Industry 4.

0 in Myanmar
Leapfrogging across sectors and how to overcome the barriers!
A whitepaper jointly conducted by Roland Berger, Myanmar Survey Research and
the Delegation of German Industry and Commerce in Myanmar (AHK Myanmar)

May, 2019
INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

Contents
Foreword ........................................................................................................................................... 2
1. Introduction .................................................................................................................................... 5
2. The concept of Industry 4.0 ........................................................................................................... 6
3. Digital leapfrogging in Myanmar .................................................................................................... 9
3.1 Telecommunication ................................................................................................................ 9
3.2 FinTech ................................................................................................................................ 11
3.3 E-commerce ......................................................................................................................... 11
3.4 Smart City trends ................................................................................................................. 12
4. Opportunities of Industry 4.0 for Myanmar .................................................................................. 14
4.1 Overview – Industry 4.0 in Myanmar ................................................................................... 14
4.2 Manufacturing industry ......................................................................................................... 15
4.3 Agriculture ............................................................................................................................ 17
4.4 Retail – E-commerce............................................................................................................ 18
4.5 Urban development – Smart infrastructure/city.................................................................... 19
5. Barriers to overcome ................................................................................................................... 20
6. Implications for the private and public sector in Myanmar .......................................................... 23

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

Dear readers,

Digitalization presents one of the biggest future economic challenges but at the same time also
provides ample opportunities. It will enrich our way of thinking, working and interacting. Even today
we witness public debates about artificial intelligence, smart homes and autonomous driving. Many
German companies are specialized in high-tech areas. They are already actively benefitting from
current digital developments and thus getting ready for the future. The German government which
highly prioritizes digitalization and “Industry 4.0” firmly supports the private sector in this transition.

I am therefore very pleased that a conference on “Industry 4.0 in Myanmar – Leapfrogging across
sectors” will be held in Yangon. And I am proud that the German Embassy Yangon has the
opportunity to strongly support this unique event, which was initiated and organized by the
Delegation of German Industry and Commerce together with the German private sector in
Myanmar. All conference stakeholders as well as the Embassy know that Myanmar has a huge
potential when it comes to “Industry 4.0”. Even though digitalization is still at an early stage,
companies in Myanmar are already able to benefit from a fine telecommunication infrastructure and
a population ready to embrace new technologies. I am convinced that the title of the conference
“Leapfrogging across sectors” will lead the way for Myanmar’s economy in the upcoming years.

The present whitepaper presents many valuable insights from companies which are already active
in implementing “Industry 4.0” solutions. I hope that the show cases will provide incentives and
ideas for further business endeavors and would like to express my gratitude to all who have
contributed.

I hope that you will enjoy the paper and the conference

Dorothee Janetzke-Wenzel
Ambassador, Federal Republic of Germany

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

လုပ္ငန္း စဥ္ အက်စဥ္း

ျ္န္္မနနင
ု ္ငံ နွင့္ Industry 4.0 သည္ ပးတသ
ြဲ ံုးရလ့္လွနရသမရ ေသမလ္်မး ျ ္္ကသည္္။ျ္န္္မနနုင္ငံသည္ အရျခခခခံ

အရဆမက္အအံု္ျပည့္ ံုရသးသည့္နနုင္ငံ တ ္နနုငင

္ ံသုလသန္်မးျပး Industry 4.0 အျ ္ ကးရျပမင္းနနုင္္ည့္

အရျခခအရန ဆနုသည္္ွမ အလွ္္းရ းရနရသးသည္သု ဆနုလရပ္ည္္ ျ္မန္မမနု

ိ နုငံရနအရသး မးနွင့္အလတ္ မး

ကု္ၸဏ္်မး္ွလတ္တရလမ ရကမက္္ူမးသည့္ ္တ္္း္်မအလ ရျ ဆနုသ္်မးား၏ လမခခနုင္နွုနး္ ၈% သညနသမလရွ်ုန

Industry 4.0 အရ္ကမင္း ္ကမးဘးရလသည္္1 သနိ႔ရသမ္လည္း ဤ ကၠဴျ ၠဴ မတ္္းတင္။ျ္န္္မနနုင္ငံလွန

ကု္ၸဏႀကး္်မးသမ္က အရသး မးနွင့္ အလတ္ မးကု္ၸဏ္်မးကပါ ကနစဥးရျခခလွ္္းတ ္လပ္ အျ ္

၎တနု႔ား၏ းပမးရလး လုပ္ငန္း္်မးတင္ data အခခ်က္အလက္္်မးကနု အသံုးျပ ျခခင္းသည္ ပနုျပးအရလးပါလမ္ည္သု

နမးလည္ သနလွနူမးသည္္။ ျ္န္္မနနုငင

္ ံသည္ လန္ခခြဲ့သည့္ဆ္္ ုနွ ္ရပါင္း္်မး မ အတင္း စက္မႈေ ခ္္အျစ္

တနုးတက္ေအ လပ္င ္းလခရပ္ြ္္ ္ငပည္မငယ္လ ါဝပ္ႏိုနုင္ ေ

္ဲ့ သမ္လည္းြ ္ ္င လေ လပ္ငမယလငကြေကယလ္ လင လႊားၿပင

စက္ စၥ ္င္စလငးင ္ံင္ ္ဲ့ေ ခ္ကလ ္ငပ္ဲ့ြIndustry 4.0ြ စ္စ္္႔ြ ္ ယပ္္အမ္္ ပ္ကကငေအ လပ္ငး္္

္ ရပဲ့္
္ မ္ငမယလငစရလြာ ႐ငေ္ ါေ္င္ ္းသည္။

ဤစကၠဴအျၠဴစလခမ္င္ ္ြ္ ါ္ ရပဲ့္

္ မ္ငမယလငကြ္စငး္ ္္ငကခ္လမကြကမၸ လႊားၿပမယလငက ါမ ္္႔

ကပ္ခရည္ ္္ံငအ ္ပ္ေ ကလပ္ငက ္ံင္ ္ေ ငးလင လႊားၿပငြအမ္္မလ္ပ္ပံ္ခရက္ြIndustry 4.0 က ေ င္ ္္ပ္မ ဲ့္

္ကယ ငေကယငးကငမယလငက မလႊားၿပငေမလပ္ငးင ေျလ္အ းလငကလြIndustry 4.0ြ္ ္င လမယလငက ္္ံငအ ္ ္ဲ့္ ါြေကယလ္အျခ္

းမ ္ဲ့္အက ္ခလင္ လႊားၿပငမယလငက ါြ ေ ဲ့ လေျလ္းခ္ေ ငးလင္ ္္ း႔္အ ပ္ြ အမ္္မလက္ဲ့္႔ေ္လ ြ

ျရံ႔ ျ င ္္ပ္ပံခစ္ ခရပ္ြIndustry 4.0 ၏ြ ္ေဘလခးလငကြ မကယည္ကယည္အ ္္႔အ ္္႔ ္အ ၸါ္္ြ

ျရပ္ဲ့ ေ ငး္္ ္ ္ လႊားၿပငြ္ံငစရ္

္ ကြ အ ္ပ္္င္ံင ာ ႐႐းမ္မယလင ္ငြ ါဝပ္္ပ္ဲ့္ ္းသည္။ြ

ူနု ကၠဴျ ၠဴ မတ္္းကနု ဂ်မ္န္-ျ္န္္မ းပမးရလးလုပ္ငန္းလွင္္်မးအသင္း (AHK Myanmar)၊ Myanmar Survey

Research (MSR) နွင့္ Roland Berger ကု္ၸဏတနု႔္ွ ပးရပါင္းလုပ္ရဆမင္ူမးျခခင္း။ျ ္သည္္

၎ ကၠဴျ ၠဴ မတ္္းတင္ Industry 4.0 နွင့္ပတ္သက္သည့္ အသနအျ္င္္်မး၊ အလွ်င္းသင့္ပံုနွင့္

