pre-salting its fries and removed trans fats from its products.[102] In 2012 palm oil was replaced by rapeseed oil in the fryers.[102] Between 2004 and 2014, KFC UK increased its offering of "portable" foods: burgers, wraps and salads.[102] During that period, sales rose from around £500 million to almost £1 billion.[102] In 2012, KFC UK invested £9 million to install ovens in all of its outlets, so that it could offer griddled chicken.[102] In 2013, KFC rolled out Lavazza coffee across all of its UK outlets.[115] As of 2014, KFC UK is trialling serving only halal meat at 96 of its outlets.[116]
The first KFC in the Middle East opened in 1973 in Kuwait. Today there are over 700 outlets, certified halal, including the United Arab Emirates, Egypt, Qatar, Bahrain, Oman, Jordan, Lebanon, Morocco, Iraq, and Saudi Arabia.[117]KFC Israel existed from 1993 to 2013 and featured kosher restaurants.[118] In 2012 KFC opened in Ramallah in the Palestinian Authority[8] and later expanded to Hebron,[9] Bethlehem,[10] Jenin,[11] and three separate outlets in Ramallah: the Ersal Branch (Bacri), Plaza Mall Branch and Masyoun Branch.[119] In 2013 the New York Times reported that KFC was being smuggled into Gaza through tunnels.[120][121]
KFC sales in the United States in 2013 were estimated at $4.22 billion by Technomic.[122]
The basic model for KFC in the United States, not necessarily duplicated elsewhere, is a focus on low prices, a limited menu (29 items on average) and an emphasis on takeout.[48] A "very strong percentage" of sales come from African American customers.[123] Many KFC locations are co-located with either Taco Bell or Pizza Hut, or other Yum! restaurants.[50] When Yum! owned Long John Silver's and A&W Restaurants, these brands were often co-branded with KFC as well.[124] Often these locations behave like a single restaurant, offering one menu with food items from both restaurant brands.[125] In 2003, there were 354 KFC-Taco Bell combines, offering the full KFC menu and Taco Bell items, and 13 units offering the full KFC menu and a limited number of Pizza Hut items.[50] The concept originated in 1991, when a KFC-Taco Bell combination opened in Virginia.[22] Some locations were also opened as combinations of KFC, Taco Bell and Pizza Hut, but this failed to catch on, and Yum! CEO David Novak blamed a lack of franchisee commitment for its lack of success.[126]
Initially, Sanders and KFC used hydrogenated vegetable oil for frying, but in the 1980s the company began to switch to cheaper oils such as palm or soybean.[127][128] In the 2000s it became apparent that these oils contain relatively high levels of trans fat, which increases the risk of heart disease. By April 2007, the chain had switched to trans fat-free soybean oil in all of its US outlets.[129]
In 2008, Novak credited low US sales as being the result of a lack of new ideas and menu items.[130] The Spring 2009 launch of Kentucky Grilled Chicken only resulted in a temporary halt to the sales decline.[131] In 2010 KFC announced a turnaround plan that included improving restaurant operations, introducing value items and providing healthier menu options.[131] In the same year, Advertising Age noted that KFC was losing market share to its smaller chicken restaurant rival, Chick-fil-A.[132] In 2011 Bloomberg News referred to KFC US as "an also-ran to McDonald's Corp".[133] In 2012, Forbes magazine described how many of the KFC outlets were "aged and uninviting", and that the chain "hasn't introduced an exciting new food item in ages".[134]
KFC was described in 2012 by Bloomberg Businessweek as a "muscular player" in developing regions, specifically Africa, China and India, while noting its falling market share in the US to rivals such as Chick-fil-A and Popeyes.[135] Some analysts speculated that KFC would begin spinning off its ailing US operations.[135] That year, the company began divesting control of company-owned US restaurants to franchised operations, with the intention of reducing overall company ownership from 35 percent to 5 percent.[135]
