Scope#15 | Marubeni Myanmar Fertilizer
Nourishing the soil in Myanmar
As far as the eye can see, the rice paddies are just green, the winds that sweep across slicing through their stalks. The Bago Region, adjacent to the city of Yangon, the largest city in Myanmar, is a major producer of rice. But walking through the paddies with their scattering of farm houses, one can see that there are big differences in the condition of the rice plants, even though from afar they look the same. Some grow to reach for the sky and produce large ears, setting their roots deep, but others are rather sad-looking and yellowish.
“The difference lies in how the soil has been cared for,” says Takashi Akai, President of Marubeni Myanmar Fertilizer (“MMF”). Myanmar is one of the few rice exporting countries in Asia, alongside Thailand and Vietnam, but it is not necessarily blessed in terms of natural soil quality. In fact, many of its rice paddies have soil that tends to be acidic and deficient in minerals. Nevertheless, most farmers are not aware of such issues with their soil. Due to long periods of rule by military juntas, there is an overwhelming shortage of higher education institutions in the field of agriculture. This means that there are not enough trained people with a scientific knowledge of agriculture and so there is a lack of sufficient leadership in the sector.
Myanmar marked a new step forward in March 2016, when a government devoted to democratization led by Aung San Suu Kyi came to power, yet the agriculture sector, which is the main industry and accounts for 60% of the workforce, has not significantly changed. This issue has been the focus for the Marubeni staff assigned to Myanmar over the years.
Three years ago, Hiroyuki Miura, one of the founders of MMF, who has long worked in the agri-input business, dealing with fertilizers and agricultural chemicals, heard about the problem of soil quality in Myanmar and immediately thought of a certain product. That product was “slag fertilizer”, which is a by-product of producing steel in converters. In terms of steel production it is highly impure, consisting largely of calcium oxide and silicon, but it is rich in manganese, phosphoric acid and other minerals. The calcium oxide content is useful as an alkaline material to neutralize and improve the acidic soil, and the silicon is an important nutrient consumed in large volumes by grasses such as rice. The manganese, phosphoric acid, and other minerals are also necessary for plants to survive. Slag fertilizer did in fact provide precisely the nutrients that Myanmar’s land required. Referring to the potential benefits, Jun Yamazaki, Senior Representative of the JICA Myanmar Office, in charge of administering overseas aid to Myanmar’s agriculture sector, expressed his high hopes when he said that “By improving the soil, this project will have a major impact on agriculture in this country”.
“Apply the fertilizer to the roots when the rice stalks reach about this height.” Miura’s voice booms across the sun-drenched paddy. Miura issues instructions to his farmer clients on how to use slag fertilizer with words and gestures, and the local MMF employees translate that into Burmese and convey the instructions to them properly. Miura is wearing the same green polo shirts as they are, and like them, he is drenched in sweat. “No matter how good the fertilizer may be, if you don’t use it properly, it’s not going to have much of an effect. And if it doesn’t have an effect, farmers won’t use it,” says Miura.
MMF has already dispatched more than 100 sales staff across Myanmar, who teach locals how to use the fertilizer while expanding their sales channels throughout the country. The number of foreign tourists visiting Myanmar’s regions for sightseeing has risen sharply, including the ancient Buddhist ruins of Pagan, a plain that features some 3,000 pagodas, and the ancient capital of Mandalay, but Miura, in his efforts to promote the use of slag fertilizer, has travelled to villages deep within the mountains where no other foreigner has ever set foot.
Just one hour by car outside Yangon, a massive site is being developed, with factory buildings popping up one after another: the Thilawa Special Economic Zone. This special zone is a collaboration by three companies, namely Marubeni, Sumitomo Corporation and Mitsubishi Corporation, together with the Japanese government, represented by JICA, and the Myanmar authorities. The first Phase encompassing 400 hectares has been completely sold already, and companies from Japan, Singapore, Thailand and Korea are building their factories.
The headquarters and factory of MMF are situated in a plot within this zone. When you first step into the brand-new factory with its immaculate white walls, the first thing you notice is a blackish mountain of slag piled four or 5 m high, almost to the ceiling. This slag has been pulverized in a drum mill to remove any remaining iron and other materials, then made into powder and bagged. Compared to conventional fertilizers such as nitrogen, phosphate and potassium, slag fertilizer is much heavier, probably because it originates from steel. The white bags carry MMF’s trademark, an owl, which in Myanmar is the symbol of a rich harvest.
The city of Yangon was once called Rangoon, and had a lively rice market, one of the leading rice markets in Asia. In fact, in the years following World War II, Rangoon served as the “kitchen of Asia”, producing rice for other countries in Asia that were short of supplies. Unfortunately the rice grown in Myanmar these days is not a single variety, but a mixture; as such, it is poor in quality and not competitive in the export market. Agricultural advances such as soil improvement, fertilizer, agricultural chemicals, irrigation facilities for the dry season, and the infrastructure to make these a reality, are the key to the future of agriculture in Myanmar. Through its products and services, MMF is meeting some of these core needs, and hopes to serve as a bridge between Japan and Myanmar. As Akai says, “It will certainly take time, but with each single step we want to achieve things that will bring benefits for Myanmar.”
As a trading and investment company, it is important to think about what Marubeni can do for a country like Myanmar that has set out on the path of development. The efforts of MMF seem to provide a touchstone example of how they should proceed.
All information contained in this article is based on interviews conducted in September 2017.
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