Bangkok Sheet Metal plans JV in Myanmar

BANGKOK SHEET Metal, Thailand’s leading manufacturer of wide-range cable duct such as wire ways, cable trays and cable ladders, is eyeing a joint venture with a potential partner in Myanmar, marking the listed company’s first overseas expansion of its manufacturing facilities.

Managing director Tirawat Amornthatri said that the business was looking to form a joint venture especially for the manufacture and distribution of wire ways, switchboard cabinets and control panels, with a view to supplying the contractor channel in the neighbouring country.

The move is aimed at benefiting from the boom in construction and infrastructure development in Myanmar and to cash in on the country’s more open-market environment.

“There are many Thai contractors who have expanded their business and got construction work in Myanmar. They have enjoyed the same business culture as working in Thailand,” he said.

“We produce bulky products, which require local manufacturing when we are expanding abroad. We can buy local raw materials, especially steel plates, in Myanmar at a lower price than in Thailand. Myanmar imports steel plates directly from China at a lower import duty than Thailand,” he explained.

Tirawat said that from the macro point of view, Myanmar offered a tremendous business opportunity driven by its high population.

The country has also changed politically to a civilian-led government, which will lead to rapid development of Myanmar’s infrastructure, he added.

“There is a huge number of migrant workers from Myanmar in Thailand. While they will [eventually] go back to work in their home country, they will keep good working relations with Thai companies that expand their facilities into Myanmar,” the managing director said.

Stressing his confidence that Bangkok Sheet Metal’s products will be able to compete with those from China, he said: “We are closer to Myanmar than China. We will be able to make products at good prices and to a quality level that satisfies individual customers.”

Meanwhile, although Laos and Cambodia have much smaller populations than Myanmar, agricultural machinery is a booming sector in both countries and the company is supplying metal parts used in the assembly of such machinery to Siam Kubota Corp, which has a strong distribution network in the two markets, Tirawat said.

“We can be a minority shareholder in a possible joint venture in Myanmar, depending on local investment regulations. However, we want to have a potential partner that shares the same business philosophy. That is, to have a strong desire to make the same products as we do.

“They should not only have good finances, but also an in-depth understanding of those products and really want to be a manufacturer of them,” the MD said.

While the company will focus this year on seeking the right partner for its joint venture in Myanmar, the factory will be established next year at an estimated cost of Bt100 million, excluding land, he said.

The plant will employ between 30 and 50 people, and about 10 skilled Myanmar workers will be relocated from the company’s facilities in Phra Pradaeng district, in Samut Prakan province.

Bangkok Sheet Metal’s products can be classified into six categories: metal trunking and white conduits; communication racks, cabinets and enclosures; electrical switchboards and lighting fixtures; fabrication and metal working; mould- and die-making, machine tools and equipment; and sheet-metal parts, press parts, machine parts and assembly parts.

 

Source: The Nation

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