There are over 600 KFC outlets in Australia, and around 100 in New Zealand.[98] KFC was the first American style fast food chain to open in both countries.[136] In 2013, KFC reported an annual turnover of almost 2 billion AUD for its Australia and New Zealand operations.[137]
Australia
Yum! directly operates 160 KFC outlets in Australia.[137] The largest of the 53 independent franchisees in Australia is Collins Foods, which operates 169 stores.[137][138] KFC's major poultry suppliers in Australia are Inghams, Steggles and Turi Foods.[137]
The first Australian KFC was opened in 1968 in Guildford, a suburb of Sydney.[139] The franchise was owned by a Canadian entrepreneur called Bob Lapointe.[140] Between 1970 and 1971, 75 outlets were opened.[140] This had a major impact on Australian chicken production, which increased by 38 percent during the period.[140] By 1995 there were 452 outlets, and the company employed 12,000 staff.[139] That year, Australia produced 35 percent of KFC's international earnings.[139]
New Zealand
The first KFC opened in New Zealand in 1971 at Royal Oak, a suburb of Auckland.[141] By 1980 there were 37 outlets.[136] In 1989, PepsiCo acquired the 50 percent stake in KFC New Zealand that it did not already own from the local Goodman Fielder conglomerate.[141] In 1991 New Zealand turnover topped 100 million NZD for the first time.[141]
KFC's core product offering is pressure fried, on-the-bone chicken pieces seasoned with Colonel Harland Sanders' "Original Recipe" of 11 herbs and spices.[142] The product is typically available in either two or three piece individual servings, or in a family size cardboard bucket, typically holding between 6 and 16 chicken pieces. Poultry is divided into 9 different cuts (2 drumsticks, 2 thighs, 2 wings, 1 keel, and a backbone-based breast cut divided into 2 pieces).[143] The product is hand-breaded at individual KFC outlets with wheat flour mixed with seasoning in a two- to four-minute process.[52][137]
It is then pressure fried for between seven and ten minutes (the timing differs between countries) in oil at 185 degrees Celsius.[52][144][145] Following this, the chicken is left to stand for 5 minutes in order for it to sufficiently cool before it is placed in the warming oven.[52] It is KFC policy to discard chicken if it has not been sold within 90 minutes, in order to ensure freshness.[52] The frying oil varies regionally, and versions used include sunflower, soybean, rapeseed and palm oil.[49] A KFC executive stated that the taste of the chicken will vary between regions depending on the oil variety used, and whether the chicken has been corn-fed or wheat-fed.[49]
As well as its core chicken on the bone offering, KFC's major products include chicken burgers (including the Zinger and the Tower burgers); wraps ("Twisters" and "Boxmasters"); and a variety of finger foods, including crispy chicken strips and hot wings.[146][147]Popcorn Chicken is one of the most widely available KFC products, and consists of small pieces of fried chicken.[148] In some locations, chicken nuggets are also sold.[149]
KFC adapts its menu internationally to suit regional tastes, and there are over three hundred KFC menu items worldwide.[48] Some locations, such as the UK and the US, sell grilled chicken.[150][151] In predominantly Islamic countries, the chicken served is halal.[52] In Asia there is a preference for spicy foods, such as the Zinger chicken burger.[152] Some locations in the US sell fried chicken livers and gizzards.[153] A small number of US outlets offer an all-you-can-eatbuffet option with a limited menu.[154]
In multiracial Malaysian markets, KFC also has different limited-time products to cater to different festive seasons such as Ayam Kicap Meletup for Eid al-Fitr seasons and Golden Treasures for Chinese New Year in 2015.
