Japanese delivery giant joins Myanmar to ride on a booming logistics market

Operations in Myanmar are necessary for any regional cross-border trade network in ASEAN.

Japan's largest door-to-door delivery business will start offering warehousing, cross-border transport and freight forwarding services in Myanmar very soon, as the country is increasingly integrated with the regional supply chain.

Tokyo-headquartered delivery giant Yamato Group, through its Singapore-based subsidiary Yamato Asia Pte Ltd, and domestic firm Aye International Group Co (AIG) formed joint venture Yamato Global Logistics Myanmar Co last December. Back in 2015, Yamato Asia set up a branch office in the country, which paved way for its JV.

Yamato Group told The Myanmar Times that, starting from April 1, the JV will provide logistics solutions for imports and exports between Japan and Myanmar and beyond. Yamato Myanmar will focus on freight forwarding services, overseas home relocation services, cross-border truck transport services and warehouse services. It will seek to support manufacturers producing consumer goods and industrial goods for the procurement and delivery of finished products, as well as offering relocation services for those employees. The target will be trade between Myanmar and the island country as well as within ASEAN, with an emphasis of Thai-Myanmar supply chain.

“Our main target will be the B-to-B market [business-to-business market], such as production goods market, consumer goods market, and B-to-B logistics such as procurement and delivery.

“We think our challenge will be how we can differentiate ourselves compared to our competitor, by providing added value to our forwarding businesses,” Yamato group said. 

The JV involves an initial capital of US$500,000. Yamato Asia contributes $400,000 and owns 80pc of the stakes while AIG covers $100,000 and holds the remaining 20pc. AIG is a domestic logistics and trading business based in Yangon with an authorised capital of K100 million..

Myanmar-Thailand supply chain

Apart from the country’s economic growth and burgeoning domestic market, the delivery giant attributed Myanmar’s USP as being an essential part of supply chain with Thailand, integrating into a regional industrial centre. 

“With its geographical advantage, Myanmar has become an important part of the supply chain with Thailand which is deemed as an industrial hub in ASEAN,” Yamato explained, adding that the developments in Thilawa Special Economic Zone (SEZ) in southern Yangon have drummed up foreign direct investments and contributed to the timing of its JV.

Earlier this year, Thilawa-based Daizen Myanmar, another Japanese logistics pioneer, started providing bonded warehouse services to both domestic and international companies. This move is expected to help the SEZ become the regional manufacturing and logistics hub, boost Thai-Myanmar cross-border trade and accelerate Myanmar’s integration with the regional economy.

In fact, Yamato stressed that the ASEAN trade and logistics integration is a key factor behind its JV. With the ASEAN Economic Community introduced in 2015, a cross-border network in the region is emerging and the Japanese delivery firm believed it is necessary to have a base in Myanmar in order to tap into cross-border opportunities and the regional logistics market.

ASEAN game

Yamato, the largest parcel delivery company in the island country, has expanded actively in ASEAN and China in recent years. 

The delivery giant crossed the East and South China Seas to expand onto the continent in 2010, when it began parcel delivery services in Shanghai and Singapore, and subsequently in Hong Kong. In 2016, the firm invested in Petaling Jaya-based GD Express Carrier, a Malaysian express delivery business. Last year it set up a JV with Thailand’s Siam Cement. In January, it announced the opening of a specialised store which sells Japanese agricultural and fishery products in the Bangkok Tokyu Department Store Paradise Park in Thailand, The firm manages the transport operations for this store.

In Hong Kong, the company is the municipal government’s authorised carrier for wine, which needs fixed-temperature delivery.

Yamato will begin operating a forwarding service and relocation service in Indonesia this month through Yamato Indonesia Forwarding, a joint venture with Indonesian distributor Multisarana Bahteramandiri, following Jakarta’s decision to ease regulations for foreign companies to gain access to the domestic logistics market. 

Last October, The Myanmar Times interviewed Katsuhiko Umetsu, chair of Yamato Global Logistics Japan Co (part of Yamato Group), who spoke about the future of e-commerce industry and the challenges facing cross-border logistics in the region.