Thailand’s largest industrial estate developer company has suspended work on a $1 billion project in Myanmar. The suspension comes following fears that the military coup and possible international sanctions will drive investors away from the country.
The company had just begun construction on the 2,000-acre industrial complex outside Yangon in December. Chief marketing officer Viboon Kromadit told reporters on Tuesday that the project will be put on hold. The development includes a new power plant.
The announcement is a sign of the impact that the military coup, which began on Monday with the detention of Aung San Suu Kyi and other civilian leaders, could have on companies and business activity in the country. “We and our clients are concerned about a possible trade boycott by Western countries,” Viboon said. “It’s very likely to happen, particularly from the U.S. and the EU. And if that happens, new investment in Myanmar will definitely be badly affected.”
Viboon said the company had no choice but to take a “wait and see” approach to the situation.
“COVID has hit us very hard. Now the coup has worsened the situation and that has made investors wait and see. … We as a land developer have to wait and see as well.”
Japanese Companies Impacted
Around 20 companies, mostly Japanese, are in talks to buy land in the complex to set up production bases, according to Amata. The company said it has already spent 140 million baht ($4.7 million) on the first phase of construction.
Several other multinational companies have suspended operations due to the military coup while trading on the local stock exchange has been disrupted.
Suzuki Motor, the largest automaker in the country by new car sales, halted operations at its two plants all day Tuesday following half-day suspensions on Monday.
Operations will only resume “once we confirm that safety is guaranteed,” the company told Nikkei Asia. The Japanese carmaker has around 400 employees in Myanmar, all of whom are safe, according to Suzuki.
“The situation is changing quickly, so we’re making decisions day by day,” the company added.