A number of territories, such as Japan, Jamaica, Trinidad, Barbados, Ecuador and Singapore sell fried seafood products under the "Colonel's Catch" banner.[155] In Jamaica, what was originally a seasonal offering for the Lent period was expanded to a year-round offering from 2010.[156]
McCormick & Company is KFC's largest supplier of sauces, seasonings and marinades, and is a long-term partner in new product development.[137]
Due to the company's previous relationship with PepsiCo, most territories supply PepsiCo products, but exceptional territories include Barbados, Greece, New Zealand, the Philippines, Romania, South Africa, and Turkey, which stock drinks supplied by The Coca-Cola Company, and Aruba, which stocks RC Cola from the Cott Corporation.[163][164][165][166] In Peru, the locally popular Inca Kola is sold.[167] In a number of Eastern European locations and Portugal, beer is offered, in addition to soft drinks.[168][169][170]
Launched in 2009, the Krusher/Krushem range of frozen beverages containing "real bits" such as Kit Kat, Oreo and strawberry shortcake, is available in over 2,000 outlets.[171] Egg custard tart is a popular dessert worldwide, but other items include ice cream sundaes and tres leches cake in Peru.[172]
In 2012, the "KFC am" breakfast menu began to be rolled out internationally, including such items as pancakes, waffles and porridge, as well as fried chicken.[173][174]
Sanders' Original Recipe of "11 herbs and spices" is one of the most famous trade secrets in the catering industry.[175][176] The recipe is not patented, because patent law requires public disclosure of an invention and provides protection only for a strictly limited term, whereas trade secrets can remain the intellectual property of their holders in perpetuity.[177]
A copy of the recipe, signed by Sanders, is held inside a safe inside a vault in KFC's Louisville headquarters, along with eleven vials containing the herbs and spices.[135][178] To maintain the secrecy of the recipe, half of it is produced by Griffith Laboratories before it is given to McCormick, who add the second half.[179]
In 1999, a couple who bought the house formerly occupied by Colonel Sanders found scribbled notes of purportedly the secret recipe. Initially KFC wanted to file a lawsuit against the couple to stop an auction of the notes, but by early 2001, it dropped the lawsuit, claiming the scribbled notes are "nowhere close" to the original recipe.[180]
Joe Ledington of Kentucky, a nephew by marriage of Colonel Sanders, claimed to have found a copy of the original KFC fried chicken recipe on a handwritten piece of paper in an envelope in a scrapbook. In August 2016, Chicago Tribune staffers conducted a cooking test of this recipe and claimed after a few attempts that, with the addition of MSG flavor-enhancer, Ac'cent, they produced fried chicken which tasted "indistinguishable" from the chicken they purchased at KFC.[181]
Equipment
KFC initially used stove-top covered cooking pots to fry its chicken.[182] In the 1960s, the officially recommended model was the L S Hartzog developed "KFC 20-Head Cooker", a large device that cost $16,000.[183] The Hartzog model had no oil filtration system, meaning that filtering had to be done manually, and the pressure fryers occasionally exploded, often causing harm to employees.[182] In 1969, inventor and engineer Winston L. Shelton developed the "Collectramatic" pressurized fryer to overcome the problems KFC faced in quickly frying chicken to meet growing customer demand. The Collectramatic used precision time and temperature controls and self-filtered the cooking oil – all while meeting Colonel Sanders’ legendary high quality standards.[182] Fred Jeffries, then vice president of purchasing at KFC, claimed that the invention helped fuel the company's rapid expansion and success:
There's no way it (KFC) could have grown like it did without the Collectramatic. Stores were doing about $200,000 a year in sales on average with the pots . . . but they could never have done the $900,000 a year it became without Win's fryer. He (Shelton) helped set the stage for that with true engineering thinking.[182]
Although a number of franchisees bought the Collectramatic, which had the support of Colonel Sanders from 1970 onwards, John Y. Brown had given tacit approval to franchisees to exclusively use the older L S Hartzog fryer, saying "Though those old pots were damn dangerous, at least we knew they worked! I was mostly afraid these new fryers would break down in the middle of business."[182] Brown warned franchisees that they were in violation of their contract if they used the Collectramatic.[182] Brown held his ground on the issue until he learned that his father, John Y. Brown Sr., who owned multiple KFC franchises, was successfully using the Collectramatic in every franchise he owned.[182] The issue was eventually resolved after Heublein purchased KFC, acquired Hartzog and nullified the contract.[183] The Collectramatic has been an approved pressure fryer for KFC from 1972 onwards.[183]