1
၂၀၁၉ ္တ္လတင္။ျ္န္္မႏိုုနင္ငံား၏အႀကးဆုံး းပမးရလးအခခ်က္အခခ်မအ္န ၿႀကး ၂ အ္န ၿျ ္သည့္
လန္ကုန္ႏိုွင္္
့ ႏို္ရလးႏၱေွနအရသး မးႏိုွင့္အလတ္ မးကုန္ူုတ္လုပ္္တကု္ပဏ ၁၅၄ ခခုအမး။ျ္န္္မဆမရ းသုရတသန
(MSR) ္ွရလ့လမ္တလုပ္ရဆမင္ခခြဲ့သည္္

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 INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

အသန္႔အတမး္်မးကနု လန္ကုန္နွင့္္ႏို္ရလးလွန (SME) အရသး မး၊ အလတ္ မးူုတ္လုပ္ရလးကု္ၸဏရပါင္း ၁၅၄ခခုဆ္ွ

တနုင္းတမာရကမက္္ရ မ္ျပူမးသည္္ ူနု႔အျပင္ MSR သည္လန္ခခြဲ့ရသမနွ ္အရတမ္္ကမကတည္းက။ျ္န္္မနနုင္ငံ

တင္ ဒစ္႐ယစ္ခည္စ္စ္ က္ ံ္ံငစရမ

္ ႈြျရံ႔ ျ ငခငခက္ လ္ ္ဲ့ မလ ္ငပ္ဲ့ြစလတခ္ေအမလက္္ ္ဲ့ က့လႊားၿပငေး္င ္္ငက

ခပ္ငခလ ္ဲ့္ ္းသည္။2 Industry 4.0 က ့လႊားၿပငေ လပ္ ယက္းင္ ္ဲ့ ႐ယလမ္္ကမၸ လႊားၿပမယလင္ငပ္ဲ့ြအမ္္မလကမၸ လႊားၿပမယလင္ွလည္း

၄ပ္ငခ႔ခခ္ကရြမ္ငးလင္ ္ဲ့ လး ္မယလငက ္ ါစကၠဴအျၠဴစလခမ္င္ခရက္ြကက လႊားၿပေးလက္ ံဲ့ေ ငးလင္ ္ဲ့္အ ပ္ြ

အော ႐ငွေခလပ္္လာ ႐င္ပ္ပံ္ ယ ွမငြခငခက္မႈအျစ္း ္။ ေ ဲ့ လမႈမယလင ္ငြး ္ဲ့္ရပ္ငေ ငးလင္ ္းသည္။ြေကမ္ ေးငာ ႐ငပ္င

္ပ္္င ကလႊားၿပငြ ၁ြ က ္ငြည စလခမ္င္ခရက္ြ္ပ္ခလြယၠဴငးလင္ ္းသည္။

AHK။ အမ္္မလ္ ္ြအမ္္မလ္ပ္ပံာ ႐င႐ယလမ္္စက္မႈ္ငပ္ဲ့ကကင္္္ငေးလပ္ငဝည္ေးင၏ ခးလငဝပ္ကည္စလင ငည္္ျ္႔အရ ျစ္ လႊားၿပင ြ

႐ယလမ္္္စငးးံမင္ေးလက္္ ံဲ့းးငးလင္ ္းသည္။ AHK။ အမ္္မလ္ ္ စလႊားၿပင ရလငေးငေ ါပ္ငကကင က္္ရည္မႈမယလးြ

မ္လငေကလပ္ငစရလခ ္ေ လက္း္္ြး ္ာ ႐ရည္ ယက္အျပ္ဲ့ ၂၀ ၄ြ ္ငစ္ကခ ္ငကစခပ္ငြ ႐ယလမ္လႊားၿပ္ငပ္ဲ့ြအမ္္မလ ကလငခရပ္ ြ

စလႊားၿပမံက္္ငမယလငးြ္ မ္င္္လင မ
ရ္ ယလင္ငပ္ဲ့ြဝ္္ေ လပ္မမ
ႈ ယလငေ လပ္းရကေ
္ င ငယက္းင္ ္းသည္။

MSR ္ ္ြ အမ္္မလ္ပ္ပခ
ံ ရပ္ ေစယငကရက္္ငပ္ဲ့ ကမႈေးင္ေခ္္အ ႐ၢ ကြ ေ္႐ယပ္စလႊားၿပခစ္ ္အျစ္

့လႊားၿပငေ လပ္း ္ခ ္ေ္္ ္အျစ္္ ္းသည္။ MSR ္ ္ြ က္္ရည္ေးင္ငပ္ဲ့ဘခလေးင္ ္င လကခ္အ ပ္ ြ

္ ္င လ္ေအ အ ြစလႊားၿပင ရလငေးင ္ပ္္ငမယလငမင ္ ္္ ္

္ ကမယလင္ခရက္ြ ္ံငစရ္
္ ကစခ္ က က္္ငပ္ဲ့ြB2B

( ္ပ္္ငမင ္ပ္္င လႊားၿပ္႔ုြ ္ေခ္္မယလငေ လပ္ာ ႐ရက္ေ င ယက္ာ ႐င လႊားၿပင ၂၀ ၂ြ ္ငစ္မငစင ဒစ္႐ယစ္ခည္စ္စ္

က္ ံ္ံငစရမ
္ ႈက ္ငြ္ေခ္္အ ေ ငေ္္ ဲ့ြ္ ကမၸ လႊားၿပအျစ္္ ္းသည္။ြ

Roland Berger ကမၸ လႊားၿပ္ ္ြ ္ပ္ပံေ ါပ္ငြ၁၄ြ္ပ္ပံခရပ္ြ ္ကပ္ေ လပ္ာ ႐ရက္ေ္ လႊားၿပင ြ စလႊားၿပင ရလငေးင

္ ္ငြယၠဴ လ။ ေ ရငေ္ရင္ ကံေ င္ ္ဲ့ြ္ပ္ပံခကလ ္ပ္္ငြခစ္ အျစ္္ ္းသည္။ြ Roland Berger ကမၸ လႊားၿပ္ ္ြ ၂၀ ၁ြ

္ငစ္မငစငြအမ္္မလ္ပ္ပံခရပ္စခပ္ ္ကပ္ေ္အ လႊားၿပငြအ ္ခရပ္င ႐ၢ ကကမၸ လႊားၿပမယလငးြ္ပ္ပံခကလ းပ္င္ငလႊားၿပငအမင ္္ငံ္ကမယလင

္အ ပ္။ အမ္္မလ္စငး၏ြေစယငကရက္္ခရပ္ငဝပ္ေးလက္ေးင ြယၠဴ လ္ ္င လမယလငးြ ြယၠဴ လ္ ္င လမယလင ြ

