Name : Naing Lin
Position : CEO of Myanmar Kowa International Co., Ltd
Naing Lin worked as a software engineer in Japan for seven years before he established Myanmar Kowa International Co., Ltd, a company that serves as an import-export agent. Currently, they are importing goods from Rinnai, a Japanese based manufacturer of gas appliances, including energy-efficient tankless water heaters, home heating appliances, and boilers.
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What was your first impression of the Myanmar market? How have you seen it change since Rinnai has been there?
Back in 2005, when I started importing Rinnai, the market size for gas appliances was very small so we have to educate the customer base on the benefits of these products. We started with low-end product line such as cooking appliances. But after about four years, the market expanded up to high-end, built-in products.
What made you decide to open an office in Myanmar and what was the biggest obstacle you faced?
I came back to Myanmar from Japan with the intention of establishing my own business. Even though I worked as an engineer in the research and development department and the fields are totally different, I made up my mind to establish a trading business as that’s what I’ve been passionate about ever since I was young. The biggest obstacle I faced was the lack of capital or investment. I started trading cosmetics because it could result in large profitmargins.
Rinnai is in a number of other countries as well. What are the differences between working in Myanmar and other countries?
There are a lot of differences. The most significant one would be buying power. Regarding imports, the steps in the procedure of trading here in Myanmar is quite a lot more complicated than in other countries, and the exchange rate – such as bank rate, black market rate, earning rate – varies which causes us to try so hard to get the understanding of the mother company in Japan, when I started importing Rinnai. In addition, we have to pay more shipping cost than in other countries as there is no directshipping to Myanmar; we have to import through Singapore. The documents in importing have to be handled with great care as there will be a lot of trouble even if we miss one alphabet or number.
How does Rinnai develop technical skills and human resource capacity in Myanmar?
The Japan headquarters provides us with technical skills, such as engineers who come from the mother company in Japan for 3 or 6 months to train our staff. Or, sometimes we send a representative engineer from our company abroad to learn a new product development.
Concerning the development of human resource capacity, we conduct sales training mainly while we simultaneously acquire other talents such as accounting or administration from outside experienced professionals. We provide sales training to the dealers as well. The staff from sales and marketing team went to our dealer shops and met sales representatives to teach them about our products. As our dealers communicate directly with the consumers, we need to make sure we properly share product knowledge.
What is the market share for Rinnai in Myanmar?
It differs according to the products. For entry level products such as table-top products, we have 40 to 50 percent share of the total market share. As for the water heating system, we have 7 to 8 percent of the total market share and the market is still young. For build-in products, we have 20 to 25 percent share of the total market share.
Do you see the upcoming foreign investment laws changing your operations? How so?
There are negative and positive effects when foreign investment enters the market. Local companies can be at a disadvantage to compete with foreign companies because the banking system is weak and we have little technical skills. However, we will start to see positive effects of foreign investment when the turnover of the country becomes high and as a result the market size will get bigger.
Do you see the manufacturing sector becoming more competitive as the country opens up to more foreign companies?
If foreign manufacturers that come in have a good business model, I think it will be helpful for the Myanmar manufacturers as they can gain technical and investment support.
What are Rinnai’s business lines that are represented in Myanmar? Do you see an expansion of your other lines into the country?
We started with cooking applicants and expanded to water treatment in collaboration with a foreign company. There are three business lines in Rinnai Myanmar – household lines (home cooking appliances), industrial line (cooking appliances for restaurants), and commercial line (water heating systems at hotels).
What has been your most successful product or business line in Myanmar?
Cooking appliances were the most successful until six years ago. It covered up to 80 percent of the total sales. But the commercial line is catching up now as it covers up to 50 percent. There is not a big difference.
From a business standpoint, what do you feel are the biggest challenges facing you and your team in Myanmar in next 1-3 years?
As our goal is to form a joint venture with Rinnai Japan, we are trying to start a manufacturing branch here in Myanmar. But we are facing some difficulties in coming to an agreement with the mother company as foreign investment law in Myanmar changes rapidly.
If you could change one major government policy, what would it be?
I’ll just talk about the policy concerning economy. Rather than changing the policy, I just want the policies to be transparent, precise, and a little less cumbersome.[/paypal]
