German companies in Myanmar struggle to meet investment targets

German companies in Myanmar struggle to meet investment targets
German companies in Myanmar are scaling down further investments and expansion plans as COVID-19 continues to play out across the country as well as the rest of the world.

The Delegation of German Industry and Commerce in Myanmar (AHK) recently released its business outlook survey report – AHK World Business Outlook 2020.Results for Myanmar – measuring business confidence and the impact of the coronavirus on German companies in Myanmar.

Conducted in June, the survey is based on the feedback from German companies that are either members of the AHK or within the network of a delegation or representative office via a bilateral business organisation.
Results showed about two thirds of the companies surveyed plan to reduce investments compared to before COVID – 19, due to challenging conditions and lack of confidence in hitting their targets for growth and revenue.
Only 6.7 percent of German companies in Myanmar surveyed are planning higher investments in the months to come compared to before the pandemic.

The majority of German companies in Myanmar expect the economy to recover by next year at the earliest, while 46.7pc in the survey expect an economic recovery
will take longer. Only 6.7pc expect recovery in the course of 2020.
More than two thirds of the companies see the lack of business support measures as the main challenge to overcome the current economic crisis.

“The support measures provide a number of very interesting incentives and are certainly perceived as helpful but 75pc of the companies who responded in the survey also suggested that the measures might not be enough to overcome the crises and would hope for more support,” Martin Klose, Delegate of German Industry and Commerce in Myanmar, said. Still, more than 86pc indicated that they are committed to Myanmar as a permanent location for business.
Total trade volumes between Myanmar and Germany surpassed US$820 million in fiscal 2018-19.

This year, Myanmar exported a total of US$620 million worth of goods, mainly garments and textiles, to Germany. It imported a total of US$190 million worth of goods, mainly machinery and pharmaceutical products from Germany
Meanwhile, five other German businesses have invested US$34 million worth of investments in Myanmar to-date, according to the Directorate of Investment and Company Administration. The largest investment by a Germany company in Myanmar is Metro Wholesale, which has channeled approximately US$10 million into its
retail operations in the country

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Source: Myannmar Time

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