အျစ္းရ္္ငအ ပ္ငးြစရမ္ငေ လပ္း ခ

္ ငခက္အ ပ္င စ္ ္ဲ့ ကခမယ ငစံကြေ ရငေ္ရင္ ကံေ င ယက္ာ ႐င္ ္းသည္။ြ့ မလ္လငအျပ္ဲ့ြ

Roland Berger ကမၸ လႊားၿပ္ ္ြ က္္ရည္ေးင္ငပ္ဲ့ဘ ္ ္ပ္္ငကခမယလငခရပ္ြliberalization ။

ရ္လပ္အမပ္စရလ ္ေ လပ္္ပ္ရလး္ခရက္ အမ္္မလ္စငး္လင ကက လႊားၿပ ံဲ့ ငေ င ္ဲ့္ ္းသည္။

2
MSR ဒ ္ဂ် ္တ္္ျ္န္္မရလ့လမရလး၊ ၁၈-၅၅ အလ္္္်မးတင္ ၂၀၁၇ တင္ n=၁၂၀၀၊ ၂၀၁၉တင္ n=၁၀၀၀္

4
INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

1. Introduction
Myanmar and Industry 4.0 are not often used in the same context. Myanmar has been rather known
for its infrastructure gaps and one could argue the country is far away from a transition towards
Industry 4.0. A recent survey, which was conducted as part of this whitepaper with small & medium
sized manufacturing companies reveals that only 8% of survey respondents have heard of Industry
4.0.3 However, this whitepaper also shows a high openness across Myanmar companies to
automate their business activities as a first step. Moreover, 84% of the surveyed companies
indicate that the usage of data will become more important for their business in the next 5 years.
Since Myanmar has hardly participated in the industrialization of the past decades, there is vast
potential for the country to leapfrog older technologies and shift immediately towards an era of
automation and Industry 4.0.
This whitepaper assesses how companies and the public sector could leverage this potential,
highlights the advantages that Industry 4.0 could entail for Myanmar and explores the main barriers
that would need to be overcome to foster Industry 4.0 technologies. It also shows that in a
developing country such as Myanmar, the concept of Industry 4.0 needs to be defined more broadly
and also include customer centered applications.
This whitepaper has been jointly developed by the Delegation of German Industry and Commerce
in Myanmar (AHK Myanmar), Myanmar Survey Research (MSR) and Roland Berger. The
whitepaper includes insights from two surveys that haven been conducted among 154 SME
manufacturing companies in Yangon and Mandalay to measure their awareness, readiness and
barriers to engage with Industry 4.0. Additionally, MSR has measured over the years the
development of the digital adoption and literacy within the population. 4 Leading German and
Myanmar companies in the field of Industry 4.0 have contributed to this paper with their expertise
and case studies from other countries in Southeast Asia and Europe. Last but not least, 13 large
corporations have been interviewed for this paper.
The AHK Myanmar is the official representation of German Industry and Commerce in Myanmar
with a mandate from the German government. The AHK Myanmar aims at building and
strengthening business relationships between Germany and Myanmar through projects, events and
services since 2014.
MSR is the leading independent market and social research agency in Myanmar. MSR conducts
customized consumer and B2B research for numerous clients including from the telecom and
fintech sector as well as app-based businesses and has researched digital adoption and barriers
since 2012.
Roland Berger is a global strategy consulting firm active in 34 countries. Roland Berger has been
present in Myanmar since 2013, advising local private companies, international investors as well as
the government on various strategic topics such as market entry strategies, growth strategies,
performance improvement and the liberalization across various sectors. For example, Roland
Berger has supported the Myanmar government in the successful liberalization of the telecom and
banking sectors.

3 Study conducted by MSR in March 2019 among n=154 small and medium sized manufacturing
companies in Yangon and Mandalay, the 2 largest economic hubs of Myanmar.
4 MSR Digital Myanmar Study, n=1200 in 2017, n=1000 in 2019 among those aged 18-55.

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2. The concept of Industry 4.0

Multiple countries around the world have already witnessed three industrial revolutions, which could
also be described as disruptive leaps in industrial processes, resulting in significantly higher
productivity. The first revolution improved efficiency through the use of hydropower, the increasing
use of steam power and the development of machine tools. The second brought electricity and
mass production (assembly lines), and the third and most recent further accelerated automation
using electronics and IT. The fourth industrial revolution is already on its way. However, Myanmar
has not even fully participated in the third industrial revolution, meaning that many production lines
still rely on a significant share of manual labor and are not even partly automated. Hence, Myanmar
has the potential to leapfrog semi-automated production lines and jump straight into the era of
Industry 4.0.

Figure 1: Development stages of industrial manufacturing

1st 2nd 3rd 4th Impact of each

Revolution
industrial revolution industrial revolution industrial revolution industrial revolution?
> Introduction of
new products
and means of
producing existing
ones

1784 1923 1969 2016 > Disruption of the

Mechanical Introduction of a First programmable Real time, self opti- competitive status
weaving loom "moving" assembly logic controller mizing connected quo (both within
line at Ford Motors (PLC) systems and between
Introduction of Introduction of mass Introduction of electronics How does the countries and
mechanical production production based on and IT for higher Myanmar enterprises)
assets based on water division of labor and automatization of readiness look
and steam power electrical energy production
like? > New requirements
Time to workforce and
Myanmar Myanmar infrastructure
today Leapfrogging tomorrow
potential

Source: Roland Berger

Industry 4.0 needs to be differentiated from smaller concepts such as the "Internet of Things",
"Maker Movement" or "Factory 4.0". Industry 4.0 emphasizes the idea of consistent digitization and
linking of all productive units in an economy. German companies, being known for high-tech
machinery and equipment manufacturers, are leading the development and promotion of Industry
4.0 in the manufacturing sector of the future. They have already started to develop the first
strategies on high-tech and digitalization in 2006.5

5 UNIDO (2018): What can policy makers learn from Germany’s Industrie 4.0 development strategy.

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The key characteristics of a new industrial landscape under the concept of Industry 4.0 are:

1. CYBER-PHYSICAL SYSTEMS AND MARKETPLACE. In developed countries, ICT systems

are already at the heart of the production system. In Industry 4.0, those systems will be far
more connected to all sub-systems, processes, internal and external objects, the supplier and
customer networks. Complexity will be much higher and will require sophisticated marketplace
offerings. ICT systems will be built around machines, storage systems and supplies that
adhere to a defined standard and are linked up as cyber-physical systems (CPS). These can
be controlled in real time. Plants and systems will have clearly defined, similar interfaces.
Cyber-physical systems allow for flexibility in replacing machines along the value chain in
which production processes can be changed at short notice and downtime can be offset.

2. SMART ROBOTS AND MACHINES. Machines have already partly replaced human workers in
the last revolution. In the future they will become more intelligent, which means they will be
able to adapt, communicate and interact. In Industry 4.0 smart robots will not necessarily
replace humans in increasingly complex workflows but rather work hand in hand with humans,
using human-machine interfaces with smart sensors. The use of robots will increase across
various functions like production, logistics, office management (to distribute documents). These
robots can also be controlled remotely. If a problem occurs, the worker will receive a message
on the smart phone, which is linked to a web cam, so the employee can give instructions to let
the production continue. Thus, the plant could operate 24/7 without the continuous presence of
workers. Theoretically a head of production does not need to commute through traffic to the
production site every day, but can occasionally stay at home, monitoring the workflow.

3. BIG DATA. Data is often referred to as the raw material of the 21st century. Indeed, the
amount of data available to businesses is expected to double every 1.2 years because plants
of the future will be producing a huge amount of data that needs to be saved, processed and
analyzed. Big data also allows companies to introduce mass customization, individually
adapting products depending on customers' preferences on a large scale. Hence, innovative
methods to handle big data and to tap the potential of cloud computing will create new ways to
leverage information and satisfy customer needs.

4. NEW QUALITY OF CONNECTIVITY. In Industry 4.0 the digital and real worlds are truly
connected. Machines, workpieces, systems and human beings will constantly exchange digital
information via Internet protocol. This means physical things will be linked to their data
footprint. Production with interconnected machines becomes very smooth: one machine is
immediately informed when the part is produced by another machine, as well as the conveyor
or the logistic supply robot. Machines automatically adapt to each production step, coordinating
almost automatically any adjustments in the production unit of the series to be manufactured.
Even the product may communicate when it is produced and ask for a conveyor to be picked
up, or send a message to the ordering system to say "I am finished and can be delivered".

5. ENERGY EFFICIENCY AND DECENTRALIZATION. Climate change and scarcity of

resources are megatrends that will significantly impact Myanmar. Industry 4.0 enables energy
decentralization for plants, triggering the need for the use of carbon-neutral technologies (e.g.,
solar power) in manufacturing. Using renewable energies will be more financially attractive for
companies, particularly considering the fluctuating prices for gasoline to run a generator, which
is still common practice for many companies due to existing power outages in Myanmar.

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6. VIRTUAL INDUSTRIALIZATION. There is nothing more difficult than launching a new plant or
a new product in an existing plant: hours of adaptations, trials, pre-series testing requiring a
high-caliber launch team and numerous unexpected cost overruns. A day lost through a
standstill of production means a huge revenue loss for many businesses. Industry 4.0 will use
virtual plants and products to prepare the physical production. Every process is first simulated
and verified virtually; only once the final solution is ready is the physical mapping done –
meaning all software, parameters and numerical matrixes are uploaded into the physical
machines that control the production. Some initial trials have made it possible to set up an
Industry 4.0 can be characterized by six distinct functional
automotive part production unit in three days – as opposed to the three months it requires
today. Virtual plants can be designed and easily visualized in 3D to show how the workers and
characteristics
machines will interact.

