THE maroon hot-air balloons which carry tourists over Bagan—an ancient city teeming with crumbling red-brick temples—are famous in Myanmar. The fleet belongs to one of the country’s best-known tycoons. Since the pariah nation began to open up in 2011, Serge Pun has gradually transformed an empire built on property into a conglomerate with interests in tourism, consumer goods and other industries. His firms have become favourite partners for foreign multinationals.
Mr Pun is an atypical character in Myanmar’s business scene. He spent his teenage years in China, his family having left Myanmar after the army’s coup in 1962. During the Cultural Revolution Chinese authorities sent him to a re-education camp. He returned home in the early 1990s after starting his own property firm in Hong Kong.
He owns two flagship companies, First Myanmar Investments (which became the first company to list on Myanmar’s new stock exchange in March) and Yoma Strategic Holdings, which is listed in Singapore. Both hold stakes in a number of housing developments, whose value Myanmar’s opening has greatly boosted.
Most Burmese companies are banned from forming partnerships with Western entrepreneurs, because they remain subject to sanctions imposed by the American government, designed to punish the army’s cronies. But Mr Pun’s firms never appeared on the sanctions list. His businesses kept their noses clean during years of military rule. At the time this rigour cost them dear in terms of deals, he says. Now their reputation for honest governance appeals to multinationals. It has also helped them to hire Western-educated exiles from Myanmar, who are increasingly choosing to return.
Recent tie-ups with foreigners include plans by First Myanmar to invest in a network of hospitals in partnership with Lippo group, an Indonesian conglomerate. A bank of Mr Pun’s plans to launch a mobile-payments system in partnership with Telenor, a Norwegian telecoms firm. Yoma has acquired, from Yum! Brands, the American owner of Pizza Hut, Taco Bell and KFC, the right to operate the fried-chicken chain in Myanmar. The company is also distributing tractors from New Holland Agriculture, an Italian-owned maker of agricultural equipment (whose parent is controlled by Exor, whose chairman sits on the board of The Economist’s own parent company), which should benefit from the mechanisation of Myanmar’s farms.
The future is still unpredictable. Foreign interest in Myanmar slowed ahead of a general election last November, and remains subdued as outsiders wait to see how the new government (led by Aung San Suu Kyi, a longtime democracy activist) will run things. The property market recently softened, and is only now reviving. Meanwhile, the authorities forced all high-rise construction in Yangon, the biggest city, to halt for an inspection of permits granted under the old regime, adding to worries that the government’s plans to boost business and the economy are still vague. But Mr Pun’s well-connected businesses look sprightlier than most.
Source: The Economist Newspaper
