KUALA LUMPUR: Packaging player Daibochi Plastic and Packaging Industry Bhd is entering the Myanmar market following the signing of a memorandum of agreement (MoA) with Myanmar Smart Pack Industrial Company Limited (MSP).
Through the MoA signed today, a joint venture company called Daibochi Packaging (Myanmar) Co Ltd (DPM) has been formed, with Daibochi holding a 60 per cent stake, with the remainder held by MSP.
Daibochi managing director Thomas Lim said the company is investing US$6.8 million (RM29 million) in DPM for the 60 per cent controlling stake.
MSP is injecting all its assets, comprising plant and production equipment, into DPM for the balance 40 per cent stake.
Additionally, Lim said that US$5.5 million will be invested in capital expenditure in the Myanmar venture over the next three years.
This capped expenditure will go towards expanding DPM's production capacity.
Lim cited cheap labour costs and a fast growing economy as the main reasons for entering the Myanmar market.
He said that through the investment, the company will supply packaging materials to other Asean countries.