Industry 4.0 functional characteristics

Figure 2: Industry 4.0 functional characteristics – Endgame scenario

5
4 Full connectivity

1 Cyber-physical systems
Work in progress

2 Smart robots and

3 Big data / machines
Customization

4 Full
connectivity
3 Big data
5 Energy efficiency
and decentralization 6 Virtual
industrialization

Source: Roland
Source: Berger Berger
Roland 20190505_Myanmar Industrie 4.0 whitepaper_v1.pptx 3

The fourth industrial revolution will transform the economic paradigm and the mechanisms for
creating value that underpin it. Manufacturing has, in effect, switched from a mindset of mass
production to one of mass customization. No longer is it based on scale and volume effects but on
flexible and localized production situated close to centers of demand. The production site of the
future manufactures "on demand" and no longer creates inventory, but instead dynamically adapts
itself to demand. It is more predictive and auto-corrective, and it involves less trial and error. Its
logic is focused on using a product rather than on the product itself. The industrial model today is
still based on the principle of decreasing product costs through the volume of products
manufactured: the higher the volume produced, the lower the unit costs become. This paradigm is
likely to change in the future, where companies are more concerned with optimizing the capital
required to produce their goods.6

6 Roland Berger study: The industry 4.0 transition quantified

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3. Digital leapfrogging in Myanmar

For decades, Myanmar has ranked among the world's least industrialized nations .7 Agriculture still
accounts for more than 23% of its economic output (2017), compared to less than 9% in the
neighboring country Thailand.8 The main reason for Myanmar’s low level of industrialization is its
economic and political isolation which lasted for decades, until the 2010 general election. While the
country is still in clear need of reforms and upgrades, significant improvement has already been
achieved in some sectors over the past nine years. Among these are the telecommunication sector,
banking sector, retail space and initial smart city attempts. In all four areas mentioned, the progress
has largely been made through digitalization and automated solutions. Thus, digital leapfrogging
across various sectors in Myanmar is not a utopian idea, but already happening right now.

3.1 Telecommunication
Ten years ago, the internet penetration in Myanmar was less than 0.3% of the population,
equivalent to approximately 130,000 users.9 By the end of 2018, Myanmar’s four mobile network
operators (MPT, Telenor, Ooredoo, Mytel) combined had over 27.5 million unique mobile
subscribers.10 Over 73% of these subscribers (subs) had access to mobile internet. Unlike in many
other least developed countries, most users in Myanmar use smartphones instead of feature
phones.
Myanma Posts and Telecommunications (MPT) was the first provider to offer mobile services. In
2013, after the Myanmar government called a competitive international tender, supported by Roland
Berger, Ooredoo and Telenor were granted licenses to provide mobile services in early 2014. They
had to commit to cover remote and difficult to access areas. German DEG supported the
construction and operation of Myanmar’s network with a USD 31.8 million loan in 2015. In 2018, a
fourth provider, Mytel, joined the landscape.

7 UNCTADStat Database, United Nations Conference on Trade and Development

8 Worldbank
9 Myanmar Times (2018): Upgrading Myanmar’s internet access.
10 GSMA

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Figure 3: Mobile penetration development in Myanmar

3G/4G penetration has increased Smartphone penetration is among highest Data users have been growing
drastically in the region drastically

3G and 4G penetration, 2014 – 2018 [%] Smartphone penetration, Q2'18 [% of total Data penetration of total subs and data subs,
mobile connections] 2014 – 2018 [%, # m]

78%
Singapore 81%
67% 65% 67%
Malaysia 70% 60%
29%
56% 16% 55%
Myanmar 68% 50% 39.2
10% 34.3
38% Thailand 66% 29.0

Philippines 65% 20.6

51% 49%
46%
38% Indonesia 65%
13% 7.5
13% India 41%

2014 2015 2016 2017 2018 Pakistan 32% 2014 2015 2016 2017 2018
4G 3G Data sub penetration Data subs

Source: GSMA, Industry 4.0 whitepaper

Over the last six years, Myanmar has seen unprecedented growth in telecommunications and
technology. The government’s liberalization of the sector led to a significant drop in SIM card prices
which boosted the access to affordable telecommunication. The majority of consumers entered the
market via a smartphone resulting in a rapid increase of digital technologies including a rising tech
ecosystem built by Myanmar companies. They built products for a large variety of socio-economic
and business purposes: from eliminating fake education documents to storing medical records, and
from telemedicine for rural areas to mAgri (mobile Agriculture) solutions with live weather reports
and price information, such as e.g. Greenovator or Impact Terra’s Golden Paddy application.11

On the consumer side, digital literacy skills have grown across age groups, fostering other app-
based businesses e.g., mobile money.12 In 2019, 95% of households own at least one smartphone
(up from 83% in 2017).13 Internet usage is growing among all age groups. Over 80% of adults under
30 years report to have accessed the internet in the past four weeks. The average daily usage time
of the internet has increased from 1 hour 54 minutes in 2015 to 2 hours and 50 minutes in 2019. 14
In Myanmar, Facebook has become the synonym of the internet which means that almost all
businesses have a Facebook presence, and products and services are searched and offered via
Facebook. E-mail, also in a business context, is leapfrogged through messenger apps such as
Viber and Facebook Messenger.

11 Frontier Myanmar (2017): Advancing agriculture, with apps and advice.

12 MSR (2019): Digital Myanmar 2019 Study - 73% of all survey participants in 2018. (Burmese)
indicated they have no difficulties to navigate through new apps
13 Note: The survey excluded remote rural areas and thus the national average of smartphone

ownership may be lower.

14 MSR (2019): Digital Myanmar 2019 Study.

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3.2 FinTech
Cash is still king in Myanmar with over 90% of payments being made in cash and the FinTech
industry has just started to slowly evolve. 15 FinTech providers in Myanmar have currently a large
consumer focus and offer mobile and digital payment and remittance solutions. Applications for
FinTech range from buying movie tickets, phone top-ups to online shopping and paying bills with
mobile money accounts that have a daily transfer limit of MMK 500,000 (approx. 330 USD).16
FinTech, e.g. in the form of mobile wallets growing into proper banking services over time, is
particularly important to broaden access to finance, which is still very low in Myanmar with less than
a third of the adult population holding a formal bank account. 17

FinTech solutions in Myanmar started quickly to develop Figure 4: Population share using at least one
within the wake of telecommunication reforms. In 2013, the financial service [in %]
Central Bank of Myanmar issued a Mobile Banking
+18 pp.
Directive, and in March 2016 it published Mobile Financial
Services Regulations. In autumn of the same year, Wave 48
Money, a joint venture between Telenor and Yoma Bank, 30
received the first mobile financial services license. At the
same time, Thai TrueMoney launched a remittance service
for Myanmar. Over the past 30 months, additional players 2013 2018
also from the banking and telecommunication sector have
started to offer mobile financial services, e.g. KBZpay and Source: DaNa Facility
OK Dollar or MPT money and M-Pitesan.

Mobile money is already used by one of Myanmar’s major retailers, City Mart Holding Company Ltd.
(CMHL) launched their City Rewards mobile payment application which can be used at a couple of
hundred outlets including City Mart, Ocean, and Seasons Bakery. With the application, users can
make payments and transfer money to other users (up to 100,000 Ks, equaling 66 USD, without
charges). CMHL CEO Daw Win Win Tint’s vision is that the City Rewards system may eventually be
also used at other retail stores and allow users to pay utility bills, phone bills and bus fares. 18 In
2019, 26% of the population made experience in transferring money via mobile platforms.19 The
largest service provider in mobile money, Wave Money, reports to cover 86% of the country with 7
million+ customers and 41,000 agents. Money transfers via the Wave Money platform reportedly
account for 2 trillion MMK (or 1.3 billion USD), an equivalent of close to 2% of Myanmar’s GDP.

3.3 E-commerce
Myanmar’s middle class is growing, and so are its consumption demands. E-commerce has been
growing country-wide over the past years. In 2019, 57% of Myanmar internet users browse through
shopping websites and shops on Facebook and 16% of internet users claim to buy online – which
most likely is to order from a shop page on Facebook. This trend only started to develop a few

15 World Bank Group

16 GIZ (2016): Myanmar’s Financial Sector; exchange rate as of April 2019 (1 USD = 1,511 MMK).
17 World Bank (2017)
18 Kasikornbank (2018): E-commerce in Myanmar: A Rising Tide.
19 MSR (2019): Digital Myanmar 2019 Study.

