Group also plans to enter Chinese property market
Property developer Yoma Strategic Holdings - which recently became the first Myanmar play on the Singapore Exchange via a reverse takeover of Sea View Hotel - already has plans to go into the bio-diesel industry in Myanmar and to enter the Chinese property market in the next few months.

‘Energy is a very hot sector now and bio-fuel is a very sought-after commodity. We believe we have the right capabilities to become a good success in this sphere of business,’ said Yoma’s Myanmar-born CEO Serge Pun, in an interview with BT.

Yoma, which is currently involved in property and construction projects, is also considering a capital-raising exercise towards the end of next year to fund its expansion plans.

Mr Pun said that Yoma hopes to venture into the upstream part of bio-fuel production by developing a jatropha curcas plantation in Myanmar. Jatropha curcas is a plant that can be processed into bio-diesel.
‘A lot of investment has gone into the refinery of bio-fuel but the upstream production of the feedstock remains a weak sector. There is never enough supply.’

However, five to six years down the road, there is a possibility of Yoma venturing downstream into the refinery business, said Mr Pun, who owns about 57 per cent of Yoma.

Yoma also wants to expand its geographical presence. ‘Other than in Myanmar, we want to have a very good footing in China, because basically we want to have not one but two emerging markets in which Yoma Strategic can excel,’ said Mr Pun.

For the China market, Yoma wants to focus on property development. It has already identified a piece of land on which to build a ‘composite development encompassing residential, commercial and office space’, said Mr Pun.

He also said that all these plans will be rolled out within the next few months.

And in order to fund all these expansions, Yoma is ‘contemplating a fund-raising exercise towards the end of next year’.

‘We definitely will have to do one, but not now,’ said Mr Pun.

Earlier this year, Sea View Hotel acquired Yoma Strategic Investments for $102 million in a reverse takeover. The reverse takeover put Yoma in control of Sea View as it injected its assets into the latter in exchange for shares of the Singapore listed company.

These assets include Yoma’s majority stakes in three Myanmar developments - the housing estates FMI City and Evergreen Condominium and the Pun Hlaing Golf Estate. Sea View was also renamed Yoma Strategic Holdings.

The deal included a profit guarantee that Yoma would maintain a consolidated net profit before tax and after minority interest of US$10 million in total for the financial years ending March 31, 2007, and March 31, 2008. That guarantee is ‘just an indication of our confidence and to provide a level of comfort to shareholders’.

‘Our intention is that our actual performance surpasses this guarantee, or else it will not be meaningful,’ said Mr Pun.

Yoma’s growth for the next two years will come from both real estate and production of feedstock for bio-fuel, he added.

Mr Pun emphasised that the properties developed by Yoma are not ‘run-of-the- mill’ but rather those that are designed to ‘produce a ‘wow’ factor’. ‘We have created a niche for ourselves as a premium developer. We have always focused on developments for niche markets where the competition is minimal.’

In the longer term, however, Yoma wants to be a conduit for foreign investors who want to invest in Myanmar. ‘Foreign investors can all smell, can discern the opportunities, the potential in Myanmar, but they all have a high degree of apprehension in going into the market because of the complexities involved.

They can now do so through Yoma,’ said Mr Pun, adding that Yoma’s Singapore listing lends the company more credibility and will make investors more comfortable about working with it.

Ultimately, Mr Pun hopes that Yoma can become a ‘truly blue-chip Myanmar company’. ‘That will take time and a lot of effort, but that is the direction we want to go. We just need to be very focused.’

Yoma’s shares were actively traded after its debut at 27.5 cents on Aug 24, hitting a high of 46.5 cents on Sept 29, although investor interest seems to have dampened in recent weeks. Yesterday, it closed unchanged at 39.5 cents on a volume of 507,000.