Colonel Sanders was a key component of KFC advertising until his death in 1980. Despite his death, Sanders remains a key icon of the company as an "international symbol of hospitality".[184] Early official slogans for the company included "North America's Hospitality Dish" (from 1956) and "We fix Sunday dinner seven nights a week".[185][186] The "finger lickin' good" slogan was used from 1956, and went on to become one of the best-known slogans of the 20th century.[187] The trademark expired in the US in 2006.[188] The first KFC logo was introduced in 1952 and featured a "Kentucky Fried Chicken" typeface and a logo of the Colonel.[189]
Advertising played a key role at KFC after it was sold by Sanders, and the company began to advertise on US television with a budget of US$4 million in 1966.[190] In order to fund nationwide advertising campaigns, the Kentucky Fried Chicken Advertising Co-Op was established, giving franchisees ten votes and the company three when deciding on budgets and campaigns. In 1969, KFC hired its first national advertising agency, Leo Burnett.[22] A notable Burnett campaign in 1972 was the "Get a bucket of chicken, have a barrel of fun" jingle, performed by Barry Manilow.[22] By 1976 KFC was one of the largest advertisers in the US.[191]
Since the beginning of the 21st century, fast food has been criticized for its animal welfare record, its links to obesity and its environmental impact.[192]Eric Schlosser's book Fast Food Nation (2002) and Morgan Spurlock's film Super Size Me (2004) reflected these concerns.[21] Since 2003, People for the Ethical Treatment of Animals (PETA) has protested KFC's choice of poultry suppliers worldwide.[193] The exception is KFC Canada, which signed an agreement pledging to only use "animal friendly" suppliers.[194] PETA have held thousands of demonstrations, sometimes in the home towns of KFC executives, and CEO David Novak was notably soaked in fake blood by a protester.[194] President of KFC's US division Gregg Dedrick said PETA mischaracterized KFC as a poultry producer rather than a purchaser of chickens.[195] In 2008, Yum! stated: "[As] a major purchaser of food products, [Yum!] has the opportunity and responsibility to influence the way animals supplied to us are treated. We take that responsibility very seriously, and we are monitoring our suppliers on an ongoing basis."[196]
In 2006, Greenpeace accused KFC Europe of sourcing the soya bean for its chicken feed from Cargill, which had been accused of clearing large swathes of the Amazon rainforest in order to grow the crop.[197]
In 2010, the Australian arm of KFC was accused of racial insensitivity over a television commercial showing an outnumbered white cricket fan handing out pieces of fried chicken to appease a dancing, drumming and singing group of black West Indies supporters. The clip found its way around the world on the internet, prompting stinging criticism in the United States where fried chicken remains closely associated with long-standing racist stereotypes about black people in the once segregated south.[198]
In May 2012, Greenpeace accused KFC of sourcing paper pulp for its food packaging from Indonesian rainforest wood.[199] Independent forensic tests showed that some packaging contained more than 50 percent mixed tropical hardwood fiber, sourced from Asia Pulp & Paper (APP).[200][201] APP said such fiber can be found in recycled paper, or: "It can also come from tree residues that are cleared, after a forest area has become degraded, logged-over or burned, as part of a sustainable development plan. APP has strict policies and practices in place to ensure that only residues from legal plantation development on degraded or logged-over forest areas and sustainable wood fiber enters the production supply chain."[200] KFC said: "From a global perspective, 60 percent of the paper products that Yum! (our parent company) sources are from sustainable sources. Our suppliers are working towards making it 100 percent."[199]
In December 2012, the chain was criticized in China when it was discovered that a number of KFC suppliers had been using growth hormones and an excessive amount of antibiotics on its poultry in ways that violated Chinese law.[202] In February 2013, Yum! CEO David Novak admitted that the scandal had been "longer lasting and more impactful than we ever imagined."[202] The issue is of major concern to Yum!, which earns almost half of its profits from China, largely through the KFC brand. In March 2013, Yum! reported that sales had rebounded in February, but that lower sales in December and January would result in a decline in same-store sales of 20 percent in the first quarter.[203]
In 2017 KFC was fined £950,000 after two workers were scalded by boiling hot gravy. The company admitted to charges of failing in a duty of care to employees, and was ordered by Teesside Crown Court to pay fines of £800,000 and £150,000.[204]
In 2017 KFC paid 500,000 HUF (~1900 USD) to a charity chosen by a journalist, who was beaten by the security guard of a KFC in Budapest, Hungary.[205] KFC reacted professionally, fired the security guard and paid the requested amount, that the journalist offered to charities. Protests broke out in front of this Hungarian KFC and the bad publicity pressured KFC to act.
