Local conglomerate Capital Diamond Star Group and Japan’s Mitsubishi Corporation will form a joint venture for food manufacturing and distribution, according to a press release.
The new joint venture, called Lluvia Limited, aims to invest US$200 million over the next three years in new and existing businesses in Myanmar’s food value chain, and eventually compete on a regional scale.
“Lluvia aims to expand aggressively in the region and aims to be one of Myanmar’s first homegrown regional companies with a view toward being one of the leading food companies in Asia,” the press release said.
The venture will be formed out of Capital Diamond’s existing businesses in brands including Premier milk powder, Premier coffee, Tea Master tea mix, and Blue Rocket and Diamond Star wheat flour.
Lluvia will work closely with farmers to facilitate access to capital and enhance farming techniques through knowledge transfer with Mitsubishi Corporation on the upstream side, while also improving food safety and reducing Myanmar’s reliance on imports on the downstream side.
Capital Diamond Star Group is headed by Myanmar entrepreneur U Ko Ko Gyi.
The firm also has businesses in agricultural commodity trading, fertilizer and retail, including the Capital Hypermart and Grab and Go convenience stores, as well as construction project such as the Myaynigone flyover, which had a soft-launch on March 27.
Mitsubishi is one of Japan’s largest companies, claiming a long history in food businesses from raw material sourcing to the distribution and retail end.
The two firms are expected to release more information on the agreement at a press conference later this week.
The food business looks set to become increasingly competitive, as a number of foreign companies are entering and local firms planning to expand.
Last September, Swiss giant Nestlé announced it plans to begin making its 3-in-1 coffee products at a Yangon-area factory, making an initial $25 million investment, with further spends to come.
Other household names like Coca-Cola and Pepsi have expanded their reach inside the country, while brewers Carlsberg and Heineken are also to launch local beer production.
Source: Myanmar Times