Millcon Steel Plc (MILL), a SET-listed steelmaker, has formed a partnership with SET-listed General Engineering Plc (GEL) to develop a building materials factory in the Thilawa Special Economic Zone (SEZ) in Myanmar to cash in on growing demand in the neighbouring country.
Millcon and General Engineering signed a memorandum of understanding on Wednesday with Myanmar Japan Thilawa Development Ltd, which operates the SEZ near Yangon, making the Thai alliance the first granted investment privileges under the new Myanmar SEZ law.
The Myanmar company will reserve a land plot in the SEZ and apply for investment privileges for the Thai company.
The plot is expected to be transferred to the Thai alliance early next year for construction to begin.
“The company is establishing a foothold in the steel and building material industry in Myanmar,” said Sittichai Leeswadtrakul, Millcon’s president and chief executive.
He said Millcon expected to have a competitive advantage by being a pioneer in the Myanmar market, further integrating its business and offering potential in the future.
Last month Millcon formed a joint venture with Myanmar’s Thiha Group to establish a trading company for steel and other construction materials in Myanmar.
Millcon owns 51% of Millcon Thiha Co and its Myanmar partner the remainder.
General Engineering’s managing director Tawat Anatanavanich said the pact with Millcon would strengthen its competitiveness in the long term, as investment incentives would lower costs.
“Having Millcon as a partner will minimise the risks of doing business and provide us greater business opportunities in Myanmar,” he said.
“We’ll be flexible in developing the business in Myanmar, as this is a new market for us.”
Takashi Yanai, president of Myanmar Japan Thilawa Development, said his company would support the venture in using the SEZ as a manufacturing centre.
MILL shares closed yesterday on the SET at 1.65 baht, up five satang, in trade worth 5.21 million baht.
GEL closed at 70 satang, up one satang, in trade worth 62.8 million baht.
Source: Bangkok Post