c) Economic Internal Rate of Return (EIRR)
The net income per square meter of Myanmar companies:
One informative example of the annual net income per square meter of Myanmar local enterprises is US$ 15.34/m²/y.
It is to be noted that the above figure was provided from one of the related factories in the project team’s analysis.
The total factory area (building) within Myawaddy IZ.
The building-to-land coverage ratio is set at approximately 60%. (This percentage refers to the prevailing building/land ratio of general tenant companies in Rojana Industrial Park, which has no plan for future expansion)
The total building floor area in Myawaddy industrial park: the total salable area * 60% = 1,629,600 m²
This EIRR is calculated from the industrial park development costs against the net income of the all tenant companies in order to evaluate the economic effects in the Kayin state. .
The development cost is $69,630,000.
EIRR Conclusion:
If the tenant companies of Myawaddy industrial park are assumed to be primarily garment enterprises having business relationships with a variety of Japanese companies, a net profit of US$1.2 billion could be achieved over a 20 year period – representing an EIRR of 32.1%. Reaching this projected net profit of US$1.2 billion will produce many jobs that will, contribute greatly to the Kayin State economy as a result. Therefore this project is considered to have a significant economic impact to the State.