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

years ago and in 2017, only 2% of internet users bought items online.20 Currently, the Myanmar e-
commerce market is estimated to represent only around 0.01 percent of GDP, or about USD 6
million, but with a vast and fast-growing potential. 21
The forms and levels of sophistication that e-commerce takes in Myanmar vary largely. As indicated
above, the most informal and most common way of e-commerce in Myanmar are private sales
through Facebook. Those rely still largely on bank transfers and cash payments instead of mobile
payment solutions or card payments. These sales are unregulated and typically evade tax
payments. Therefore, the Myanmar government is actively considering suitable legal frameworks to
regulate and tax the market and adequately protect consumers and sellers. A few years ago,
German Rocket Internet ventured into Myanmar with online job, car, advertisement and shopping
platforms but withdrew in 2016/2017. Chinese Alibaba took over their e-commerce platform
shop.com.mm.
Germany’s largest investment in Myanmar to date, approximately 10 million USD (plus a 20 million
USD IFC loan confirmed in early 2019), is METRO Wholesale Myanmar. In Myanmar, METRO is
testing a new concept: a one-stop food distribution platform exclusively based on online orders
placed through the web-shop or mobile app.22 Payments for orders are currently structured as cash
on delivery (COD) as well as card on delivery (POSM). Stocks are kept at a central warehouse in
the Thilawa SEZ and distribution centers across the country, and deliveries are organized through
an Enterprise Resource Planning (ERP) system. The vision for the ERP system is also for it to have
integrated messaging and chat options as well as digital training modules. METRO is using
Myanmar as one of the first markets globally to test its new business model, where METRO
eliminates the concept of large, expensive wholesale space and only offers online order and
doorstep delivery.

3.4 Smart City trends

Smart City trends are slowly moving closer to the center of attention of municipalities in Myanmar.
In 2017, two leading ride-hailing apps, U.S. American Uber and Singaporean Grab, moved into
Myanmar.
On the forefront of the Smart City movement in Myanmar today is Mandalay, the second largest city
in Myanmar. The city recently joined the ASEAN Smart Cities Network (ASCN) initiative along with
Yangon and Naypyidaw. The initiative comprises 26 pilot cities in the ASEAN region and aims to
facilitate cooperation on smart city development and catalyze bankable projects with the private
sector.23 Mandalay’s membership in this network emphasizes a clear mission to leverage
automation and digitalization in its administration and infrastructure. One of the measures to
channel the city's efforts was to nominate a Smart City Officer.24 Current examples in Mandalay
range from pilots for smart water and electricity meters to internet-connected sensors linked to
CCTV cameras for remote traffic management. The city has also introduced electronic payments for
toll gates and set up GPS systems in rubbish trucks to monitor their routes. Some of the
municipality’s ideas were inspired by a self-funded study trip on Smart Cities to Singapore.

20 MSR (2019): Digital Myanmar 2019 Study.

21 Kasikornbank (2018): E-commerce in Myanmar: A Rising Tide.
22 METRO Wholesale Myanmar
23 ASEAN Smart City Network (2018).
24 The Irrawaddy (2018): Mandalay Chases Dream of Becoming Myanmar's First Smart City.

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

Internally, Mandalay’s municipal government MCDC (Mandalay City Development Committee)

organizes its work flow partially through messenger apps such as Viber.

Across the country, townships are already testing smart meters and mobile app solutions for tax
payment collection, e.g. in cooperation with the local IT social enterprise Koe Koe Tech and the
U.S.-American Asia Foundation in form of a modern assessment and effective collection of
municipal taxes.25 Near Yangon, in Dagon Seikkan, a large local construction company. Shwe
Taung, also has plans to set up a new Smart City in combination with affordable housing, an
investment expected to amount to USD 185 million. Smart cities can help to create an environment
that fosters Industry 4.0 solutions by providing a seamless integration of data among citizens,
devices, and assets (e.g., to manage traffic and transportation systems, power plants, water supply
networks, etc.).

25 The Economist (2017): Myanmar has one of the lowest tax takes in the world.

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4. Opportunities of Industry 4.0 for Myanmar

As of today, various examples can be observed in Myanmar, which drive further digitization and
automation in different industries. The telecommunication and financial sector have proven that
leapfrogging is possible in a country like Myanmar. However, Industry 4.0 is more than digitizing
single services. It entails the interconnectivity of a supply chain and even across industries by using
technology and data. Industry 4.0 offers vast opportunities on a company and macro-economic
level. Roland Berger estimates for a typical manufacturing company, e.g., an automotive supplier
which has today on average a profitability of 6 % to increase to 13%, mainly by higher plant
utilization (from 65% up to 90%.)26 On a macroeconomic level, a positive net effect in job creation
can also be expected. Although an increase in automation leads to reduction in employability of low-
skilled workforce it increases the need for a medium and high skilled workforce and attracts more
foreign direct investments.

4.1 Overview – Industry 4.0 in Myanmar

FIGURE 5 to replace – fixed 30%
The full understanding of the Industry 4.0 concept has not yet reached Myanmar manufacturing
businesses. Only 8% of our business survey respondents claimed to know about the term, and the
Only few companies in Myanmar know about the concept Industry
understanding of the concept varied largely. 15% of the businesses perceived Industry 4.0 as a

4.0 – Understanding largely varies

manufactural technology, whereas other answers were evenly distributed between various
understanding.

Figure 5: Familiarity with the concept Industry 4.0

Have you heard about How would you describe

the concept of Industry 4.0? the concept Industry 4.0?
Work in progress

30% Other

8% Cloud based automation

8% Mass, fast, convenient production
8% Yes 8% It can support business
8% Change of standard
8% It is more digitalized
15% I just heard of it
15% Manufactural Technology

Source: MSR survey, Industry 4.0 in Myanmar – Whitepaper

Source: Industry 4.0 study 20190516_Myanmar Industrie 4.0 whitepaper_v1_updated slides 8-11 20190517T1412+0630.pptx 1

26 Roland Berger study, The Industrie 4.0 transition quantified

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However, the survey reveals that companies see the importance of data and data analytics for their
FIGURE
business since 71% stated that data6 to
andreplace – added
analytics note
are important for them. The relevance of data is
expected to increase over the next five years, since 84% of surveyed companies stated that data
will become more important for their company. In highly automated industries like pharma, 100% of
Companies in Myanmar perceive data analytics to become very
all respondents emphasized the importance of data, whereas in more traditional industries like
important within in the next 5 years – But will they act on it?
textile (50%) or timber (40%) the importance was perceived significantly lower.

Figure 6: Importance of data today and in the next five years

How important is data and data analytics in your How important will data and data analytics be in your
company today? company in the next 5 years?

very very
important 58% 71% important 74% 84%
Work in progress

in of all in of all
companies, data is companies,
used in most areas believe in the
of decision making importance of data
important 13% important 10% analytics in the
next five years

neither nor 18% neither nor 10%

not not
3% 0%
important important

not at all not at all

important 6% important 3%

Note: Remaining % responded as 'I don't know'

Source: Industry 4.0 study 20190516_Myanmar Industrie 4.0 whitepaper_v1_updated slides 8-11 20190517T1412+0630.pptx 2
Source: MSR survey, Industry 4.0 in Myanmar – Whitepaper

Along with the importance of data, companies in Myanmar also intend to be more flexible in serving
their customers, aiming for a high customizability of their products. 82% of the companies stated
that in the next five years, their products should be fully customizable, and customers can ask for
any configuration or any changes to their order (this compares to 75% of the companies today).
However, those results might be driven by the fact that particularly small and medium-sized
companies may have been more capable to adapt of their products, simply given their small size.

4.2 Manufacturing industry

Today, the manufacturing industry in Myanmar is still highly labor intensive and most of the work
processes are still manual. Only 15% of the respondents of our business survey have indicated that
their production process is fully digitalized. On the other hand, in the next five years, Myanmar
companies intend to invest into digitizing their production processes and almost half expect that
their level of production process will be digitalized in the next five years. Manufacturing companies
who claim to have plans for a fully digitalized production process came from the following sectors:
printing manufacturing (62%), Pharma (50%) and Chemical (50%). More traditional manufacturing
industries such as metal (25%) and rubber (30%) are not planning to largely digitalize their
production process.

