Awba Group: Services Cover Half of Myanmar’s Agricultural Land, Seeking Cooperation with Chinese Pesticide Manufacturers

Release Date:

2019-02-12

During last month’s business mission to Myanmar, AgroPages visited the Awba Group. The company is a leading player in Myanmar’s agricultural sector. U Thadoe Hein, founder and chairman of the Awba Group, engaged in a face-to-face conversation with an AgroPages reporter, sharing insights into Awba and his vision for the industry’s future. Could you please introduce your company, along with its market positioning and brand influence in Myanmar? Founded in 1995, the Awba Group has now accumulated 24 years of development. The company has invested in Myanmar’s first privately owned fertilizer production facility and chemical formulation operations.

Could you please provide an overview of your company, as well as its market positioning and brand influence in Myanmar?

Founded in 1995, Myanmar’s Awba Group has now accumulated 24 years of development. The company has invested in Myanmar’s first privately owned fertilizer production plant, a chemical formulation facility, seed‑production facilities, and research‑and‑development centers, driving rapid growth. With more than 1,500 agronomists, Awba boasts the largest team of agricultural experts in ASEAN.

We remain one of the few local enterprises in Myanmar to have been among the first to receive funding from the International Finance Corporation, an affiliate of the World Bank. During the 2016–17 and 2017–18 fiscal years, Awba ranked among Myanmar’s top ten taxpaying companies.

Awba is also a market leader, commanding a substantial share of the market—serving 3.5 million farmers, which represents half of Myanmar’s 7 million farming households. Our core product and service offerings include fertilizers, crop protection products, hybrid and open-pollinated seeds, agricultural finance and microloans, mobile payment systems, and mobile-based farm advisory services. We possess robust formulation‑production capacity, enabling us to meet 50% of Myanmar’s market demand over the next five years.

The company is exploring ways to boost farmers’ productivity, reduce production costs, and enhance operational efficiency. Its primary goal is to help growers increase their incomes and alleviate rural poverty.

Could you please provide an overview of Myanmar’s crop‑production structure?

Myanmar boasts six agroclimatic zones, ranging from a warm tropical climate to snow-capped mountains, which contributes to an exceptionally diverse array of crops. Rice, pulses, maize, sesame, and peanuts are the principal crops, while vegetables such as potatoes, tomatoes, chilies, onions, and garlic, along with fruits like melons, also play a significant role. In southern Myanmar, oil palm plantations and rubber estates are further cultivated.

Do the services your company provides enable both traders and farmers to recognize long-term benefits? Could you please outline the key challenges hindering the development of Myanmar’s agricultural economy?

Our goal is to ensure long-term win‑win outcomes for all three parties: the company, the distributors, and the farmers. We have assembled a large team of agronomists to help farmers optimize crop production and increase their incomes. At the same time, we provide training on proper farming practices and emphasize harvesting only after the required safety intervals have elapsed. Farmers often lack sufficient knowledge about the safe and efficient use of agrochemicals; therefore, strengthening farmer education is essential.

Another core issue is the lack of financial support in rural areas. We are striving to extend as many loans as possible to farmers. In fact, 95% of our sales are on credit. Loan risks are very high, so we must proceed with great caution.

What is the current regulatory situation in Myanmar?

Regulation in Myanmar is becoming increasingly stringent as the country seeks to catch up with other ASEAN nations such as Thailand and Vietnam. Myanmar has also complied with the provisions of the Rotterdam Convention by banning products listed on the PIC List.

How is the business development of multinational agrochemical companies in Myanmar?

Over the past two years, several multinational corporations have established offices in Yangon. However, their operations remain quite limited, as the market is still in its early stages and highly price‑sensitive. Certain patented insecticides are performing well, while non‑patented pesticides face challenges related to emerging resistance. Moreover, due to concerns about credit risk, these multinational firms do not sell their products directly to end‑users.

According to China Customs’ pesticide export data, Myanmar imported 15,000 metric tons of pesticides from China from January to November 2018, a 6.88% decline compared with the same period the previous year. What do you think are the underlying reasons for this trend? Has your company’s business been affected? How have you responded?

There are four reasons for the decline in import volume:

- Bean exports have been constrained by Indian policy. Moreover, with bean prices having fallen sharply, farmers are reluctant to purchase pesticides.

- During the 2018 monsoon season, Myanmar was hit by flooding.

- Due to factory closures in China, the country’s supply has decreased.

- Myanmar’s overall economic situation is sluggish, and the depreciation of the Myanmar currency is one of the contributing factors.

Due to supply shortages and rising pesticide prices in China, profit margins for some products have been squeezed, yet certain products continue to maintain their market share.

In 2018, Myanmar’s currency depreciated by more than 20%, and coupled with rising prices for Chinese agricultural pesticides, farmers are now facing significantly higher costs.

In the past, we imported a large volume of products from trading companies. To address the challenges we currently face, we have sought to source most of our needs directly from manufacturers. However, in certain cases—particularly regarding payment—we still rely on trading companies to supply our products. Looking ahead, we remain committed to establishing direct partnerships with manufacturers.

Most importantly, we hope the market will recover as soon as possible.

Global agriculture is undergoing profound transformation, and Chinese companies are more eager than ever to expand their international operations. How do you collaborate with Chinese firms? What is your vision for future development?

Over the past 15 years, we have been collaborating with Chinese manufacturers. Eighty percent of our product sourcing comes from Chinese companies. Looking ahead, we look forward to partnering with major Chinese corporations. Chinese suppliers will remain key strategic partners, and we are fully prepared to strengthen these collaborations.

Source: AgroPages (World Agrochemical Network)

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