Indonesian publicly listed construction company PT Wijaya Karya will set up a joint venture company with Myanmar’s United Mercury Group (UMG) to help expand its business overseas.
Wijaya Karya foreign affairs department manager Destiawan Soewarjono said on Thursday they would construct a precast factory and work on big infrastructure projects in Myanmar through the joint venture firm.
“We plan to start the construction of our factory on a 5-hectare area in Myanmar this year. In the first phase of its operation, it is expected to produce 27,000 tons annually,” Destiawan said after the signing of a memorandum of understanding (MoU), with State-Owned Enterprises Minister Dahlan Iskan, Public Works Minister Djoko Kirmanto and Myanmar Construction Minister Kyaw Lwin among the witnesses.
“We are hoping to work in potential infrastructure projects in Myanmar as soon as this firm is established.”
He said Rp 200 billion (US$20 million) had been spent for the factory project, with another Rp 80 billion in the near future.
Destiawan said Wijaya Karya, which now controlled 10 percent shares, would increase its ownership to 40 percent over the next three years as agreed.
Djoko said the collaboration between the two companies showed Indonesia’s strong commitment to helping develop Myanmar and support the 2015 ASEAN Economic Community.
He said he hoped to see more infrastructure companies follow in Wijaya Karya’s footstep by entering Myanmar or any other Southeast Asian countries.
In addition, Dahlan said this was the perfect time for Indonesia to enter Myanmar as the country was in an early development stage, giving huge room for more local firms to work on projects.
He also urged Indonesian private companies to explore business opportunities there to strengthen Indonesia’s presence in foreign countries.
Besides Wijaya Karya, oil and gas firm PT Pertamina and publicly listed lender PT Bank Negara Indonesia had been running operations in Yangon since the end of 2012.
Indonesia’s total investment in Myanmar currently stands at $241.5 million, with the figure expected to increase significantly when the ASEAN single market officially kicked off in 2015.
During the Forum for East Asia-Latin America Cooperation (FEALAC) foreign ministers meeting in Nusa Dua, Bali, last month, both nations have reiterated their bilateral commitment to boost efforts in achieving the target of $1 billion in trade volume by 2016.
Indonesia, Southeast Asia’s largest economy, has less business exposure and presence in Myanmar compared to its regional neighbors, like Thailand, Singapore and Malaysia. Singapore’s sovereign wealth fund, Temasek Holdings, is believed to have invested $3 billion in Myanmar.
Source: Jakarta Post