MYANMAR Golden Star Group of Companies (MGS Group), which is engaged in beverages, banking and microfinance, has expanded its business portfolio by prioritising hospitality and real estate.
Thein Tun, founder of MGS Group and chairman of Tun Commercial Bank, said in a recent interview that real estate is the company’s most profitable line of business, as it is now working on housing projects and building hotels and serviced apartments.
He refused to reveal investment ad revenue figures but was proud to say that his firm was among the top taxpayers in Myanmar.
“At this point, we will keep our eye on serviced apartments and hotels. We plan to build a US$18-million (Bt600 million) property in Yangon after opening a 50-room hotel in Inle Lake,” he said.
Both hotels would be completed in two years, and the Yangon property would accommodate more than 200 rooms, he said.
On Thursday, the firm set foot in the hospitality business with the grand opening of Bagan Star hotel, a three-star property with 81 rooms.
“We chose Bagan because it is the most active tourism destination in Myanmar due to its historical and archaeological value. Bagan attracts a lot of tourists, and we are happy to take part in making it developed further,” he said.
“Actually, we intended to open it during the previous government term.
“Unfortunately, it was one of the 25 hotels not allowed to open at that time, due to some requirements. So we are extremely happy to see it operational under the democratic government.”
The hotel charges $70 for deluxe rooms and $120 for suites, locals and foreigners alike. It has a workforce of nearly 50 employees, 90 per cent of whom come from Bagan and nearby villages.
Thein Tun hired Australian experts to train the staff and manage the hotel. He expects 60 per cent occupancy this year, which is forecast to rise over time as the firm is focusing on marketing.
The firm needs to invest for five to 10 years to gain profits in the far future despite some improvements in the nation’s legal framework, he said.
“Tourism is yet to become a profitable business here. But in the long run, it will definitely be profitable. Just look at other Asean countries.
“Thailand received more than 34 million tourists while Malaysia welcomed over 29 million, and Singapore 16 million last year. Even Cambodia received over 8 million tourists.
“But we only received less than 4 million. That shows we have a lot of room for improvement,” he said.
The 81 years-old tycoon seems fairly satisfied with the expansion of business under Myanmar’s first civilian government.
“Some businesses have been stalled a bit during this government term. But it is usual to take time when we change from a system to another. We must be patient,” he said.
“It is always better to stand on our own feet rather than hoping for the government’s support.”
The company remains profitable in its major businesses except airline and media. It currently holds 49 per cent stake of Carsberg beer and 30 per cent of Pepsi.
The firm’s microfinance business has over 40,000 customers nationwide, and Tun Commercial Bank has grown to 25 branches with over 850 employees across the nation.
He considers mining, retail, packaging industry, food and beverages, and restaurants as the most promising sectors in the future. Yet, he seems worried about the future of his bank due to the entry of foreign banks, on top of struggling in the aviation market.
Currently, the firm has no plan to be listed on the Yangon Stock Exchange despite his willingness.
“We need to prepare a lot to meet international standards. We are still at the preparation stage,” he said.
Source : Eleven Myanmar
