Listed on the Main Board of the Singapore Securities Exchange Trading Limited (SGX-ST), Yoma Strategic Holdings Ltd. is a leading business corporation with real estate, consumer, automotive, agriculture & logistic and tourism businesses in Myanmar. Together with its partner, the SPA Group, the Group is taking a conglomerate approach to build a diversified portfolio of businesses in Myanmar. The Company was ranked in the top 10% of the Governance and Transparency index 2015, ranked 17th out of top 100 largest Singapore companies in the Asean Corporate Governance Scorecard 2015 and won the Best Managed Board (Silver) Award at the 10th Singapore Corporate Awards in 2015.
Myanmar is today one of the world’s fastest-growing economies according to the International Monetary Fund and the Asian Development Bank (“ADB”) projects the country’s GDP to grow by 8.6% this year. Foreign direct investment (“FDI”) in Myanmar grew from US$8.0 billion in fiscal year 2015 to US$9.4 billion in fiscal year 2016 and Myanmar’s Directorate of Investment and Company Administration estimates that their FDI target of US$6.0 billion for the current year will be exceeded. The demand for infrastructure investment is very high, with the ADB estimating that US$120 billion will be needed. Consumer spending too is on the rise as the economy strengthens following its liberalisation, fuelled by Myanmar’s young population and people’s increasing purchasing power. This is of great interest to Asian and multinational companies looking for new growth markets. The telecommunications sector continues to see fast growth, especially with a fourth mobile operator licence being issued. Today Myanmar has a mobile penetration rate of about 63%, and a large portion of the population uses smartphones. The government’s telecommunications master plan envisages approximately 90% of the population being digitally connected via mobile phones, 85% having internet access and half having high-speed internet by 2020. So, as Myanmar’s economy continues to develop and grow, we are well positioned to grow our core Real Estate, Automotive & Equipment, and Consumer business segments in tandem.
Personally, I believe that the new government’s emphasis on a measured approach to sustainable economic development for Myanmar with a focus on national reconciliation, peace and rule of law is a good one. They have been cautious not to let enormous public and international expectations push them into knee-jerk actions and ill-advised policies, and have settled into a cooperative alliance with the military, rather than adopting an adversarial approach. This strategy is prudent and pragmatic. With all these positive developments, the country is also slowly being re-integrated into the global economic system. In May 2016, there was a liberalisation of sanctions by the United States with a lifting of restrictions on certain Myanmar banks and amendments to the general licences authorising trade-related transactions. I surmise that a complete lifting of all sanctions will require a little bit of time. Optimism aside, the challenges the new government faces are significant. The economy is still very narrowly-based with growth dependent on resource exports, construction and tourism. There is also high inflation which is a natural occurrence of a fast growing economy, although it is expected to ease slightly this year. However, this also means that numerous opportunities exist in this emerging economy scenario and the Group is monitoring the business environment very closely. We are making prudent decisions that are within our means, and are working with a host of international partners to leverage on their expertise and financial resources, while we supply the local market know-how.
As mentioned in previous years, we believe the key to taking the Group forward lies in identifying, grooming and empowering talents. We continue to bring in expatriates with sound expertise and practical experience to guide our various businesses and to develop the next tier of local management. I am also proud that we have also been able to attract more than our fair share of repatriate talent, while simultaneously training up local staff. We have been investing in staff training at all our business units and have a monthly management meeting whereby the different managers across the Group meet to share ideas and experiences, in the spirit of learning from each other. These sessions also allow us to identify different talent that can be cross-deployed across the Group. In summary, we have been intensely focused on developing professional management teams to lead our respective business units. For example, the establishment of a dedicated corporate office for our KFC business has enabled us to be more efficient in terms of operational oversight and the rapid roll out of new stores. The same can be said for our New Holland tractors and fleet leasing businesses.
