General Electric Co(GE.N) secured a medical equipment deal with two hospitals in Myanmar on Saturday, becoming the first U.S. company to restart business in the long-isolated country since Washington eased sanctions this week.
U.S. firms are wasting no time since U.S. President Barack Obama announced the issue of general licenses on Wednesday to allow investment and financial services.
GE was the first to move, agreeing through its local dealer to provide X-ray machines for cardiology and topography to two private hospitals in Myanmar.
The deal was announced on Saturday during a U.S. business trip to Myanmar, where investors are hoping to tap into everything from infrastructure and financial services to information technology, oil and gas.
Wary of being left behind by Asian companies, 70 people from 37 U.S. firms were on hand to scope opportunities in the once secretive state.
Although the GE deal through local partner, Sea Lion Co Ltd, was relatively small at approximately $2 million, the company has big plans for Myanmar, where the government has vowed to boost healthcare spending and tackle chronic power shortages.
"We're now good to go," GE's chief executive for ASEAN (Association of Southeast Asian Nations) Stuart Dean said in an interview on the sidelines of a forum of U.S. businesses in Siem Reap, Cambodia on Friday.
"Before it was a grey area, we didn't know if this was permitted or not. We would prefer it this way, to see the end user. If we gave a hospital 60 days to pay, was that financing and breaking sanctions? We weren't sure, but now that's covered by the licenses, so we're very positive."
Myanmar's 15-month-old quasi-civilian government is navigating an ambitious path to develop a resource-rich but desperately poor country that wilted under 49 years of military rule and sanctions, which have largely kept U.S. firms at bay.
Major U.S. companies dealing there under the embargoes were Chevron (CVX.N), which set up there before sanctions were put in place, and Caterpillar (CAT.N), which has sold bulldozers and excavators in Myanmar through an independent dealer.
The licenses issued to U.S. companies cover provision of financial services and a reporting requirement and detailed disclosures to promote transparency in a notoriously corrupt country, a move Obama said was to provide "immediate incentives to reformers".
One of the biggest challenges for Myanmar's government, and of concern for many investors, is its power outages. Myanmar has an outdated grid and three-quarters of its 60 million people do not have regular access to electricity. Although it generates hydro-power, most of its output is exported to its neighbours.
Dean said GE was working fast to try to agree a deal to supply Myanmar with two 25-megawatt gas turbines, which the government promised to the public in response to protests in several cities. It was also seeking to upgrade old GE technology sold to Myanmar before the imposition of sanctions.
"We continue to negotiate this, discussions are ongoing, but unlike healthcare equipment it's complicated, you have to connect to the grid and you need gas," Dean said.
"There's an urgency, we're working it hard, Myanmar's working it hard, but they're inundated with other proposals and in terms of people who understand how to negotiate energy deals, they're limited."
Now that financing was permitted, the world's biggest jet engine and electric turbine maker would eventually look to aircraft leasing there as Myanmar prepares to build a new airport outside the commercial capital Yangon.
Dean said the country was also interested in upgrading Myanmar's decrepit railways and fleet, which was not GE technology, but the company might provide signalling equipment.
With a request to open an office in Yangon still pending, progress would be slow and the company, he said, would limit its work in the country for now.
"We still have no feet on the ground. We're looking to hire by the end of the year, it's one step at a time," he said. "The real focus is, let's do healthcare and electricity well." (Reporting by Martin Petty Siem Reap, Cambodia; Editing by Jeremy Laurence)