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Warner, Melanie (July 11, 2005). "Diners Walk Through One Door and Visit Two Restaurants". New York Times. Retrieved December 29, 2007. Yum's multibranded stores have two illuminated logos, but they function as one restaurant. They have combined kitchens, a single line of cashiers and a staff trained to prepare both sets of menu items.
Yaziji, Michael; Doh, Jonathan (2009). "Case illustration: PETA and KFC". NGOs and Corporations: Conflict and Collaboration. Business, Value Creation, and Society. Cambridge University Press. pp. 112–114. ISBN978-0-521-86684-2.
So Many Chinese friends only single boy or girl ,This sense of edible Chinese one baby born here because don't know how to felt the good brothers and sister are not causing me .....
When Kati Pohler was three days old she was left at a market in China. She was later adopted by an American family. When she was 20, Kati discovered her birth parents had left her a note, and that every year on the same day, they waited for her on a famous bridge in Hangzhou.
This is the amazing story of one daughter, two families a world apart, and a reunion 20 years in the making.
Who'd be abandoned the market in China has adopted a girl American couple. See you back more than 20 years old and native parents in favor of China. their lives.
See story Fantasy have been able to watch.
# # BBC China: https://www.facebook.com/?ref=tn_tnmn
Companies in Vietnam inject substances to shrimps in order to increase sales. Vietnam is one of the top 5 exporters of shrimps, which are the most consumed sea animal in the world. Even though animal flesh is known to be unhealthy, it seems that these days it's more dangerous than ever...
Self-balancing, fully-electric two-wheeled vehicle that combines the romance and efficiency of a motorcycle with the safety and comfort of a car. The gyro stability system makes the C-1 as easy to drive as a car, and just as safe. All the comforts and safety features you expect in a car, but the small size and agility of a motorcycle. 200 miles per charge, 100+ mph top speed, 0-60 in ~6 seconds. BMW Self Driving Motorbike World Premiere BMW Vision 100 Motorbike Review BMW Autonomous CARJAM Bike of the FUTURE: Self Balancing Honda VS Bmw Motorrad VISION NEXT 100 Motorcycle BMW Vision 100 Self Driving Motorbike REVIEW BMW Vision 100 Self Balancing Motorbike Review BMW Autonomous Bike Watch in UltraHD + SUBSCRIBE #CARJAMTVCARJAM TV - Subscribe Here Now https://www.youtube.com/user/CarjamRa...Like Us Now On Facebook: http://www.facebook.com/CarjamTVFor The World's Best Car Videos Website: http://www.carjamtv.comCARJAM TV: WORLD’S BEST CAR VIDEOS BMW Motorrad VISION NEXT 100: What kind of world will be home to the BMW Vision 100 motorcycle of the future? “Normally, when we develop a motorcycle, we tend to think 5 to 10 years in advance. On this occasion, we looked much further ahead and found the experience especially exciting. There are some very attractive prospects. I firmly believe the BMW Vision 100 Motorbike sets out a coherent future scenario for the BMW Motorrad brand”, explains Edgar Heinrich. When designing the BMW Motorrad VISION NEXT 100, the team was thinking decades in advance. In tomorrow’s world, connectivity and digitalisation will be all-encompassing. Most vehicles will be driverless, and life will be organised largely by digital services. More and more of the world’s population will be living in urban areas. Digital technologies for an analogue experience. Building on the benefits of the digital world, the BMW Self Balancing Motorcycle VISION NEXT 100 takes the analogue riding experience to a completely new level. The BMW Self Balancing Motorcycle unique sensation of freedom is made possible by intelligent connectivity between rider, bike and the outside world – a combination that also allows the prediction of critical situations on the roads. In conjunction with the active assistance systems, these connected elements help keep riders of the BMW Self Balancing Motorcycle Motorrad VISION NEXT 100 in complete control of their ride. As well as anticipating what lies ahead and alerting the user when action is needed, they offer active rider protection