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Zaw Zaw meets visitors in his Yangon office. Photo: AP

Tycoon Zaw Zaw sees his fortunes rise as ties to old guard bear fruit

Zaw Zaw sees his empire rise as ties to the old guard bear fruit

AP

Zaw Zaw, one of Myanmar's most successful and notorious businessmen, likes to pick his way at odd hours around the hulking skeleton of his new hotel that is rising beside Yangon's main airport road.

The 366-room Novotel holds a story of how one man, who remembers being too poor to afford a soccer ball, built an empire by befriending the military government in what was one of the most oppressive and isolated countries on earth; and how, as Myanmar opens up, he is quickly breaking with the past to embrace a prosperous, cosmopolitan future in which one thing seems certain: He will not lose.

"I am friends with everybody," Zaw Zaw said.

The 45-year-old tycoon, who built his fortune capitalising on Myanmar's old networks of patronage and power, has demonstrated an agility in reconfiguring his business - and image - to suit a new global audience, and at a speed few have matched. As the country emerges from 50 years of military rule, his Max Myanmar Group is on track to more than double revenue, according to data not made public before.

The revenue of the privately held group grew to US$240 million last year, up from US$180 million a year earlier.

Though he remains on a US blacklist banning American companies from doing business with friends of the old regime, the Max Myanmar Group is one of the nation's most successful conglomerates, employing 11,000 people in sectors from hotels and banking to cement and construction.

France's Accor Group has a deal with him to manage the Novotel in Yangon and an MGallery hotel in Naypyidaw, the capital. Zaw Zaw says he is pursuing a joint venture with a Thai cement company, and trying to get his Ayeyarwady Bank in shape so he can bring in a foreign partner. He also made a bold effort to list his energy subsidiary on the Singapore Stock Exchange, though that was rejected in April over lingering concerns about his past.

Zaw Zaw started the Max Myanmar Group by exporting used cars to Myanmar and other developing countries. Taking advantage of a law that allowed each citizen living overseas to import one car, he snapped up their import permits on the black market for US$500 each.

He founded a construction firm in 2005 that laid the roads for Naypyidaw. He then started a hotel company that built hotels in exchange for coveted vehicle import licences. He developed a jade mine in 2007 in a joint venture with the government.

In 2010, the ruling junta oversaw a rush of privatisations before handing power to a nominally civilian government. Max Myanmar acquired 12 gas stations, part of the land for the coming Novotel hotel and a banking licence, putting Zaw Zaw in good position to capitalise on the new era.

Zaw Zaw acknowledges being friendly with the old military regime, arguing there was no other way to succeed. "Only the government has projects," he says. "If I don't do projects with them, who will I do projects with?"

His only crime as he sees it? "In this poor country, I have become rich."

This article appeared in the South China Morning Post print edition as: How a tycoon rides on the back of change
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