15
 FIGURE 7 to replace – added note
INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

Companies in Myanmar perceive data analytics to become very

important within in the next 5 years – But will they act on it?
Figure 7 Digitization of production processes in Myanmar

How would you rate the digitization of your How do you expect the digitization level of your Change
production process and equipment today?1) production process equipment to be in 5 years? [in pp.]

fully
digitalized 10% 15% of all fully
digitalized 36% 44% of +26 pp.
Work in progress

companies have all companies,

already digitalized plan to have a
their production digitalized
partly 5% process partly 8% production +3 pp.
digitalized digitalized process in the
next 5 years

neither nor 21% neither nor 21% -

mostly not mostly not

digitalized 8%
digitalized 10% +2 pp.

not not
51% 21% - 30 pp.
digitalized digitalized

Note: Remaining % responded as 'I don't know' ; 1) Study did not include large Myanmar conglomerates;
Source: Industry 4.0 study 20190516_Myanmar Industrie 4.0 whitepaper_v1_updated slides 8-11 20190517T1412+0630.pptx 3
Source: MSR survey, Industry 4.0 in Myanmar – Whitepaper

The opportunities, which arise from automating the production process are manifold for
manufacturing companies. The increased usage of data and analytics would enable concepts such
as predictive maintenance, which can significantly reduce the machine downtime and save related
costs. Furthermore, the full automation of a manufacturing process increases the efficiency and the
FIGURE
output of a site. Industry 4.0 also8 allows
to replace – addedlot
smaller notesizes and hence increases flexibility in the
production process. The German industrial solution provider Rieckermann for instance developed a
flexible packaging solution, which allows certain manufacturers to easily change the packaging
The level of automation is still in an early stage – Most dominant
depending on their needs. Despite the benefits of automation, many manufacturing companies in
barrier are high investment costs and employee readiness
Myanmar are still in an early stage of automation.

Figure 8: Automation level of Myanmar companies

How would you rate the current overall level of What are the reasons your company is yet to invest in
automation in your company? automation of production and business processes?

56%
20% 46% It requires too much investment
Work in progress

High implementation
of automation – All or
(Almost) no
automation – All or
24% Lack of readiness of own employees
most processes are most processes
automated require human 23% Lack of readiness of management
intervention
20% We do not understand automation

11% Lack of qualified people

32% 7%
Neither high nor no Afraid of data security
automation
30% Other
Note: Remaining % responded as 'I don't know'

Source: Industry 4.0 in Myanmar – Whitepaper

Source: Industry 4.0 study 20190516_Myanmar Industrie 4.0 whitepaper_v1_updated slides 8-11 20190517T1412+0630.pptx 4

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

46% of the companies stated that they have almost no automation in place and only 20% indicated
to have a high degree of automation. Most dominant reasons for the low degree of automation were
high investment costs but also the lack of readiness of employees and even of management.
However, 20% of the companies claimed to already have a high degree of automation, indicating a
general feasibility of automation technology for Myanmar companies.

4.3 Agriculture
Although the concept of Industry 4.0 evolved from the manufacturing industry, it is manifold and
involves the entire supply chain, including non-manufacturing businesses. Agriculture for instance
as one of the largest industries in Myanmar has significant potential to be further digitized.
Automation technology is highly important to increase the harvest output per acre. Technology also
links the sourcing industry (e.g. rice farming in agriculture) to the manufacturer and to the retailer.
Smart infrastructure as further described below then ensures a seamless transportation of goods
along the supply chain.
The latest trends in agriculture in Asia are artificial intelligence and self-driving vehicles. Seeds are
partially already dispersed by self-driving tractors. Satellite and drone images are employed to
monitor field development during different seasons. On the Chinese east coast, in Zhejiang
Province, some fish farmers have started to use smart sensors to monitor the oxygen levels in their
ponds and adjust supplies in real time when needed.27 For Myanmar’s growing fishery industry,
+50% export growth in the past two years alone and more growth expected with the EU market now
opening up for fish from Myanmar, this may also be an interesting case for Myanmar fish farms to
take a look at.
In other cases, AI is employed when monitoring cows feeding behavior through facial recognition
technologies, and thus identifying potential issues such as e.g. a cows' reduced appetite due to
illness. AI is also used to manage the harvesting, processing or packaging steps, as e.g. illustrated
by German food processing technology provider GEA.
In 2017, drying repeatedly stopped at one of the largest milk dryers in Germany, the DMK plant in
Zeven. Affected was the relatively new Tower 2 with an output of 8 t powder / h. During summer, up
to three times per week blockages occurred in the dryer outlet / fluid bed and / or the cyclone filters,
whereby the entire process had to be interrupted for several hours at a time in order to be able to
manually remove powder deposits.
In response to this challenge, GEA specialists developed a higher-level automation layer that
integrated all existing automation processes and can holistically take care of the entire process,
from milk processing via evaporation up to the dryer. The system works in the same way as an
autopilot in a vehicle and independently sets the optimum operating conditions. The system has an
uptime of 98%. In the process, the flood of data generated in 300+sensors and some virtual sensors
is permanently evaluated, and the control functions derived from them are carried out. The
laboratory values immediately enter the system as a reference. Every 30 seconds, a wide range of
process set-point update takes place. The plant operator always receives condensed information in
dashboards in order to be able to assess which process trends may emerge and whether
intervention is required. Since the introduction of the new system, the DMK plant did not experience
any shutdown of the milk dryer. As the process is now controlled as a whole, the drying could be

27 Nikkei Asian Review 2019

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brought much closer to the optimum, which relates to residual moisture and protein content in the
powder or the dry matter of the high concentrate. DMK reached considerable energy savings.

Figure 9: Case study - Milk drying process optimization

Initial situation Complexity Outcome

> One of the largest milk drying plants in Integration of existing automation processes > After installation of GEA OptiPartner, the
Germany (DMK in Zeven) process stability and operational
> Process optimisation to reduce downtimes consistency increased significantly.
in milk drying plant > The milk drying plant did not experience
> Development of a higher-level automation any more downtime
layer operating like an autopilot to detect > As a positive side effect, with the new
and correct process errors that may lead system the drying plant managed to save
to downtime of the drying plant significant amounts of energy
> Production: 8 t powder / h; Downtime
before: up to 3 times / week in summer

Key learnings
To better handle process disturbances, the advanced “autopilot” controller GEA OptiPartner leads to increased
process performance. It covers the full life cycle of process optimization, e.g. remote services for tuning,
software updates, and performance monitoring of the optimizers for continuous improvement.

Source: Gea OptiPartner

4.4 Retail – E-commerce

Industry 4.0 would affect the entire value chain of the retail industry. Up until now Myanmar’s
modern retail market has primarily focused on digitizing the customer interface. The booming
smartphone penetration and upgraded mobile broadband has encouraged the launch of many
digital start-ups with a retail focus such as Yangon Door2Door food delivery, Shop.com.mm,
OneKyat have become increasingly popular. As they are steadily scaling their operations, e-
commerce platforms are relying less on Facebook as a platform. These support systems are setting
the basis for an integrated workflow across the retail value chain in Myanmar instead of just
focusing on the digitization of the customer interface. In this context, big data analytics could
become increasingly important to better know the customer and anticipate customers’ preferences
and observe changing usage habits.
Only 11% of the manufacturing businesses in our survey indicated that their sales teams are closely
working with digital solutions. Within the next five years, they want to expand and digitally enable
more than half of their sales teams. By then, sales teams of service and trading companies could
also rely on digital sales strategies on the same level as manufacturing companies (also please
refer to 3.3).
Industry 4.0 is an enabler for retailers, to especially improve procurement and their logistics and
distribution network practices with data analytics and improved system integration. Benefits include
shorter lead times on goods movements along value chain, enhanced just-in-time delivery from the
supply side, better steering of ordering, anticipation of consumer behavior, more accurate demand
prediction, and better co-ordination of after sales and value-added services like delivery service.
These benefits are transferred to the end customers and the public by delivering healthier and
fresher products, and lead to environmentally friendly practices with less food waste and optimized

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delivery routes. One application area could be the instalment of RFID chips on packaged goods to
allow a detailed tracking of the logistic route, to make sure the products are freshly delivered to the
customers.