and will consign the helmets and body protectors of today to the history books. “Self-balancing” – active, intelligent assistant systems. In certain situations, the active assistance systems of the future will also enhance stability and safety by automatically balancing the motorcycle, both out on the road and when stationary. Novice riders will benefit from additional guidance in all riding situations and from a bike that will never tip over. The BMW Self Balancing Motorcycle VISION NEXT 100 rights itself while even stationary, remaining upright when the rider has dismounted. The BMW Self Driving Motorbike balancing systems also work out on the road to ensure a particularly agile and dynamic riding experience with even lighter handling, which seasoned riders will appreciate, and all the benefits of assistance systems to enhance their capabilities even further. The BMW Motorrad VISION NEXT 100 helps every biker become more proficient and enjoy an even more positive riding experience. Every trip becomes a journey of freedom, from beginning to end. The “Digital Companion” – connected. Ubiquitous. Discreet. When combined, the BMW Motorrad VISION NEXT 100 bike and the special rider’s gear that has been designed to accompany it form a single functional unit: a Digital Companion that provides the situational information and active support the rider needs. But because biking is essentially about the experience, the Digital Companion remains in the background: though constantly active, it works away unnoticed until required to issue an alert via the user interface or provide active assistance, for instance. Unless the rider or circumstances require it, the Digital Companion remains silent.
NLDgovernmentweakens therule of lawduring the periodupuntiltodayfeaturessection,Getting toimprove thejusticesystem, the situationisnohumanrightslawyerRobert San Aungsaid.Congressisaskedto meet.Image may be NSFW. Clik here to view.
Lyrics: escape plan Composer: Escape plan Arranger: Lupo Groinig
Can you hear the brightest star in the night sky? The lonely and sighing of the heart of those looking upward
Whether the brightest star in the night sky can remember I walked with my colleagues disappear in the wind figure
I pray Have a transparent heart and tearful eyes Give me the courage to believe again to lie to hug you
Whenever I can not find the meaning of existence Whenever I lost in the dark The brightest star in the night sky please light me forward
Whether the brightest star in the night sky knows Where have you been with me?
Whether the brightest star in the night sky cares Is the sun first or accident first come
I pray More more detailed lyrics in ※ Mojim.com magic mirror lyrics network Have a transparent heart and tearful eyes Give me the courage to believe again to lie to hug you
Whenever I can not find the meaning of existence Whenever I lost in the dark The brightest star in the night sky please light me forward
The brightest star in the night sky please light me forward The brightest star in the night sky please light me forward
The brightest star in the night sky please light me forward The brightest star in the night sky please light me forward
I do not want to forget your eyes Give me another courage to embrace you
I can not find the meaning of existence I lost in the night The brightest star in the night sky please light me forward.
G.E.M.鄧紫棋 - 喜歡你(EDM Mix) Heroes Of The World II G.E.M. -DVD - Like You (EDM Mix)Image may be NSFW. Clik here to view.
KBZ offers Myanmar citizens loans and overdrafts, in order to promote development, increase business growth and to develop working capital within the country.
in maximum to all smalland medium-scale enterprises without any mortgages,
Yoma Bank is committed to supporting SME development in Myanmar. We believe that small business is the backbone of Myanmar’s economy providing better services and products as we emerge from decades of isolation. We also believe the SME are viable, commercial enterprises that deserve the respect and high level of service that a larger, corporate, client may demand. Our goal is to support the development of SME into larger, sustainable businesses that can expand nationally and across the ASEAN region.
