U.S. Consumer Goods Company Buys Laser Brand Toothpaste for Around $100 Million
Colgate-Palmolive Co. has acquired a local toothpaste maker in Myanmar, in one of the biggest acquisitions by a foreign company in the Southeast Asia nation.
The U.S. consumer-goods company bought Laser Brand Toothpaste for roughly $100 million, a person with knowledge of the deal said Tuesday. The acquisition is one of the largest investments from a U.S. company since economic sanctions against Myanmar were first eased in 2012, ending the country’s six decades of isolation under military rule.
In a statement, Colgate confirmed it had acquired the Laser brand of toothpaste and personal-care products from Shwe Ayar Nadi Co. Ltd., a local privately held business group. It didn’t disclose terms of the deal.
Colgate said the investment reflects its “commitment to growing its business in this important emerging Southeast Asian country.” The company will acquire Laser’s manufacturing and tube-forming facilities and will produce Laser-brand toothpaste, along with importing Colgate brand goods from Thailand.
Colgate follows General Electric Co. , Coca-Cola Co. and Gap Inc., all of which have restarted operations in Myanmar over the past two years, with Coca-Cola pledging more than $200 million in investment there over the next five years.
Myanmar’s opening has been lucrative for multinationals that produce consumer goods, given the rising disposable income of Myanmar’s population of 51 million. Beauty and personal-care products in the country reached a market value of $318 million last year, according to research firm Euromonitor International, growing at a rate of 14% since 2009. Euromonitor has identified Myanmar as one of the 20 markets that will offer the most opportunities for consumer-goods companies globally.
Myanmar’s market is expected to grow further. The International Monetary Fund in a report this month estimated that the economy will keep growing by an average of 8% annually in coming years, citing increased foreign investment.
The acquisition is one of the largest of its kind in the frontier market, where foreign multinationals have preferred to set up joint venture companies with local businesses. Last year, merger and acquisition activity in Myanmar was valued at just $50 million, according to analytics firm Dealogic.
This included the acquisition of Myanmar Care Products Ltd., a producer of diapers and feminine-hygiene products, by Japan’s Unicharm Corp . for an undisclosed amount.
U.S. investment in Myanmar has so far lagged behind other countries—including China, Myanmar’s largest source of foreign investment. According to the latest available Myanmar government statistics as of August, the total approved investment from U.S. companies in Myanmar is $243.6 million, compared with $14 billion from China, $10 billion from Thailand and $4.7 billion from Singapore.
Consumer-goods companies from other Western countries have also started investing in Myanmar, including Danish beer giant Carlsberg, which in 2013 formed a joint venture company in the country to produce beer. The company will begin brewing beer locally next month.
Colgate said it will shift domestic production of Colgate brand toothpaste from Thailand to Myanmar in coming years, allowing it to produce locally for the Myanmar market. It didn’t specify an exact date.
Like many other Western brands entering Myanmar, the company launched an extensive corporate-social responsibility campaign last year before launching its investment there. Colgate printed health education posters on the inside of their brand’s cardboard toothpaste boxes, and encouraged local retailers in far-flung villages to display these educational posters in their shops and in local clinics.