4.5 Urban development – Smart infrastructure/city

Infrastructure development is one of the areas that Myanmar is visibly lacking behind its regional
peers. However, Yangon has planned many urban development projects and envisions to become
the latest smart city in ASEAN. Based on the Yangon Master Plan 2040, Yangon should become a
more livable place as addressed by the Yangon Region Chief Minister. The Yangon Amata Smart
and Eco City Project is one of 42 prioritized urban projects, which Yangon Region Government has
committed with an estimated cost of USD 2.6 bn. An example that shows, that Myanmar is
gradually moving into the direction of Smart infrastructure.
In the meantime, Myanmar's second economic frontier city, Mandalay is gearing up towards smart
infrastructure development – being named among top five urban areas in Southeast Asia making
progress towards a smart-city status. Balancing its rich heritage and advancing towards smart city,
some notable initiatives include smart traffic system and smart metering system. Mandalay City
Development Committee (MCDC) has been installing over 50 traffic light sensors in Mandalay city
for real-time traffic monitoring system with the objective of improving traffic control, reducing road
accidents. Other ongoing smart urban development initiatives include smart waste management
and smart parking system with automated payment.
By leveraging on these Industry 4.0 enablers, smart cities can effectively use real-time traffic
management systems that reduce traveling and commuting time in the city, manage reduced waste-
creation and pollution, higher public transport utilization, increased power stability and reliance on
renewables as well as improvement in quality of life. Below case study shows an application area of
Please use the template to detail 1-2 case studies of applied
Industry 4.0 in urban development in another Southeast Asian country by the German technology
industry 4.0 concepts in Myanmar
provider Bosch.

Case study
Figure 10: Bosch BIMA solution (Intelligent Microgrid Controller) in Indonesia

Initial situation Complexity Outcome

Work in progress

> Hospital in rural Timor, Indonesia suffers > Lack of knowledge in understanding the > After installation of the BIMA solution, the
from regular power outage – As electricity benefits of installing the BIMA solution clinic experienced zero blackouts
grid is unstable, the client relied alt. sources Please explain th
– Client was not able to visualize the > Energy produced by the solar panels
> These were often temporary w. increased benefits beforehand exceeds demand
landmark project
cost and added to noise and air pollution – Bosch undertook education initiatives to > The surplus can be returned back to the
> Bosch installed the BIMA solution mitigate education gaps grid. The generator is hardly used now –
– Tailor-made solution consisting of an Real life update of the benefits:
intelligent microgrid controller, customized https://make.bosch.com/en/project/off-grid
system design and services package > After 5 months: Avoided 144 hours of
– BIMA integrates multiple energy sources blackout; Saved almost 300L of fuel;
and storage to prevent power outage 500 USD and 800kg of CO2 emissions

Key learnings
As traditional energy grids are becoming inefficient and ill-equipped to respond to urgent electrical demands of developing Asian
countries, smart solutions such as BIMA will be the key enablers in the transition towards a more efficient and environmentally
friendly energy management for manufacturing, telecommunication, hospitality, services, and other industries.

Source: Bosch 20190516_Myanmar Industrie 4.0 whitepaper_v1.pptx 19

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5. Barriers to overcome
This whitepaper identifies five main barriers, which Myanmar needs to overcome to further
automate their manufacturing industry and facilitate a viable Industry 4.0 landscape.

1. Lack of education – In Myanmar, the technical skills level particularly regarding digital
manufacturing (see 4.2) is still considered low, which is mostly due to the fact that the
Myanmar education system and business sector were largely isolated from global ties and new
R&D for decades. When considering Industry 4.0 as a concept to grow the economy, a
common concern globally is the replacement of manual “people” labor by machines. Compared
to industrialized countries, Myanmar is in a particularly unique situation since it has a young,
“digital native” population that is eager to learn and apply new skills for the overall improvement
of the country. This is the ideal ground to promote Education in the areas of Industry 4.0 and
not only leapfrog factory design but also peoples' skills. Myanmar can be at the forefront of
developing and educating entirely new professions e.g. robotics mechanic. German companies
are already cooperating with Myanmar education institutes on this: The new School of
Industrial Training and Education (SITE) in Yangon, which was masterminded by the Myanmar
Ministry of Education and the local company Sea Lion, works e.g. with the German companies
Festo Didactic, Siemens and Bosch to bring Industry 4.0 to the classrooms and learn future
technology with the latest German machines and software solutions.

2. Lack of financing – A key obstacle to leverage and use Myanmar’s leapfrogging potentials is
the lack of funding as 56% of our survey respondents have indicated. While the NLD
government has improved the share of tax collection since it took office three years ago, public
funding for major investments (such as e.g. smart infrastructure) is still scarce. Most public
infrastructure investments are still funded through ODA loans. For the private sector, access to
finance has slowly been increasing over the past years but project finance for machinery
purchases is still nascent. Banks have started to offer machine leasing/hire purchase and to
accept movable collateral, but this needs to be expanded much further. To adequately support
Industry 4.0 through the financial sector, more insurance products and risk-weighted loans
which are more flexible in terms of pricing (interest rates), maturity and collateral, are needed.

3. Lack of infrastructure – With an overall electrification rate of ~42% and around ~21% in rural
areas2829, Myanmar still lacks basic infrastructure. Manufacturers still often rely on large scale
generators to keep up their production during power outages. Although significant progress has
been made in the infrastructure of broadband and setting up a dense network of 3G and 4G
telecommunication towers, Myanmar has not yet pushed the concept of 5G as fast as
neighboring countries. Whereas first trials of 5G have been rolled out in neighboring countries
such as Thailand, Myanmar anticipates first 5G trials to be set up in 2-3 years. A Myanmar
National Broadband White Paper 2019, which has been recently published is a first step in the
right direction. Now the network should be quickly set up, e.g., in Special Economic Zones to
support manufacturers in further developing their production processes. 5G is an enabler for
Industry 4.0, allowing real-time data transmission without any human interaction and hence
highly important to further develop the concept in Myanmar. In terms of infrastructure, the

28 Ministry of Electricity and Energy

29 Roland Berger analysis

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country also needs to further develop their transportation infrastructure network. A comparison
with the neighboring countries shows that Myanmar lacks behind infrastructure across
transportation ways, although particularly apparent in road infrastructure. With 64 km paved
roads / 1,000km 2 Myanmar is far behind other countries in the Southeast Asian region such as
Thailand with 344km 2 / 1,000km2.30 A solid transportation infrastructure is not only important to
ensure a seamless supply chain but according to 94% of companies in Myanmar also very
important to boost overall economic growth.31

4. Lack of industry standards and collaboration – As of today, an increase in automation and

approaches on how to tackle Industry 4.0 have been discussed mostly by dispersed parties.
There is no common collaboration platform where the acceleration of Industry 4.0 is being
discussed. To foster interconnectivity within a supply chain, and further automating
manufacturing companies, the different stakeholders have to work together.

Figure 10: Stakeholder collaboration in Industry 4.0

Example: Malaysia > Inform other companies but also academic

institutions and government about the
Malaysia has developed an Industry 4.0 vision
with a focus on 5 industries, focusing on importance and benefits of Industry 4.0
education and providing a clear framework. One > Introduce use-cases that, clearly show the
of the measures was to realign the university benefits of Industry 4.0 concepts
curricula to be better prepare students towards
automated production approaches. > Form industry clusters, where Industry 4.0
Private sector
is highly applicable, e.g., Garment

> Integrate topics of Industry 4.0 Industry 4.0 > Set-up policies and
(e.g., IoT) into curriculum infrastructure framework
Council
> Foster inter-disciplinary teaching > Set the right incentives to
approaches (e.g., between IT attract investments
and engineering) Education / > Take the role as a platform
Public sector
> Invest in infrastructure academic sector provider to discuss and
> Build center for auto. develop roadmap
production systems

Source: Industry 4.0 in Myanmar – Whitepaper

Public sector: The Myanmar government needs to set the right policies in order to attract
companies investing in automation technology, e.g., by providing tax exemptions. Even more
important is to establish national standards and ensure cyber-security. As new technologies
emerge, standards across industries should be defined in collaboration with the private sector
(e.g., on protocols, network and security standards). International companies can support this
process with their knowledge and experience through e.g., case studies from neighboring
countries, certification of trainings on standards or the development of an overall roadmap.

