Highway Holdings Limited has announced that it has purchased an additional 50 percent ownership interest in a Myanmar entity that operates a 15,000 sq. ft. manufacturing and assembly factory that the company has utilized for more than two years under a subcontracting arrangement. The company previously held a 25 percent ownership interest in this Myanmar entity according to a company press release.
Recent commerce law changes in Myanmar now allow non-Myanmar companies such as Highway Holdings to acquire interest in businesses that are domiciled and operating in Myanmar. These businesses are designated as “foreign companies” and can provide foreign investors with a tax holiday if certain import/export conditions and government regulations are satisfied.
Roland Kohl, chairman, president and chief executive officer of Highway Holdings noted: “The acquisition enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers. The utilization of the facility in Myanmar complements our component manufacturing operation in China, while partially offsetting escalating costs there. We are gratified by the support of the Myanmar government agencies, our local partner, managers and employees, and look forward to long-term success in this emerging country.”
One of Highway Holdings’ leading European Fortune 500 customers approved the utilization of assembly manufacturing for a series of electric synchronous motors at the facility in Myanmar, initially under a pilot test program. Production for this product has since ramped up and approximately 500,000 units have already been shipped directly to the customer’s factory in Germany from Myanmar.
“We anticipate further growth opportunities based on demonstrated quality and service, with expectations for additional business from these customers and also other multi-national organizations moving forward,” Mr Kohl said.