Daibochi Flexibles, a wholly-owned subsidiary of Daibochi Plastic and Packaging Industry, has signed a memorandum of agreement (MOA) with Myanmar Smart Pack Industrial Company to tap into the growing consumer packaging market.
As part of the MoA, Daibochi and Myanmar Smart Pack will launch a joint venture company in Myanmar to manufacture, market, sell and distribute flexible packaging and export them.
The joint venture, Daibochi Packaging (Myanmar), will be 60% owned by Daibochi Flexibles and 40% by Myanmar Smart Pack Industrial Company.
In addition to launching a production facility in Myanmar, the JV will take over MSP's existing business, premises and equipment in Myanmar.
Daibochi managing director Thomas Lim was reported by The Star Online as saying that the firm is also planning to invest $5.5m to enhance the production capacity, quality and efficiency of the manufacturing facility in Myanmar over the three years.
"We believe that Myanmar is poised to witness a high growth trajectory, propelled by the increasing economic development and anticipated influx of global brands of fast moving consumer goods and food and beverage as the country opens up.
"The significantly lower manufacturing costs in Myanmar also enable us to enhance our competitive advantage in the export market.”
Daibochi expects the JV to expand its packaging business into Myanmar and contribute positively to its results in the long term.
The establishment of the JV as well as the execution and completion of the JV agreement are subject to approval from the Myanmar Investment Commission and other relevant regulatory authorities in the country, reported The Edge Markets MY.