The Group will continue its efforts on corporate governance and will continue to build upon our track record, including our policy of zero tolerance on corruption. This has allowed us to build a strong reputation domestically and internationally and has facilitated the interest from many international parties wanting to work with us. Today, we continue to benefit from our investment in corporate governance and believe that it will continue to pay off in the long term. Yoma Strategic was ranked 17th in the ASEAN Corporate Governance 2015 rankings, up from 18th ranking in the previous year. Our affiliate, SPA, was also recognised as the Most Transparent Company by Myanmar Center of Responsible Businesses at 2015. These rankings give us the encouragement to persist on this path of corporate development. It is to be noted that the recent appointment of Ms Wong Su-Yen as a Non-Executive Independent Director has not only provided us an expert in areas including strategic talent development, organisational transformation and operations re-design, but also helped to improve Board diversity. Our other new appointment, Dato Timothy Ong Teck Ming, also brings to our Board his strong business expertise and unique international insight.
Over the past year, we worked on refining our Corporate Social Responsibility (“CSR”) programs. We continue to sponsor and organise the annual Yoma Yangon International Marathon (“YYIM”) in conjunction with the Yangon City Development Committee. Since its inception in 2013, YYIM has gone from strength to strength and today, is part of the sports and social calendar of the city. In January 2016, there were 6,022 runners which is a 44%-increase compared to last year. All funds raised from the YYIM registration fees were donated to three adopted charities for the provision of education and healthcare for underprivileged Myanmar children. To extend our CSR reach, we partnered with the Myanmar Business Coalition on Aid (“MBCA”), a non-profit organisation, to distribute water filtration systems to villages in the Mrauk U area of Rakhine State as part of the flood relief efforts. We also worked together with MBCA to promote sustainable responsible business practices through seminars and workshops held for Small and Medium-sized Enterprises (“SME”) owners and their management teams throughout Myanmar. I am pleased to note that our above-mentioned CSR efforts have provided clean water to 45,000 people to-date, and some 800 SME owners have attended seminars and workshops held over the past year. However, that is not all that we do at the business entity level. We also continue to contribute to the development and uplifting of the quality of life in local communities where we operate through various smaller projects, whether renovating a village school and providing supplies or holding a charity event to raise funds. We strongly encourage our people to take an active role in their communities, whether as individuals or as a team. Through our own CSR efforts and in partnership with other organisations, we wish to be a force for positive change in Myanmar and hope to do more year on year.
We hosted our third annual Shareholders’ Trip to Yangon from 18 - 21 March 2016 as part of our ongoing shareholder communications efforts. This year, a group of 100 shareholders from Singapore, Malaysia, Thailand, Vietnam, France, and the United States participated in this trip, compared to 76 participants in the previous year. The trip’s briefings and visits allowed participants to gain a deeper appreciation and understanding of our Pun Hlaing Estate, Star City and Landmark Development projects, as well as our KFC stores and New Holland and Mitsubishi Motors automotive distributorships. Not only were participants able to better understand the recent developments in Myanmar, but the trip also provided an opportunity to introduce our deep bench of management who were on hand to answer any questions. I thoroughly enjoyed the interaction I had with shareholders and wish to once again thank them for taking the time to travel to Myanmar. Their overwhelming support and invaluable feedback to management is what makes these trips so fruitful and meaningful for all parties.
In closing, I would like to once again express my appreciation to our Board of Directors for their sterling leadership and our dynamic and hardworking staff for another year of good performance. I would also like to take this opportunity on behalf of our Board of Directors to thank our Non-Executive Independent Directors Dato Dr Mohd Amin Liew Abdullah who resigned due to heavy work commitments, and U Kyi Aye, who will be retiring this year after 10 years of serving on our Board, for their distinguished service and contributions. At the same time, we also formally welcome Dato Timothy Ong Teck Ming and Ms Wong Su-Yen as our new Non-Executive Independent Directors and look forward to their invaluable contributions to the Group. Last but not least, I wish to also express my profound appreciation to our business associates and our shareholders as well as our staff for their support and dedication as we journey forward in this new era for Myanmar. As part of our appreciation to our shareholders, our Board of Directors would like to propose a final dividend of 0.25 Singapore cents per share which will be subject to shareholders’ approval.