30 World Bank
31 Myanmar Business Survey #2

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Private companies: To overcome the barriers of implementing Industry 4.0 in its production
processes, companies in Myanmar need to adapt the concept to fit to the local market
conditions. An integrated and full-scale Industry 4.0 landscape, where the company has a fully
automated production with an integrated supply chain is very likely to fail. Instead companies
should seek for Industry 4.0 pilots, either as a part in their production process or within an
industry cluster to test and gradually develop automated production systems.

Education sector: Universities need to adapt their curricula, integrating topics surrounding
Industry 4.0. Those topics can range from IoT, Big data analysis, cyber-physical systems or
robotics. Since Industry 4.0 combines several disciplines, universities worldwide have been
facing the challenge to bring those together. Hence, it is important that the universities foster
an exchange between those disciplines, e.g., by providing teaching forums or Industry 4.0
days. Again, private companies can support universities in setting up an appropriate
curriculum, using reference cases from other countries.

5. Lack of knowledge about Industry 4.0 – The survey revealed that only few company owners
and executives are familiar with the topic of Industry 4.0. Although there is a high willingness to
digitize and further automate production processes, it will take time to apply Industry 4.0 in a
broader context. However, an Industry 4.0 Council with representatives from government,
private companies and academic institutions can help to emphasize the importance of the
concept and bring it automation closer to Myanmar companies.

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6. Implications for the private and public sector

in Myanmar
If those barriers can be overcome, Myanmar has a unique opportunity to leapfrog across industries.
However, it is important for all stakeholder to act now, act together and act selectively.
> Act now – Myanmar needs to act now to catch up in the race of industrial competitiveness
– Given the relative whitespace in automation and Industry 4.0 in Myanmar, a clear roadmap
can be developed, identifying focus industries and clearly setting standards to avoid a
heterogenous technology landscape, which lacks in compatibility
– Other countries in the Southeast Asian region such as Thailand, Malaysia and Indonesia
have started earlier with fostering Industry 4.0 and were able to build a track record of
automation technology. By not being the first, Myanmar can learn from their worst- and best
practices and avoid costly failures
– Despite some bumps in the road, recently, foreign investors still believe in Myanmar's long-
term development. Pushing innovative technologies in Myanmar will support re-gaining trust
and attracting foreign direct investment
> Act together – Myanmar needs a strong collaboration between all stakeholders
– The public sector, the private sector and academic institutions need to collaborate and work
hand in hand to introduce Industry 4.0. The topic is too big to be left alone by one of the
parties.
– An Industry 4.0 council should be founded with selected representatives from each of the
groups to develop a clear roadmap on how to further develop Industry 4.0 in Myanmar
– The government should develop and monitor manufacturing standards to ensure that a
sustainable Industry 4.0 landscape develops in Myanmar
> Act selectively – Industry 4.0 requires a lot of resources, so it is important to use those
selectively and focus on certain application areas and industries
– The Myanmar government should consider identifying focus industries, in which an increase
in automation would add most value and then selectively support these industries to not
stretch public resources
– Industry associations should add Industry 4.0 on their agenda and discuss with its members
whether it is something they would like to pursue and further investigate
– Companies in Myanmar should identify a certain area in their production process they want to
automate and then work to perfectionate that instead of immediately pushing large-scale
automation attempts
Other countries in Southeast Asia (e.g., Thailand or Malaysia) have shown how Industry 4.0 can
increase efficiency for companies and convenience for end-customers. Malaysia for instance has
used a multi-layered approach, to foster automatization and digitization in the country. By following
the above guidelines and looking at successful neighboring countries, Myanmar can develop its
own national Industry 4.0 strategy to further drive prosperity.

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_Credits and Copyrights

WE WELCOME YOUR QUESTIONS, COMMENTS

AND SUGGESTIONS

AUTHORS
Roland Berger
Martin Tonko Dieter Billen
Partner, Southeast Asia Principal, Head of Roland Berger Myanmar
+62 21 8063-7054 +60 3 2203-8615
[email protected] [email protected]

Johannes Golüke
Senior Consultant, Myanmar
+95 9 89550-1413
[email protected]

Myanmar Survey Research

Marita Schimpl
Managing Director Marketing Research
+95 9 4211-42700
[email protected]

Delegation of German Industry and Commerce in Myanmar (AHK)

Martin Klose Sophie Waldschmidt
Delegate Head of Projects and Services
+95 9 45062-9364 +95 9 45062-9364
[email protected] [email protected]

This publication has been prepared for general guidance only. The reader should not act according to any information provided in this publication without receiving specific
professional advice. Roland Berger Co., LTD or any of the above authors shall not be liable for any damages resulting from any use of the information contained in the
publication.

© 2019 ROLAND BERGER CO., LTD. ALL RIGHTS RESERVED

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_About Roland Berger

Roland Berger is an independent management consulting company, solely owned by 220 Partners.
Founded in 1967, our company is German by origin, European by nature and global by ambition.

Through mutual trust and sustainable value added for our clients, we have become a longstanding
advisor of major international industry and service companies as well as public institutions
worldwide.

Our entrepreneurial spirit has shaped our growth and fueled our outstanding achievements since
the early days of the firm. In short, being a game changer is in our DNA. With nearly 50 years of
continuous growth behind us and 2,400 employees working in 34 countries, we are one of the
leading players in global top-management consulting. We have successful operations in all major
international markets including a strong footprint in Asia. Our 50 offices are located in the key global
business hubs.

Roland Berger is the leading strategy consulting firm in Myanmar, working with both local and
international companies as well as the government. We have contributed strongly to Myanmar's
development by supporting clients across industries on various topics, such as market entry,
strategic growth, organizational development and others.

_About Myanmar Survey Research

MSR is the first independent research & strategy agency in Myanmar. We understand people,
brands, the digital world and how they are interlaced.

In the past 25 years, we have been immersing ourselves in the everyday life of people, helping our
clients unlock business opportunities in Myanmar and the region.

MSR is a full-service market, social and industrial research company offering qualitative and
quantitative research methodologies as well as implicit tools like facial coding and eye tracking
tools. We help our clients to understand consumers & brands, we monitor sales & POS activities
and we assess organizational culture and development needs of a sector. Furthermore, we help
develop brand and advertising concepts that resonate with your target group.

We want to make our clients more successful by identifying relevant human insights that feed into
their business and development strategies.

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INDUSTRY 4.0 IN MYANMAR - WHITEPAPER

_About Delegation of German Industry and Commerce in

Myanmar (AHK Myanmar)
Since early 2014, the Delegation of German Industry and Commerce in Myanmar (AHK) and its
Yangon office act as the official representation of German business, commerce and industry in
Myanmar, with a mandate from the German government.

On behalf of the German government and individual clients, the Delegation of German Industry and
Commerce in Myanmar conducts market research and market entry advisory services, such as
distributor and business partner searches or business delegation trips to Myanmar and Germany on
tailor-made topics.

The Delegation of German Industry and Commerce in Myanmar fosters Myanmar-German business
relations in both directions and also provides free and in-depth support for Myanmar companies that
aim at expanding into the German market.

The Delegation of German Industry and Commerce in Myanmar works in close cooperation with the
German-Myanmar Business Chamber (GMBC) and sector associations as well as the German
Embassy in Myanmar. It is part of the global network of German Chambers Abroad (AHKs).

Since early 2019, the Delegation of German Industry and Commerce in Myanmar within the AHKs
network also has the official mandate for German business interests in the markets of Cambodia
and Laos.

We thank the following contributors for their valuable input to this whitepaper: Bosch, Deutsche
Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH, GEA, German Embassy Yangon,
Green Power Consult, Koe Koe Tech, METRO Wholesale Myanmar, Rieckermann, SAP, Sea Lion
Group, Siemens.

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