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Tension lingers among Korean firms in Myanmar in wake of military coup


(AP-Yonhap)
(AP-Yonhap)
As Myanmar deals with the aftermath of the latest military coup, South Korean businesses operating there are promptly following through with contingency measures, seeking to ensure the safety of their workers and their families and also to minimize the anticipated disruption to major ongoing projects.

Likely to take the most visible impact are players in the energy and trading sectors, especially those that have expanded investments into landmark development projects in recent years.

According to data from the state-run Korea Trade-Investment Promotion Agency and the Export-Import Bank of Korea, Korean companies have set up a total of 107 branch offices and subsidiaries in the Southeast Asian state over the past three years. Total investments during the same period came to $668 million.

A representative case is Posco International, the trading arm of the country’s largest steelmaker, which has been developing gas fields in Myanmar’s offshore areas since 2013 to provide 500 million cubic feet of gas per day to Myanmar and China. Extending its success in natural resources, the company decided last year to invest an additional 108.6 billion won ($97.27 million) in drilling projects in new areas of northwestern Myanmar.

In response to the coup on Monday, the Posco affiliate immediately ordered most of its 70-member staff to work from home until further notice.

“We are keeping a close watch on situations,” said the company’s official, adding that the gas fields were operating normally.

Textile and chemical conglomerate Hyosung, which has run a trading subsidiary in Myanmar since 1995 that produces textile and steel products, is also on full alert for additional developments.

LS Cable & System, which operates an electric cable plant in Yangon, has raised alarm signals but also added that manufacturing facilities are not yet affected by the local political situation.

On Monday, Myanmar announced a military coup, confirming the detention of the country’s democratic movement leader Daw Aung San Suu Kyi and her aides. The violent actions, according to the military, were taken to rectify what it defined as vote rigging during last November’s elections.

The Korean Embassy in Myanmar swiftly issued a notice and urged Korean nationals to stay indoors, vowing to make all efforts to figure out the current state of affairs.

As of Tuesday, no tangible damage had been reported at any foreign businesses in Myanmar but tension persists as telecommunications networks were disrupted and the main international airport in capital Yangon was shut down.

Korea’s exports to Myanmar as of August last year came to $400 million, up 7.4 percent from a year earlier despite the fallout of the COVID-19 pandemic. The thriving market sectors were transport machinery, textiles, industrial machinery and steel.

Also, Asia’s fourth-largest economy was the sixth-largest investor in Myanmar, having injected some $4.06 billion into 184 projects as of June last year, focusing largely on oil, gas, manufacturing and telecommunications.

By Bae Hyun-jung (tellme@heraldcorp.com
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